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Changing definitions, MFI in focus


Changing definitions, MFI in focus

Letter # 82

Today, we discuss how, when you can’t change the facts, changing definitions help.

Recently, the changes by RBI bring the microfinance sector back into focus. Today, we begin by tracing MFI’s roots in India and its more recent journey (the 2010 AP crisis, 2016 demon, and 2020 Covid).

We conclude that while shares of MFI players are down from pre-covid levels, the operating parameters have improved meaningfully over the last few months. MFIs are a super-cyclical business, but does now qualify as ‘not a great business, but a good investment’? Read here: Microfinance: RBI’s new guidelines to make microfinance stronger – The Economic Times (

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