ABSTRACT
This chapter presents alternative institutional forms of microfinance in India with specific reference to Andhra Pradesh (AP), examines record of appropriate agencies for lending to the poor, and then the implications of commercial microfinance as an agency for inclusive finance. It reviews the conditions under which Self-help group-bank linkage (SHG-BL) based microfinance institutions have emerged, their rapid growth, and the diversity of functions assumed by them, with particular reference to AP. SHG-BL in AP has recorded a distinct and rapid growth path with the active support of the state government working through Society for the Elimination of Rural Poverty (SERP). The chapter explores the 'transformation' of socially oriented thrift and credit institutions into profit-seeking MFIs which brought into prominence the issue of oversight and regulation of microfinance institutions (MFIs) with particular reference to AP. The events of 2006 should have acted as a warning signal to MFIs, but there were contradictory signals from powers that mattered at the national level.
