Thank you very much for the question. As I said, this is a challenge we face, which was fuelled in part by financial institutions that wanted to grow and had access to large amounts of capital, but had to keep growing. The discipline of lending broke down in some areas, so they weren't checking repayment capacity. Sometimes the same client received four or five different loans from different microfinance organizations and was basically using one loan to pay off the last one.
That this has happened is a black eye for the industry. The suicides have been widely reported. As I understand, the suicides in India tend to follow the agricultural production levels, but I think in many cases microfinance organizations made pressures on clients worse when they overindebted them, and then they were using techniques that caused more embarrassment to the client when they were trying to collect the money.
I can't figure all the reasons that go into it, but I do know that if any of those suicides were in part caused by these sorts of pressure tactics, it's something we have to make sure doesn't happen again.
In the microfinance industry we have a set of client protection principles. They include things like checking on the client's ability to repay, knowing what are acceptable and unacceptable collection practices, and making sure that the client has the right sort of product for their need. I've been involved with a group that is training microfinance organizations on how to implement and be assessed against these practices. We would like to see them codified in the regulations in a country. That's one area in which we want to make sure this doesn't happen.
The other is to balance the financial incentive with the social incentive, as I was saying before. If organizations are rewarded not just for financial performance but also for social performance, then they will focus more on making sure their clients are better off and making sure they can demonstrate that their clients' lives have improved.