Jim Rohn's words that we must all suffer one of two things, either the pain of discipline or the pain of regret or disappointment, are very relevant in the case of microfinance, which is heading in the direction of disappointment for lack of discipline or control. The sector has grown by leaps and bounds in the past five years with fantastic recovery rates and minimal delinquencies. The size of microfinance services seekers in India is still estimated to be nearly 250 million people or nearly 75 million households, of whom around 60 million are rural and 15 million are urban households. Among the rural poor, 50% are landless, 43% are from scheduled castes and tribes, 43% are wage earners, and in 66% of families, most of the adults are illiterate.

The potential for growth in the sector and its exponential success as a business model have made it an avenue for investment for commercial investors. It is difficult to believe that many NGOs like SKS, Share Microfin, etc. have even changed their basic ideology from developmental to commercial. In 2000, SHARE was one of the first MFIs to convert to a for-profit Non-Banking Finance Company (NBFC). This was the beginning of transformation of the microfinance industry in India, from one dominated by NGOs to an industry led by professional financial services companies.

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