How microfinance may lead to indebtedness
- A new study published in the Economic and Political Weekly, explores why and how over-indebtedness continues to be a problem
- The findings imply that in addition to easy access to credit, financial literacy and vocational training are crucial for financial inclusion
NEW DELHI : In India, where access to the formal banking system is restricted, microfinance emerged as an important and popular alternative in the 2000s. However, the 2010 microfinance crisis in Andhra Pradesh, which saw a spate of suicides among over-indebted clients, exposed the vulnerabilities in the microfinance model.
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