The proposal to cap interest rates charged by MFIs (at 24%) - via a finance ministry letter to PSU banks - has caused significant irritation to the industry and its investors. From an article in the Mint: The smaller MFIs could go bankrupt, according to Sumir Chadha, managing director of Sequoia Capital India Advisors Pvt. Ltd—a private equity fund that supports microfinance lenders. “This reminds me of the price-control era, which ended more than 20 years ago,” he said. ...At least one in three MFIs in India are loss-making, and most of them are start-ups with a portfolio of under Rs.5 crore, shows a recent study by ACCESS Development Services, a not-for-profit organization that provides consulting services to MFIs. ...“The cost of operation in remote areas is high for all, and unless some concessions are given to smaller MFIs and those that operate in remote areas, the idea of financial inclusion through MFIs would be defeated,” said Mahajan Vineet Rai of social VC firm Aavishkaar s...