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Indian banks, which put up about 80 percent of the money that the companies lent to poor consumers, are increasingly worried that after surviving the global financial crisis mostly unscathed, they could now face serious losses.
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In the past rich-world banks lent to poorer countries in dollars.
In 1976, Muhammad Yunus began lending to poor women in rural Bangladesh.
In practice, this was social policy: it meant more lending to poor people.
By Tad Friend In 1976, Muhammad Yunus began lending to poor women in rural Bangladesh.
This is a problem for the bank because it mostly still lends to poor countries, not poor people.
To keep making healthy returns on their cash, well-off people have to lend to poor and middle-income households so they can keep buying stuff.
The I.M.F. should lend to poor countries, she said, but "not for too long, because they get sucked into other issues, from reforming education to bank supervision to designing the medical care system".
Along with its sister agency, the World Bank, the I.M.F. has far more money available -- about $93 billion -- than the United States or other wealthy countries to lend to poor countries and help finance its aid programs.
A recent survey found that almost half of them believed that the government owed them a free house; a similar number thought that banks should be obliged to lend to poor people even if it was unlikely that they would be able to repay their debts.
On the face, its business model is similar to Grameen's, operating in Bangladesh, which focuses on lending to poor women.
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