We have recently read comments on various blogs which suggest that MFIs are comparable to Ponzi schemes. These bloggers suggest that once new MFI loan disbursements slow down, borrowers will not be able to make the payments on their old loans.
We would like to present data from some of our partner organisations operating across India which soundly refutes this notion.
Out of 13 MFIs whose data has been shared here, only one operates in Andhra Pradesh.
In the following table the data on the collection rate is split into before and after the Andhra Pradesh Ordinance came into effect. As one can see collections rates remain above 99% despite the fact that many MFIs have significantly cut disbursements.