Another revealing look into how microlending got out of hand in India. Still, the idea itself still seems sound, it looks more that some lenders got too greedy and their intentions were mainly self-enrichment and profit rather than helping the poor.
An interesting excerpt:

Overlending in Andhra Pradesh calls to mind the U.S. subprime crisis, says Lakshmi Shyam-Sunder, director of corporate risk at International Finance Corp. in Washington, which invests in microlenders. “Subprime lending was initially seen as extending homeownership to poorer people, doing good,” Shyam-Sunder says. As the industry expanded, making a profit became more important to some lenders, she says.

Microlending is going through some tough times as it's been the subject of harsh criticism from politicians and activists. Grameen Bank, the institution that won its founder Mohammed Yunus a Nobel Prize, is even under investigation for alleged tax evasion regarding US$100 million. In other areas like India, microlending institutions have been said to be trapping borrowers into a cycle of debt as instead of "lifting themselves" out of poverty, they just keep borrowing constantly. This is really unfortunate as it seemed like a good concept. Yet, I feel that the problems described in this article about microlending aren't problems with microlending itself but problems with human faults such as greed and over-ambitiousness. In effect, these faults are also those that have plagued regular banking or financial institutions elsewhere- trapping borrowers into a cycle of poverty seems familiar.