Challenges Worldwide: Unlocking Potential Challenges Worldwide is a pioneering not-for-profit organisation with a decade of experience supporting business development

in low and middle-income countries. We help grow businesses and contribute to sustainable economic growth and social progress through our full range of services: business coaching by our network of expert volunteers capacity building to strengthen public institutions and agencies a full investment process for impact investors. Working alongside development partners, impact investors and expert volunteers, Challenges Worldwide makes a real and lasting impact. So can you - contact us today to find out how you can use your skills and expertise to unlock potential across the world. Join our network today. Register here. Explore our current selection of professional assignments. Join us on: Volunteer stories

Kevin Kennedy Strategic Planning Job description: Financial Development Advisor Kevin Kennedy, an experienced senior practitioner and consultant, was posted in Uganda for 6 weeks to help an innovative solar energy organisation implement operations and credit processes to support growth. read more... For more volunteer stories visit our case studies page.

Until recently, microfinance has been the golden child of international development. Microfinance companies would lend small amounts of money to poor women who would, in the ideal scenario, use them to start small businesses. Their interest rates were typically lower than loan sharks' but still high enough to make a profit. Around the world, development experts believed microfinance was an ideal way to

alleviate poverty, a smart way to "do good" while also "doing well". How times have changed. In the last few months, many people have become newly critical. In November, politicians in the southern Indian state of Andhra Pradesh started making bold claims about how microfinance's crushing interest rates and strongman tactics were, among other things, leading to suicide among over-indebted borrowers. Some of the politicians' statements were considered dubious to industry insiders the Wall Street Journal, for instance, found suicide rates among microfinance borrowers to be five to 10 times lower than among the general Indian population but they resonated with the public. State politicians ordered private microfinance institutions to stop lending money, and likewise told borrowers to stop repaying existing debt. Within India, microfinance has historically had its strongest foothold in Andhra Pradesh. Private microfinance lenders had, in aggregate, disbursed more than 150bn rupees (1.8bn) to more than six million customers. Around the world, experts looked to the state as the Indian business torchbearer. Given this, Andhra Pradesh politicians likely knew that if they began openly worrying about multiple borrowing, coercive recovery tactics, and suicide related to private microfinance institutions, the rest of the country would carefully listen. Following the politicians' announcements, practitioners estimate that more than 80% of customers in Andhra Pradesh have stopped repaying their loans. MFIs have been bearing unprecedented losses, would-be customers have had fewer options for borrowing money, and international media outlets have been running apocalyptic headlines such as "India microcredit faces collapse from defaults". Microfinance lenders say the present limbo is not sustainable. They

insist the situation must return to business as usual, or more realistically, that new rules ones amenable to both politicians and practitioners must be established. The Reserve Bank of India (RBI) has been trying to do just this. They recently commissioned a highpowered group, the Malegam Committee, to study current problems in microfinance and create a new set of rules for the industry. This committee submitted an initial report on 19 January, and after rounds of discussion, the RBI will enforce the final recommendations later this year. Unfortunately, most industry insiders have been disappointed with the report's draft. Of particular concern are the new recommended caps on interest rates. Malegam recommends large microfinance companies to have lending margins (that is, the difference between the borrowing and lending rate) of no more than 10%. Operating costs for many companies, particularly those that serve remote populations, are often at least this much. Profitability becomes nearly impossible. According to one industry source, the "interest rates were never really an issue in India in the past. What this cap will do is make it more difficult to expand into underserved areas or reach the poorest customers. Reaching these regions and customers is more expensive, and rigid margin caps take away a lender's flexibility to price for these higher costs. Companies will instead focus on areas where customers are easy to reach, which runs counter to the government's stated financial inclusion goals." The Malegam report also places a low ceiling 50,000 rupees on borrowers' annual household income. The rationale is that microfinance was originally created to serve the poorest of the poor, and that ceilings will ensure they stick to that mission. Unfortunately, this recommendation runs counter to many academic findings. Microfinance has been shown, in several instances, to work best for people who are poor, but not entirely downtrodden. These customers, according to MIT's Poverty Action Lab, are more likely to use funds profitably and to repay debt. Brahmanand Hegde, founder and CEO of Vistaar Livelihood Finance, said that "the report is a huge

disappointment to us. It is forcing the industry to accept conditions that run against any business sense." There have been isolated instances of customer protest. In Vishakhapatnam, Andhra Pradesh, customers staged a sit-in outside a public bank, demanding more government-sponsored loans. Without private microfinance companies, they are finding it difficult to lead the lifestyles to which they had become accustomed. Nobody today can predict the future of the sector. If Malegam's current recommendations are enforced, however, we may see some private microfinance institutions being forced to shut down. The international development community's golden child may sadly suffer a premature death.
World news

larger | smaller

India Global development More from Comment is free on World news India Global development See also 22 Dec 2010 Microfinance: Development panacea, or exorbitant, ineffective poverty trap? 6 Oct 2009 India flood aftermath 24 Mar 2010 India's pirates of microfinance 19 May 2010 Drawing the line at poverty Printable version Contact us Article history Send to a friend Share Clip

Ads by Google
All New Samsung Laptops With exciting features for perfect mobile experience. Beyond Ordinary! www.Samsung.com/in/NoteBook Eco-Friendly Leather New Organic Tanning Technology by LANXESS - Find More! www.lanxess.in

Comments in chronological order (Total 122 comments)

Staff Contributor Latest 1 2 3 Next All

harryboy 7 March 2011 12:16PM This comment was removed by a moderator because it didn't abide by our community standards. Replies may also be deleted. For more detail see our FAQs.

SamuelSmiles 7 March 2011 12:21PM crushing interest rates and strongman tactics has nothing to do with the philosophy of microfinance. This is a second article in recent weeks about the failings of microfinance in Andhra Pradesh then may I suggest that the problem is with the people operating in there and not the system itself? Are the as many problems in other countries? India is a country that traditionally hasnt been very good at helping its poor. Something to do with the caste system and entitlement I suspect. Recommend (16) Report abuse | Link

Kwasia 7 March 2011 12:25PM This comment was removed by a moderator because it didn't abide by our community standards. Replies may also be deleted. For more detail see our FAQs.

osho 7 March 2011 12:27PM Ms Bansal You have been misled or have lost your way. This is the Guardian. In this land, poor cannot help themselves. And your cheek at suggesting that a locally-run, privately

financed enterprise might be helpful is downright insulting to the mindset that infests the British left. Begone. Take your article about self-reliance and enterprise elsewhere. Recommend (44) Report abuse | Link

bazzartii 7 March 2011 12:29PM Surprise, I see from the account that politicians are involved so they must have "leant on" by the loan-shark lobby. Recommend (2) Report abuse | Link

MindTheCrap 7 March 2011 12:36PM SamuelSmiles 7 March 2011 12:21PM This is a second article in recent weeks about the failings of microfinance in Andhra Pradesh then may I suggest that the problem is with the people operating in there and not the system itself? Maybe the people operating there have learned from the tactics of British bankers. Recommend (8) Report abuse | Link

Xenakis 7 March 2011 12:44PM In a society like India's where there is a melancholy acceptance of poverty due to caste and belief in reincarnation, is there any real hope for them? VS Naipaul didn't seem to think so. Recommend (8) Report abuse

| Link

nicedayforducks 7 March 2011 12:59PM Is there no problem that Guardianistas can't blame on the caste system or Hinduism? The caste system doesn't stop people from helping each other or themselves! Recommend (43) Report abuse | Link

Red98860 7 March 2011 1:01PM I look forward to reading the comments every time an India related article comes on Guardian. It is always enlightening to see what these white people think of us. Sample this. SamuelSmiles "India is a country that traditionally hasnt been very good at helping its poor. Something to do with the caste system and entitlement I suspect." Britain is a country which obviously is fantastic at helping the poor. So what the British directly caused the death of 35 million Indians by starvation because of 45 famines in their rule mainly a result of heavy taxation of poor Indian farmers and deliberate causing of food scarcity. And now a nice British guy, white and smug, tells us knowingly how India has a lot to do when it comes to treating the poor. Its like descendants of German Nazis admonishing the West on its poor treatment of jews. Charming. And here is another nice probably white but denitely smug British guy making a point. Xenakis In a society like India's where there is a melancholy acceptance of poverty due to caste and belief in reincarnation, is there any real hope for them? VS Naipaul didn't seem to think so. Naipaul has written 3 books on India, I have read them all. First was written in 1950s, 2nd in 1960s and the last in 1990, a year after I was born. Naipaul is highly perceptive but his views belong to the period in which he wrote. When his last book was written, (which FYI presented a comparatively positive image of India compared to the other 2) Indian economy was 1/10th the size of British economy. Now 20 years later, both economies are almost equal in size and as Indian GDP grows at 8-9% , which is the fastest after China, and British GDP

growth stagnates, India is set to conclusively leave Britain behind by 201213. But of course, our nice white British ex-Masters want to believe nothings changed since the time they were thrown out of India, and in fact are adamant that the natives are incapable of ruling themselves and are basically doomed without the White Master's Grace. Recommend (69) Report abuse | Link

StandAndDeliver 7 March 2011 1:06PM Red98860 But of course, our nice white British ex-Masters want to believe nothings changed since the time they were thrown out of India, and in fact are adamant that the natives are incapable of ruling themselves and are basically doomed without the White Master's Grace. So you won't be wanting the 825 million in aid that the UK plans to give India over the next 3 years then? Recommend (38) Report abuse | Link

Red98860 7 March 2011 1:08PM And by the way, when will you Kind White People stop this caste system nonsense ? No, there is no acceptance of poverty, even the poorest people in India enrol their kids in relatively expensive private schools rather the free government schools because they are better run and also because they dont trust the government or anything related to government. India's problems are because of the remnants of socialism that still exist, where government still plays a heavy hand in the running of the national economy. Take that away, bring complete economic freedom to the people - poverty will just vanish. It really is a matter of macro-economic policies than anything. Nothing to do with culture or religion. Recommend (44) Report abuse

| Link

Red98860 7 March 2011 1:12PM As expected, here comes the obligatory reference to British aid to India. StandAndDeliver So you won't be wanting the 825 million in aid that the UK plans to give India over the next 3 years then? I have tackled this issue several times on this website, so allow me to repaste some of my prior comments. One of my friends told me a story once. He used to work part time as a waiter in a five star hotel in India in his college days. (He is now an investment banker.) He used to get a salary of around 10000 rupees a month, but his tips used to be 20000 rupees. Usually the rich Indians would tip him 100 or 200 rupees for a meal. (which costs around 3000-4000 bucks for 2 or 3 people..) Now this loser white British guy comes along, can only afford a coffee (50 bucks) , but with kindness in his eyes, insisted on giving him 5 rupees as tip. Even beggars in India do not accept 5 rupees for a tip. When my friend said, that wont be necessary, the white kind British guy forcibly put the 5 rupees in my friend's pocket. That my friends, is the story of British aid to India. -------------------- I understand a lot of people in Britain (in fact most people), genuinely believe, whenever they hear the word "India", - "ah! thats another third world piss poor country whose people survive on our aid". Actually its not. 1. British aid to India is under 1 billion$ . India has a GDP of 1.6 trillion $ (1600 billion $) , growing at around 8-9%, which is the fastest after China among major economies, and should overtake Britain within a couple of years. In terms of purchasing power parity GDP India overtook Britain many years ago. So if you kind white people think we Indians just about stay alive thanks to your aid, good luck to you. 2. India is a net aid donor than a taker. India gives more than it takes. India's aid to poor countries like Afghanistan and few others in Africa amounts to billions over the last few years. Much greater than British / American aid to India. 3. British aid to India does not go to Indian government. It goes to certain specific private non-government charities, which for all purposes are probably engaged in missionary activities, conversions of poor tribals to christianity by bribing them etc. I dont think Indians should be grateful for that. 4. In fact for reason stated in point #3, Indians should insist that the Indian government ban British / American aid to India and ban all private charities that receive them. 5. Indian companies are the biggest investors in Britain after US companies. Tata Group, India's biggest conglomerate owns the biggest steel company in UK (15 billion $) , biggest luxury automobile company in UK (4-5 billion

$) amongst other things. What is British aid to India again ? Under 1 billion $. 6. I know you kind British people are ignorant, and most of you are not as well educated as many of us are, but still, good luck to you if you think India survives on your aid. Hope that makes you feel happy about yourself. Read my above story about the kind white gentleman from your country. Recommend (80) Report abuse | Link

redindian87 7 March 2011 1:15PM An admirable change from the usual twaddle on the Guardian about how there is a pressing need for big governments and how they should mollycoddle the poor, but this article is missing the point. You can never gauge the real picture by making a facetious argument about suicides, because farmers commit suicides for a variety of reasons. While I do agree that the politicians' view is over the top, industry is wrong as well. Microfinance Institutions had pretensions of being banks, and that's what the Malegam report seeks to correct. In all, it is a coherent report, and we will do well to implement some of it. Microfinance isn't a cure for all; it's just a useful tool. That's the point this article misses. But hey, kudos for being brave. osho is spot on. Recommend (19) Report abuse | Link

Gegenschein 7 March 2011 1:18PM The introduction of ID cards - giving many millions an identity, something they can open a bank account with - should reduce some of the costs incurred by the MF institutions. The politicians involved in defaming the MFIs will have been incentivised. While Red98860 may have some righteous indignation, the crippling effect of corruption and the utterly impotent legal system both need addressing. It doesn't matter what has happened before or elsewhere - these issues need to be dealt with regardless. Here's to

positive change and growth in India. Recommend (8) Report abuse | Link

redindian87 7 March 2011 1:18PM Something to do with the caste system and entitlement I suspect. You know, when you know very little about a particular subject, it is better to keep quiet. Look up on what the caste system is. Come to India, and I'll show you millions of upper caste people who are in a pathetic state. I understand that the Brits have been conditioned to blame caste for everything under the sun, but some amount of knowledge before commenting is needed. Recommend (23) Report abuse | Link

JButcher 7 March 2011 1:20PM It is puzzling that that author assumes that microfinance is a force for good. It isn't just the politicians of Andhra Pradesh that are hostile to microfinance: over many years and through many studies, it has been ripped to shreds by academics and other researchers. Contrary to its purported qualities, there are many justifiable claims that it is disempowering, divisive, has limited impact, and does not reach the most vulnerable. Recommend (9) Report abuse | Link

redindian87 7 March 2011 1:20PM Gegenschein Thank God for India's legal system. If it weren't for that, we would have been in a bigger soup. For example, the recent 2G spectrum issue has seen

investigations and the arrest of the minister concerned only because the Supreme Court is monitoring the case. While there are a lot of ills plaguing the lower echelons of the judiciary, the upper parts of it do a fantastic job. Recommend (12) Report abuse | Link

R042 7 March 2011 1:22PM One of my friends told me a story once. He used to work part time as a waiter in a five star hotel in India in his college days. (He is now an investment banker.) He used to get a salary of around 10000 rupees a month, but his tips used to be 20000 rupees. Usually the rich Indians would tip him 100 or 200 rupees for a meal. (which costs around 3000-4000 bucks for 2 or 3 people..) Now this loser white British guy comes along, can only afford a coffee (50 bucks) , but with kindness in his eyes, insisted on giving him 5 rupees as tip. Even beggars in India do not accept 5 rupees for a tip. When my friend said, that wont be necessary, the white kind British guy forcibly put the 5 rupees in my friend's pocket. That my friends, is the story of British aid to India. So wait. 100/3000 = 3%, while 5/50 = 10%. And somehow being generous makes you a "loser." Wonderful. Recommend (32) Report abuse | Link

JButcher 7 March 2011 1:23PM development experts believed microfinance was an ideal way to alleviate poverty, a smart way to "do good" while also "doing well". Not true. Donors and the development industry hoped that it was a way to alleviate poverty. Many actual experts have not shared this view. Recommend (3) Report abuse | Link

 Red98860 7 March 2011 1:25PM So wait. 100/3000 = 3%, while 5/50 = 10%. And somehow being generous makes you a "loser." Wonderful. So in your exalted logic, 5 > 100. Even beggars on the streets in India expect at least 10. Recommend (12) Report abuse | Link

redindian87 7 March 2011 1:26PM Talking about corruption, Fitch reckons we're less corrupt than Russia or China. That came as a surprise to me, Russia is definitely more corrupt than us, but China.....I don't know. They suffer from corruption as well, but death from a firing squad is a frightening prospect. Much more frightening than a few years in the nearest central jail.Not that I advocate things like firing squads, of course, but Fitch's view surprises me. Anyone who can shed light on the subject? Recommend (8) Report abuse | Link

redindian87 7 March 2011 1:27PM Red98860 Funny story. In Ahmedabad, near a Sai Baba mandir, I swear I saw a guy (a beggar) pull out a bunch of 100 rupee notes. He had more money than I did, for heaven's sake! Recommend (13) Report abuse | Link

 shrikandushma 7 March 2011 1:28PM Red98860 7 March 2011 1:01PM I look forward to reading the comments every time an India related article comes on Guardian. It is always enlightening to see what these white people think of us. Sample this. SamuelSmiles "India is a country that traditionally hasnt been very good at helping its poor. Something to do with the caste system and entitlement I suspect." Britain is a country which obviously is fantastic at helping the poor. So what the British directly caused the death of 35 million Indians by starvation because of 45 famines in their rule mainly a result of heavy taxation of poor Indian farmers and deliberate causing of food scarcity. And now a nice British guy, white and smug, tells us knowingly how India has a lot to do when it comes to treating the poor. Its like descendants of German Nazis admonishing the West on its poor treatment of jews. Charming. And here is another nice probably white but denitely smug British guy making a point. Xenakis In a society like India's where there is a melancholy acceptance of poverty due to caste and belief in reincarnation, is there any real hope for them? VS Naipaul didn't seem to think so. Naipaul has written 3 books on India, I have read them all. First was written in 1950s, 2nd in 1960s and the last in 1990, a year after I was born. Naipaul is highly perceptive but his views belong to the period in which he wrote. When his last book was written, (which FYI presented a comparatively positive image of India compared to the other 2) Indian economy was 1/10th the size of British economy. Now 20 years later, both economies are almost equal in size and as Indian GDP grows at 8-9% , which is the fastest after China, and British GDP growth stagnates, India is set to conclusively leave Britain behind by 2012-13. But of course, our nice white British ex-Masters want to believe nothings changed since the time they were thrown out of India, and in fact are adamant that the natives are incapable of ruling themselves and are basically doomed without the White Master's Grace. Hmm, so no famines in India before The British? Or since? (Suggest you google Maharashtra drought or Bihar Famine). No mention of The Japanese invading the worlds then largest exporter of rice (Burma) and cutting supplies. Basically it has suited your rulers to blame everything on The British whilst looting you with their Gangster Raj and you have swallowed it hook, line and sinker, aided and abetted by self hating liberal idiots in Britain. The British Raj would be preferable to the Gangster Raj for the majority of India's population. If you'd given them another 40 years you might have been Hong Kong

rather than Soweto. But as we all know Gandhi got what he requested (Chaos). Recommend (16) Report abuse | Link

BoredomIsPower 7 March 2011 1:29PM @Red98860 So in your exalted logic, 5 > 100 No, in his logic (well, most people's actually) 10%>3% Jeez, it's not that hard, try to keep up. Recommend (23) Report abuse | Link

redindian87 7 March 2011 1:30PM This comment was removed by a moderator because it didn't abide by our community standards. Replies may also be deleted. For more detail see our FAQs.

Red98860 7 March 2011 1:32PM redindian, Corruption in India is very high among the lower ranks of the bureacracy and is punitive for the common man. As Hayek said, in his critique of socialism in Road to Serfdom, (not his exact words, but I got the meaning right) what is it that makes it reprehensible for the general public to be under the influence of a multi-millionaire but understandable for the same people to be under the thumb of a low level government official, who has the power of life and death over them... Recommend (10) Report abuse | Link

 Red98860 7 March 2011 1:38PM The British Raj would be preferable to the Gangster Raj for the majority of India's population. If you'd given them another 40 years you might have been Hong Kong rather than Soweto. Thats interesting given that the British ruled India for 200 years, and by the end of their rule life expectancy in India was 28 years (compared to 65 today) and Indian economy, which is today as big as Britain's, was back then in 1947 1/55th the size of British economy. But then, maybe as you say things would have been even better had we not thrown out the Brits, and let them play "Master" to our "Slave" for 40 more years. Recommend (27) Report abuse | Link

Optymystic 7 March 2011 1:39PM What is a large microfance company but a large company with lots of small accounts and therefore high costs in proportion to the sums it lends? Would local credit unions not provide a lower cost solution? Recommend (1) Report abuse | Link

shrikandushma 7 March 2011 1:40PM Though reasonably able subcontracters India is unlikely to ever rival The West in innovation. In the 1950s Britain sold the production line for the Morris Oxford to india. Today you can still buy a 1954 Morris Oxford (Ambassador) there. In roughly the same period we went from the Sopwith Camel to Concorde. Obituaries for the west are extremely premature. Recommend (5) Report abuse

| Link

mbateman 7 March 2011 1:41PM Hi Surika Perhaps, as you say, times have changed in microfinance, but maybe this is urgently needed because the international development community now realises that it has been sold a lemon here. After all, 30 years into the microfinance movement, and as even previous supporters now concede, there is simply no real evidence to show that microfinance has achieved any substantive gains in terms of poverty reduction and bottom-up local economic development. Its all hype and heart-warming anecdotes, if one is being honest. Worse, there is also much solid evidence emerging to show that microfinance has been deeply damaging to the poor, and to the chances of promoting sustainable growth in poor communities. This is a very poor return indeed on the billions of pounds of investment and technical assistance which, of course, could have been channelled into other projects targeted at the same clients (for example, cash grants, public works programs, small business lending, etc). You may want to check out my just released ODI Background Note that briefly explores this conundrum http://www.odi.org.uk/resources/details.asp?id=5117&title=microfinancemicrocredit-grameen-bank In terms of Andhra Pradesh specifically, you clearly write from the perspective of the microfinance institutions, and very fervently too. The suicide connection to aggressive lending techniques used by the main microfinance institutions has actually been firmly established, notably by respected rural finance practitioner (and real insider) Ramesh Arunachalam http://microfinance-inindia.blogspot.com/ You fail to mention the rather important fact that it was the aggressive competition by the top five microfinance institutions that actually precipitated the entire microfinance debacle in Andhra Pradesh, the impetus being provided by the huge profits these five institutions and their top managers were making and expected to make (at the expense of the poor, one might add). You also castigate the Andhra Pradesh government without mentioning that when in 2006 they tried to avert the forerunner mini-crisis to the current full-blown crisis, they ran into a brick wall: the government was simply ignored by the politically powerful microfinance institutions, or else it was successfully hoodwinked into taking no action following promises that the microfinance institutions would reduce their interest rates, avoid multiple lending, and so on - all promises

they manifestly had no intention of keeping. So from 2006 onwards, nothing and nobody was going to stop these top microfinance institutions from doing what they wanted to do; which was to grow as fast as possible and as large as possible, and even if they had to massively oversell microloans to some of the very poorest and most vulnerable individuals in the world to do it. OK, the regulatory measures the Andhra Pradesh and Indian governments have proposed these last few months might not be perfect, as many admit, but the alternative was to allow the top microfinance institutions to go on and create even MORE economic and social destruction than they have done to date. Not sure if that would have been the best option for the poor.... Milford Bateman Research Fellow Overseas Development Institute Recommend (7) Report abuse | Link

shrikandushma 7 March 2011 1:41PM Red98860 7 March 2011 1:38PM The British Raj would be preferable to the Gangster Raj for the majority of India's population. If you'd given them another 40 years you might have been Hong Kong rather than Soweto. Thats interesting given that the British ruled India for 200 years, and by the end of their rule life expectancy in India was 28 years (compared to 65 today) and Indian economy, which is today as big as Britain's, was back then in 1947 1/55th the size of British economy. But then, maybe as you say things would have been even better had we not thrown out the Brits, and let them play "Master" to our "Slave" for 40 more years. Oft stated but you need to thank 2 Britons for the increase in life expectancy (Fleming and Jenner) rather than anything you did yourselves. Recommend (11) Report abuse | Link

Red98860 7 March 2011 1:44PM Today you can still buy a 1954 Morris Oxford (Ambassador) there. Actually you cant. They have closed

down the company. At least 10-15 years ago. There are a minimum 200 varieties of cars and SUVs to choose from in India from a couple of dozen brands. Couple of Indian automobile companies are doing rather well in innovation terms. One Indian company is the owner of the British luxury brands - Jaguar/ Rover. Recommend (11) Report abuse | Link

shrikandushma 7 March 2011 1:48PM Red98860 7 March 2011 1:44PM Today you can still buy a 1954 Morris Oxford (Ambassador) there. Actually you cant. They have closed down the company. At least 10-15 years ago. There are a minimum 200 varieties of cars and SUVs to choose from in India from a couple of dozen brands. Couple of Indian automobile companies are doing rather well in innovation terms. One Indian company is the owner of the British luxury brands Jaguar/ Rover. Still going in 2010, new cars still available everywhere in India. (I omly returned last week, so no BS please). http://www.ft.com/cms/s/0/81695e06-57a5-11df-855b00144feab49a.html#axzz1FvBQGYA7 Recommend (6) Report abuse | Link

JamesDavid 7 March 2011 1:53PM This comment was removed by a moderator because it didn't abide by our community standards. Replies may also be deleted. For more detail see our FAQs.

shrikandushma 7 March 2011 1:53PM Here's the manufacturers website- http://www.hmambassador.com/showroom.asp Recommend (4)

Report abuse | Link

StGallen 7 March 2011 1:54PM @BoredomIsPower 7 March 2011 1:29PM @@Red98860 So in your exalted logic, 5 > 100 No, in his logic (well, most people's actually) 10%>3% Jeez, it's not that hard, try to keep up. The 10%>3% would matter if the said waiter had cooked, bought and provided facilities for eating all by himself. Since he is only serving the underlying costs do not matter to him, only the tip. And became an investment banker. Recommend (2) Report abuse | Link

Red98860 7 March 2011 1:57PM Still going in 2010, new cars still available everywhere in India. (I omly returned last week, so no BS please). Thats great. But I happen to live in India. I have not seen a single Ambassador car on the roads ever since I can remember. Not for the last 5-6 years at least. And is these cars are sold, do you have any idea where one can buy them ? I dont see any Ambassador show rooms. Not even one. While there are a million showrooms of Hyundai, Tata Motors, GM, Ford, Mahindra etc. here in Bangalore. And even assuming the old Ambassador cars are sold, even though nobody sees them any more, and nobody knows how they can be bought, I would love to know if you could present any data of how many such cars were sold in India in 2009 or 2010. Incidently around 3 million cars were sold in India in 2009. Recommend (4) Report abuse | Link

borleg 7 March 2011 1:57PM From one established democracy to the biggest democracy in the world.............. Has anybody seriously considered the financing of the production of Condoms? I do not wish to sound purile nor racist but what is the point of microfinancing in a country who's main issue is it's inability to feed it's poor. Surely for the good of everyone on the planet and the prosperity of generations of Indians to come a little self-restraint might be the catalyst that generates economic change for the better. Or do we continue to watch people suffer through lack of the bloody obvious? Recommend (2) Report abuse | Link

abh3092 7 March 2011 2:00PM ////Britain is a country which obviously is fantastic at helping the poor. So what the British directly caused the death of 35 million Indians by starvation because of 45 famines in their rule mainly a result of heavy taxation of poor Indian farmers and deliberate causing of food scarcity. And now a nice British guy, white and smug, tells us knowingly how India has a lot to do when it comes to treating the poor. Its like descendants of German Nazis admonishing the West on its poor treatment of jews. Charming.///// ooops!! the secret is out of the locker! Recommend (4) Report abuse | Link

AntonyIndia 7 March 2011 2:01PM The Andra Pradesh politicians today have their hands full in managing the possible splitting up of their Telugu language state. Don't take everything they say about micro finance in the heat of that fight too serious -it might be just politico-tactical maneuvering for other reasons. Recommend (2) Report abuse

| Link

Red98860 7 March 2011 2:01PM Obviously the whole point of this Ambassador -1954 car nonsense is that shrikandushma has an agenda of showing how primitive Indians are still are, by saying we still drive a 1954 car, just to cater to the views of other nice British people who think Indians ride on elephants to office.... Recommend (21) Report abuse | Link

abh3092 7 March 2011 2:04PM //// Has anybody seriously considered the financing of the production of Condoms? I do not wish to sound purile nor racist but what is the point of microfinancing in a country who's main issue is it's inability to feed it's poor ./// The state which the author is talking about has less poverty with low birth rate.It's a myth that indians are reproducing like rabbits! India's birth rate is very low compared to most developing countries and in many states the population has started declining,the problem likes in 3-4 states where the birth rate is still very high and mostly because of illiterate Muslims! Recommend (5) Report abuse | Link

Federico 7 March 2011 2:06PM Sending poor small holder farmers in to debt so that they can buy the fertilizers and genetically modified seeds they dont really need... what possibly could anyone have to say against that? Recommend (5) Report abuse

| Link

abh3092 7 March 2011 2:06PM //////shrikandushma has an agenda of showing how primitive Indians are still are, by saying we still drive a 1954 car, just to cater to the views of other nice British people who think Indians ride on elephants to office....//// By the way who uses ambassador cars??? AHAHAHAHAHAHAHAHAHAHA....it's a metal junk and the company which manufactures it is bankrupt. Recommend (3) Report abuse | Link

ukblahblahblacksheep 7 March 2011 2:08PM This comment was removed by a moderator because it didn't abide by our community standards. Replies may also be deleted. For more detail see our FAQs.

abh3092 7 March 2011 2:13PM @ ukblahblahblacksheep ////Red98860 7 March 2011 1:12PM You are a racist... but since you are Indian you can blame it on the British. //// HAHAHAHAHAHAHAHA,firstly your name itself sounds so racist!! secondly what wrong did Red98860 said:- he wrote:- 1) British starved more than 30 million indians to death through artificial man made famine, this is a fact and not a story! 2) British destroyed india both socially as well as economically Recommend (7) Report abuse | Link

 shrikandushma 7 March 2011 2:17PM Red98860 7 March 2011 1:57PM Still going in 2010, new cars still available everywhere in India. (I omly returned last week, so no BS please). Thats great. But I happen to live in India. I have not seen a single Ambassador car on the roads ever since I can remember. Not for the last 5-6 years at least. And is these cars are sold, do you have any idea where one can buy them ? I dont see any Ambassador show rooms. Not even one. While there are a million showrooms of Hyundai, Tata Motors, GM, Ford, Mahindra etc. here in Bangalore. And even assuming the old Ambassador cars are sold, even though nobody sees them any more, and nobody knows how they can be bought, I would love to know if you could present any data of how many such cars were sold in India in 2009 or 2010. Incidently around 3 million cars were sold in India in 2009. Andaman islands perhaps, claiming never to have seen India's most popular car, the one still used by all Govt. ministers is strange indeed. Here's the new model from The Times (Of India) http://www.zigwheels.com/upcoming-launches/hindustan-motorsambassador/7301 Recommend (4) Report abuse | Link

Red98860 7 March 2011 2:20PM I live in Bangalore. No, I have not seen what you call "India's most popular car" over the last 5-6 years atleast. So tell me, since you are so smart, since you insist Ambassador is India's most popular car, how many Ambassadors were sold out of the total 3 million cars sold in India in the year 2009-10 ? Recommend (5) Report abuse | Link

JamesDavid 7 March 2011 2:23PM This comment was removed by a moderator because it didn't abide by our community standards. Replies may also be deleted. For more detail see our FAQs.

Sarika008 7 March 2011 2:25PM Hi all, Thanks for the rousing debate! At the least, I'm glad this article has raised so many questions. Several of you (including redindian, mbateman) suggested that microfinance isn't the "answer" to international development, and that the industry is also at fault. I completely agree with this sentiment, and I apologize if that didn't come across more clearly in my piece. I wholeheartedly believe that microfinance should be seen only as a financial tool, and not as a silver bullet. The model has several problems, and the industry has been in the wrong on several accounts. For instance, strongman tactics, regardless of how few and far between they may have been, are wrong. That being said, I think the latest actions being taken by the government are also wrong, and may potentially hurt the industry in the long run. Microfinance isn't perfect, but it should be allowed to survive-and the Malegam Report, in my view, may harm the chances of this. I look forward to hearing more from all of you! Sarika Bansal Recommend (7) Report abuse | Link Latest 1 2 3 Next All Comments on this page are now closed.

On Comment is free
Most viewed Zeitgeist Latest Last 24 hours

. 1. Wall Street protests reveal slice of America's barely tamed brutality | Ed Pilkington . 2. How Anonymous emerged to Occupy Wall Street | Ayesha Kazmi . 3. Labour must take the fight to the Tories, day in, day out | Polly Toynbee . 4. Our planning system is authorised blackmail and it's about to get worse | George Monbiot . 5. Barack Obama's rolling cadences pose a challenge to his rivals . More most viewed

Comment is free on Twitter

Latest news, views and links from Comment is free journalists and editors

HadleyFreeman: More D Mail news: the paper thinks Chelsea Clinton joining a company that owns a dating website is the same as her joining a dating website about 1 hour, 23 minutes ago HadleyFreeman: Presumably describing the photos of Michael Jackson's corpse as "shocking" excuses the Daily Mail from publishing said photos on its website about 1 hour, 27 minutes ago HadleyFreeman: Meghan McCain wins against Tina Brown (http://t.co/2QsUHfbE) where Elton John lost against @MarinaHyde (http://t.co/UyhGYAOJ) about 1 hour, 56 minutes ago Find more tweets from our comment team Follow our writers and editors on a Twitter list

Bestsellers from the Guardian shop

Loose top socks by HJ Hall Comfortable, light socks without elastic. Get twelve pairs in assorted colours and save over 20 off RRP. From: 24.99 Visit the Guardian reader offers shop See all offers and services from the Guardian

comment is free
Latest posts

 9min ago Climbers have a key role to play in highlighting global warming Ed Douglas: Climbers are often seen as adrenaline junkies. But we must make our voices heard over the disappearance of mountain ice Post your comment

20min ago The eurozone: a crisis of policy, not debt Mark Weisbrot: The European authorities' doctrinaire decision to use debt issues to force austerity on Greece made the situation so much worse 2 comments Comment from the paper Abdel Hakim Belhaj: The revolution belongs to all Libyans, secular or not Mike Farrar: Close beds to save the NHS Yvette Cooper: Labour must stand side by side with women This week's bestsellers

. . 1. Charles Dickens by Claire Tomalin 30.00 . 2. River Cottage Veg Every Day! by Hugh Fearnley-Whittingstall 25.00 . 3. Magic of Reality by Richard Dawkins 20.00

. 4. Life and Fate by Vasily Grossman 9.99 . 5. Living Mountain by Nan Shepherd 10.00 Search the Guardian bookshop
Search

Find the latest jobs in your sector: Arts & heritage Charities Education Environment Government Graduate Health Marketing & PR Media Sales Senior executive Social care Browse all jobs
media

Deputy Creative Director Location: The role will be based in the lovely Spa town of Leamington | Comes with a salary befitting someone of your stature VITAL MARKETING

Related information
World news India Global development

Indian troops race to help flood victims 6 Oct 2009 Waters leave more than 250 dead and displace millions in Andhra Pradesh and

Karnataka states as more rain approaches 26 Jan 2011 Who is responsible for India's poor the state or the private sector? 6 Mar 2006 Let the poor call the tune 16 Jul 2003 Mosquito plague kills 110 in India 30 May 2003 Hundreds die as heatwave lingers in southern India

Gay sex became legal in India two years ago, but attitudes change slowly 30 May 2011 Sylvia Rowley: For most gay men in Hyderabad, Andhra Pradesh, the law change has made little obvious difference, but they do seem to be louder and prouder