On 15 October 2010, the Government of the state of
Andhra Pradesh (GoAP) in India promulgated an
Ordinancei attempting to regulate the microfinance
industry in the state. Intellecap, the India-based
social business advisory firm, released a White
Paperii which sought to provide an overview of events
leading up to the promulgation of the Ordinance, an
assessment of the implications of its provisions, and
an impartial evaluation of its impact on the industry.
Industry reactions to the Ordinance were initially
uniformly negative. However, events in the last three
weeks have significantly changed stakeholder
perceptions. Anecdotal evidence from the field
appears to be moderating extreme positions in both
government and industry. The Government appears
to have toned down some of its rhetoric, and the
industry has begun to acknowledge that the
Ordinance provides the basis for some desirable
cleaning-up. It is possible that the current crisis could
become a turning point, leading to a more balanced,
better-governed and better-understood microfinance
industry. This Update to Intellecap‟s White Paper
offers a view on the changing perceptions of industry
stakeholders