The Andhra Pradesh assembly ratified the microfinance ordinance, which lays stringent restrictions on microfinance opeartions in the state. The ordinance which was issued in October had triggered a crisis in the Indian microfinance industry with collections in Andhra Pradesh, which accounts for over 30% of India’s Rs.30,000 crore microfinance portfolio, dropping to 20%. This has spooked both investors and lenders – the two main sources of funding for microfinance institutions in India.

With no operations in Andhra, Ujjivan has been able to continue to lending operations as normal. However the ‘wait and watch’ approach of banks and financial institutions, Ujjivan has also been faced with a liquidity crunch. Thanks to the support of a few financial institutions, Ujjivan’s operations remain unaffected.

The media has seen a milieu of voices, on either side of the microfinance movement. Below is Bloomberg- UTV’s coverage; the report comes straight from the horse’s mouth – includes interviews with Ujjivan customers from Mumbai.

Part 1

Part 2

Part 3

Also read an article by Samit Ghosh, which appeared in the Hindustan Times.