This sector can be big. Microfinance with interest rates at above 28% per annum  is a high risk high reward segment but with that kind of an interest margin these agencies can take can those types of  risks because the supernormal returns adjusts for bad loans by itself.

 

I just read this link while searching for companies that are in the microfinance space. HSBC's Pragati is into this in a big way and Yes Bank has already set up its business model for forays into this space. Any other listed company that you all can think about?

 

As usual the 3 big Private Banks are into this under different bsuiness models.

 

Here's some more...

 

 

 

 

“Time was when banks didn’t take microfinance seriously, when they regarded it as corporate social responsibility rather than a serious commercial opportunity,” said Siddhartha Chowdri of Accion Technical Advisors, a technical partner of Yes Bank India’s for microfinance.   Yes Bank aims to lend Rs6 to Rs7 billion over five years with a focus on the urban poor — who usually have salaried jobs — with loans averaging Rs25,000 to Rs50,000