Poor are often vulnerable to natural disaster and vicious cycle of poverty without any social and financial protection. In recent days, micro-credit borrowers are falling into loan default due to lack of risk mitigation tools. We have seen over 53 suicides in less than 8 months in 2010 in southern India.
More often small loan is misused for household consumption rather than income generating activities. Micro entrepreneurs from SHGs are not supported by existing MFIs to navigate their small enterprises. Lack of mentoring/ guidance often push them into failure and then into poverty. Lack of community-based approach has created trust deficit among rural consumers about mainstream financial solution provider