With a few prominent exceptions (including SEWA in Ahmedabad) microfinance institutions in India have targeted the rural poor.
The urban poor were thought to be too mobile and lacking in neighbourly affinity and cohesion to ever generate the peer-group pressure on which unsecured lending to borrowers organised in joint-liability groups depends. However, all that is beginning to change.
A new generation of professionals has accepted the challenge of reaching the poor in the urban slums of metropolitan India, as well as those above the poverty line but unserved by the banks (about 80% of the urban population, taken together). They are discovering there is a huge appetite for credit in the credit vacuum that exists in the penumbra of the formal credit system and, and are innovating new products and processes with which to fill it.