Image via CrunchBaseNetflix has a market value of $10 billion. The New York Times has a market value of barely one billion dollars. Articles like this one are the reason why. This feels like a hachet job done by a Vinod Khosla enemy. The title of the article itself is so out of the whack. The microfinance industry in India is nowhere close to collapsing. Not even close. The article itself talks about how 1% of those who borrowed the money might no longer be able to pay. That is not a collapse. That is an excellent default rate. The default rates at big New York City banks that rich people and companies borrow from are much higher. And I am talking pre Great Recession numbers.
Image via CrunchBaseJust like the default rate remains low, yes, there are borrowers who have committed suicide because they could not pay back. But the article makes it sound like the microfinance industry in India has given rise to a country wide epidemic of suicides. People are committing suicide left and right by the roadside. That would be like taking the news of one Congresswoman in Arizona getting shot and making it sound like now there was a raging civil war in America.
