The micro-loan recovery agents were due to come knocking by the end of that week.
She did not wait for them.
--Soutik Biswas, BBC News, Andhra Pradesh

Two lines that matter-of-factly sum up the tale €“ not just of a life lost but also of an industry gone horribly wrong - an industry plummeted into a crisis by the loss of the very lives that it swore to elevate! The year 2010 saw the Indian micro-finance industry suffer a crisis of faith that questioned the very basis of its existence. In October 2010, The Government of Andhra Pradesh, a state often described as the micro-finance capital of India, reported that as many as 54 people had committed suicide due to harassment related to debt repayment. For a country that is yet to recover from the agrarian crisis that continues to claim the lives of farmers at a regular rate, this was yet another body blow! The champions of the downtrodden had turned into agents of oppression and harassment - or so it seemed!

Did the angels actually turn demons? Was this India€™s sub-prime? And why did such a fate befall an industry that even during the global economic crisis was the darling of bankers and investors worldwide? Ramesh. S. Arunachalam offers an objective ringside view into the ways of functioning of the industry even as he provides numbers to substantiate the enormity and the implications of crisis, born primarily out of the pressures of commercialization and incentives gone terribly wrong, the lack of sufficient regulatory/supervisory attention and the rigid and impractical stand of some state governments. He turns the crisis into a learning opportunity, touching on critical issues - like corporate governance, MIS, internal controls, risk management, compensation, regulation/supervision, financial inclusion and several other aspects - that came up during the churning! A framework of suggested remedial measures, which brings up the end, highlights practical action steps that need to be taken if the industry is to regain its credibility as a prime mover in the area of development and inclusive growth!

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The book, Journey of Indian Micro-Finance, authored by Ramesh S Arunachalam, was released on 4th July 2011 at Homi Talyarkhan Hall, Mumbai, by Shri. Y.H. Malegam, Eminent Chartered Accountant and Senior Member of the Board of Directors of RBI. The first copy was received by Ms. Sucheta Dalal, Managing Editor, Money Life, in the presence of Dr. Prakash Bakshi, Chairman, NABARD. Speaking on the occasion, Mr. Malegam, said that it was his privilege to release the book, which uses relevant data to provide an excellent overview of the evolution of micro-finance in India along with the attendant problems and possible solutions. He strongly recommended the book as €˜must read€™ for micro-finance practitioners and lay people interested in micro-finance.

The event also featured a panel discussion on the future of Indian micro-finance moderated by Shri. V. Vivekanandan, Advisor, South Indian Federation of Fishermen€™s Societies. Kick starting the panel discussion, Mr. V. Vivekanandan, said that micro-finance has three distinct strands of work €“ Govt. led, civil society/non-profit and commercial models and this makes the task of regulating and supervising micro-finance difficult.
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