David Roodman's Microfinance Open Book Blog

My last stop in India was Mudimyal, a village about 12 kilometers (7 miles) from Yarvaguda as the crow flies. Mudimyal has 25 self-help groups, which are "federated" into a Village Organization, a body whose membership is the head of the SHGs. The Mudimyal VO is turn federated with other VOs in its mandal, and mandal organizations are in turn federated at the district level, and district organizations at the state level.

In my last post I wrote that microcredit bubbles are unusual among credit bubbles in not being linked to salable assets such as houses. I was wrong. In the late 1970s and early 1980s western and Japanese banks got very enthusiastic about lending to foreign governments, which, like poor people without collateral, are hard to foreclose on. Funny, this symmetry between the mightiest and weakest borrowers.