After the 2010 crisis in Andhra Pradesh, micro finance companies seem to see little light for resuming operations in Telangana and Andhra Pradesh. Micro Finance Institutions Network (MFIN), an industry body representing the microfinance industry, has approached Telangana and Andhra Pradesh governments for turning around the microfinance industry in these two states with new business models.
Officials confirmed that some MFIs had approached the governments to restart in these two states. ?We have been approached by a few MFIs and we have advised them to change the business models if they have to resume their operations. The business models do not work with the policies of both the states as the interest rates are still on the higher side and still lack transparency,? sources added.
?We had approached the Telangana political leadership. Overall, their response was not negative,? Alok Prasad, CEO, MFIN, told FE. ?Outside AP, the industry is firmly on the growth path. In 2013-14, growth in gross lending portfolio (GLP) terms was 51%. However, in Telangana and Seemandhra, the overhang of the 2010 crisis remains and the industry is, at present, in a wait-and-watch mode. The hope is that with a stable political scenario, the leadership of the states will adopt a forward progressive approach,? he explained.