Microfinance woes persist: RBI's Rao

Indebtedness, falling rural income and election-related disruptions led to microfinance stress

- Reuters

India's microfinance sector continues to grapple with high interest rates, rising borrower over-indebtedness, and coercive recovery practices, highlighting the need for urgent lender reforms, a deputy governor of the central bank said.

"The (microfinance) sector continues to suffer from a vicious cycle of over-indebtedness, high interest rates and harsh recovery practices," said Reserve Bank of India (RBI) deputy governor M. Rajeshwar Rao at an event in Mumbai on 5 June.