US - Subprime

Re: Subprime

Postby millionairemind » Sun Feb 08, 2009 7:28 pm

An interesting article in this week's Economist...

Move over SUBPRIME, the new BIG BROTHER IS COMING... :lol: :? :?

http://www.economist.com/finance/displa ... d=13062194
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Re: Subprime

Postby kennynah » Sun Feb 08, 2009 10:23 pm

oh yes... Mr. Ham Kar Chan will soon have a field day at the stock market once all these Alt-A toxic assets dont get rescued....another round of multi-hundreds of billions to be written off by banks/fannie/freddie/etc... perhaps more BK burgers to be served up soon..... if so.... better Long SKF man....but ... i think i wait a bit more...to see how market will react to obama's superhero rescue...
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Re: Subprime

Postby blid2def » Fri Feb 20, 2009 1:20 am

Crisis of Credit Visualized. Good for people who're lazy to read, or for kids (well, kids old enough to understand). :D

- http://www.crisisofcredit.com/
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Re: Subprime

Postby millionairemind » Sat Mar 21, 2009 10:49 am

Pretty interesting article.

Mass Hysteria Over AIG Obscures Simple Truths: Michael Lewis
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Commentary by Michael Lewis

March 20 (Bloomberg) -- Last September the U.S. government began to dole out the first of $173 billion to American International Group. A big chunk of it passed right through to banks that had bought insurance from AIG against mortgage and corporate defaults -- foreign banks such as Deutsche Bank and Societe Generale but also some domestic ones, such as Goldman Sachs and Bank of America.

U.S. government officials then went to great lengths to disguise from the public exactly what they had done, and why, going so far as to declare the ultimate list of recipients of taxpayer funds off limits to the taxpayer. To its immense credit, the media -- or, rather, a handful of diligent reporters, the New York Times’ Gretchen Morgenson chief among them -- prevented the public officials from getting their way.

This incredible act triggered hardly any political backlash. In effect, the U.S. taxpayer had paid off AIG’s gambling debts. The end recipient of the money was not AIG, but Goldman Sachs, Deutsche Bank and the others.

Some large portion of the billions obviously wound up, in one form or another, in the pockets of their employees and shareholders. A few people on Capitol Hill moan and groan but there is popular agreement on the wisdom of this transfer of ONE HUNDRED AND SEVENTY THREE BILLION dollars from the taxpayer to the financiers.

Hara Kiri

But when AIG itself pays out $165 million in bonuses -- money it is contractually obliged to pay -- the entire political system goes insane. President Barack Obama says he’s going to find a way to abrogate the contracts and take the money back. A U.S. senator says that AIG employees should kill themselves.

Every recriminatory bone in the political body is aroused; the one thing you can do right now in Washington without getting an argument is to rail against the ethics of AIG’s bonus payment.

Apart from Andrew Ross Sorkin at the New York Times, it occurs to no one to say that a) the vast majority of the employees at AIG had as little as you or I to do with its quasi- criminal risk taking and catastrophic losses; b) that the most- valuable of those employees can easily find work at AIG’s competitors; and c) that if the government insists on punishing those valuable employees they will understandably leave, and leave behind a company even less viable than it is, and less likely to give the taxpayer back his money.

And also -- oh, yes -- that if the government can arbitrarily break contracts made by firms in which it has taken a stake no one in his right mind will ever again make a contract with one of those firms. And so all of the banks in which the government has investment will be damaged.

Big Numbers

From this episode we can observe several general truths about the financial crisis, and the attempt to end it:

1) To the political process all big numbers look alike; above a certain number the money becomes purely symbolic. The general public has no ability to feel the relative weight of 173 billion and 165 million. You can generate as much political action and public anger over millions as you can over billions. Maybe more: the larger the number the more abstract it becomes and, therefore, the easier to ignore. (The trillions we owe foreigners, for example.)

2) As the financial crisis has evolved its moral has been simplified, grotesquely. In the beginning this crisis was messy. Wall Street financiers behaved horribly but so did ordinary Americans. Millions of people borrowed money they shouldn’t have borrowed and, not, typically, because they were duped or defrauded but because they were covetous and greedy: they wanted to own stuff they hadn’t earned the right to buy.

On the Line

But now that taxpayer money is on the line the story has changed: innocent taxpayers are now being exploited by horrible Wall Street financiers. The guy who defaulted on mortgages on his six spec houses in the Nevada desert has turned himself into the citizen enraged by the bonuses paid to the AIG employees trying to sort out the mess caused by his defaults.

3) The complexity of the issues at the heart of the crisis paralyzes the political processes’ ability to deal with them intelligently. I have no doubt that, by the time this saga ends, we will all know what happened to every penny of that $165 million in bonuses and each have our opinion of the morality of it.

I doubt seriously we will ever understand the morality of the $173 billion payment that is the far more serious issue. For instance, Goldman Sachs, which received about 8 percent of the pile, or $13 billion, has claimed publicly that the money was, to them, a matter of indifference, as Goldman had hedged itself against a possible collapse of AIG -- by making bets against AIG.

Goldman’s Clue

This suggests that it was clear to at least one market player, before the collapse, that AAA-rated AIG was behaving in ways that might lead to its demise -- which is to say that there was really no responsible place to lay off these bets. (So why bail out those who made them?)

It also suggests that it is a matter of indifference to Goldman Sachs whether AIG lived or died, as either way it was protected. (So why bail it out?)

Since the beginning of the crisis I’ve wondered why the government has found neither the will nor the way to attack the root of the problem -- the people who borrowed money to buy homes they shouldn’t have bought.

Now I think I understand. It would be too simple. People would understand a lot of small payments to the guy down the street who doesn’t deserve them, and become outraged. Far better to throw trillions at opaque corporations, the inner workings of which no one still really understands.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: Subprime

Postby sidney » Mon Mar 23, 2009 12:30 am

grandrake wrote:Credit of Crisis Visualized. Good for people who're lazy to read, or for kids (well, kids old enough to understand). :D

- http://www.crisisofcredit.com/


Sure works for me:)
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Re: Subprime

Postby mojo_ » Sat Apr 04, 2009 8:51 pm

The revised MTM rule is supposed to be able to be applied retroactively to 1Q valuation and results. This commentary below suggests that earlier writedowns could also turn into writebacks... could this add more fuel to the bear market rally... Image

Mark-to-Market Rule Gives More Clarity, Not Less: John M. Berry

Commentary by John M. Berry

April 3 (Bloomberg) -- Mark-to-market accounting rules are being brought a little closer to economic reality -- accompanied by misplaced howls of outrage.

True, the ostensibly independent Financial Accounting Standards Board yesterday agreed to alter a portion of the rules only under extreme pressure from Congress, and that’s unfortunate. Still, the standards have forced many financial institutions to overstate losses on trillions of dollars worth of assets, intensifying the global financial crisis.

Defenders of the rules say they protect bank investors and changing them will allow institutions to hide future losses. To the contrary, they have helped drive down the value of bank stocks, made shorting the shares much easier and caused bank stockholders to lose hundreds of billions of dollars in such companies as Citigroup Inc. and Bank of America Corp.

William M. Isaac, a former chairman of the Federal Deposit Insurance Corp., told a House Financial Services subcommittee hearing on March 12 that “MTM accounting has destroyed well over $500 billion of capital in our financial system.”

Since capital can be leveraged about 10 times in making loans, the rules have “destroyed over $5 trillion of lending capacity,” said Isaac, now a consultant with the Secura Group of LECG Corp.

The problem with mark-to-market accounting is that it officially has presumed there’s a functioning market in whatever asset is being valued -- and that means a deal between a willing buyer and seller that isn’t being forced to sell. Actually, no such market exists for many mortgage-backed securities.

Distress Sale

Nevertheless, according to testimony at the March 12 congressional hearing, accountants have required many banks to calculate values based on distressed sale prices. That has meant large writedowns even on mortgage-backed securities that the institutions intend to hold to maturity.

Take the case of the Federal Home Loan Bank of Atlanta. Following the mark-to-market rules, it wrote down the value of its portfolio of mortgage-backed securities by $87.4 million in last year’s third quarter. Its actual projected loss on the securities: $44,000. For the fourth quarter the bank recorded a further $98.7 million loss on the securities.

That result makes no sense when the bank doesn’t trade such assets. However, if the current market value declines significantly and stays down for an extended period of time -- a condition known as other-than-temporarily-impaired -- mark-to- market has been required, a bank spokesman said.

A writedown might still be required under the changes FASB approved yesterday. Yet auditors can now use “significant professional judgment” when valuing illiquid securities. That’s what they should have been allowed to do all along.

Cash Flow

The change will make it harder for accountants to continue to protect themselves from lawsuits by using some trade, no matter at what low price, to determine a security’s value.

With the new leeway, the Atlanta bank should be able to value its mortgage-backed securities by calculating the expected cash flow -- the monthly mortgage payments from homeowners -- and applying an appropriate discount. That’s the approach the bank used to determine the $44,000 third-quarter loss.

The key points in this example are that almost all the mortgages involved are still performing and the bank plans to hold the securities to maturity -- and yet large writedowns were required.

Think of it this way. There are millions of U.S. homeowners who are “underwater” with their mortgages. That is, they owe more than the value of the home in today’s depressed housing market.

Putting Up Money

That’s hardly good news, and it might make it impossible to refinance the mortgage because of the lack of equity.

On the other hand, the house hasn’t changed. It’s still providing the same shelter and other amenities to the household, and if the family’s financial circumstances haven’t gone into a tailspin, the monthly mortgage payments can still be made.

The family doesn’t have to put up money to cover the difference between the mortgage and the lower market value. Nor should the Atlanta bank have to take a big hit on its reported income because some other mortgage-backed securities owner sold in a depressed market.

FASB wisely backed away from a tentative proposal to allow auditors to assume that limited trades in an inactive market were always distressed sales. That would have gone too far.

Now accountants are supposed to use their judgment in assessing the meaning of such trades. That’s a big improvement over just using the last transaction price, as many auditors have been doing.

Recovering Writedowns

Now FASB has to deal with how banks deal with recoveries of previous writedowns due to other-than-temporary-impairment losses when there’s evidence that loss is no longer there.

A March 27 letter sent jointly by the five federal regulators of financial institutions -- the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corp., the National Credit Union Association and the Office of Thrift Supervision -- urged FASB to add such a recovery to current earnings.

Since the losses were subtracted from earnings, that would be an equitable way for FASB to go -- and soon.


(John M. Berry is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: John M. Berry in Washington at [email protected]
Last Updated: April 3, 2009 00:01 EDT
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Re: Subprime

Postby millionairemind » Tue Apr 28, 2009 7:44 pm

A very long article on NYT criticising Geithner. Interesting read.

http://www.nytimes.com/2009/04/27/business/27geithner.html?pagewanted=1
Geithner, Member and Overseer of Finance Club
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Re: Subprime

Postby winston » Thu May 07, 2009 9:46 pm

US centre names 25 lenders blamed for financial crisis

WASHINGTON: US and foreign banks were not unwitting victims of circumstance but deliberately culpable in the financial meltdown that engulfed the United States last year, a campaign group said on Wednesday.

The Centre for Public Integrity named 25 "sub-prime" mortgage companies whose risky lending was blamed for the US property market collapse and the subsequent global economic crisis.

Many of the lenders were either controlled by US and European banks, or could not have indulged in their high-risk lending spree without the connivance of banks, the investigative journalism group said in a new study.

"The mega-banks that funded the sub-prime industry were not victims of an unforeseen financial collapse, as they have sometimes portrayed themselves," the centre's executive director Bill Buzenberg said.

"These banks were deliberate enablers that bankrolled the type of lending that's now threatening the financial system," he said.

The study was released as the US House of Representatives was set on Wednesday to vote on a Senate-approved bill that would set up a 9/11-style commission of experts to probe the root causes of the financial crisis.

The purpose is not "to point fingers and place blame," Republican Representative Darrell Issa said, "but rather to identify mistakes" to prevent a future recurrence.

The Centre for Public Integrity said it had forwarded its report to leading members of Congress.

Lead author John Dunbar said the study highlighted "a catastrophic regulatory failure" that had required trillions of taxpayer dollars to rescue the banking industry.

"There was nobody watching the store all the way through this process," he told reporters.

The centre analyzed US government data on more than seven million sub-prime loans made from 2005 to 2007, when the real estate bubble was at its peak.

It said the "Sub-prime 25" accounted for nearly one trillion dollars or about 72 percent of industry-reported loans extended to risky borrowers who would not normally have qualified for a mortgage.

At least 21 of the 25 were financed by banks that received US government bailout money, and 11 of them have made hefty payments to settle prosecution claims of widespread lending abuses, it said.

Four of them have received bailout funds, including collapsed insurer American International Group and banking behemoth Citigroup.


Top of the list with at least 97.2 billion dollars in sub-prime loans was Countrywide Financial, which was bought by Bank of America last year to avert bankruptcy for the giant mortgage company.

Second with 80.6 billion dollars in loans was Ameriquest Mortgage, now part of the Citigroup family. Third with 75.9 billion was New Century Financial Corp, which went bust in 2007 and now faces a federal investigation.

"The centre found that US and European investment banks invested enormous sums in sub-prime lending due to unceasing demand for high-yield, high-risk bonds backed by home mortgages," Dunbar said.

"The banks made huge profits while their executives collected handsome bonuses until the bottom fell out of the real estate market."

Two of the sub-prime lenders have been seized by the US government: Washington Mutual, owner of Long Beach Mortgage (fifth on the list), and IndyMac Bank (number 14).

The top foreign-owned lender at number nine was HSBC Finance, part of the British-based banking giant HSBC. EquiFirst (16th on the list) was shut down by its British owner Barclays Bank in February.

Others such as RBS Greenwich Capital Investments - part of the Royal Bank of Scotland - and Swiss bank Credit Suisse First Boston were major backers of sub-prime lenders, the study said. - AFP/de
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Re: Subprime

Postby millionairemind » Fri May 08, 2009 1:51 pm

From DSHORT.COM

Mortgage Resets and the Market
May 7, 2009

The S&P 500 is up nearly 36% from its bear market low on March 9th. Sentiment is somewhat less negative on several fronts. Credit crisis indicators, the ADP employment report, bank stress test leaks, and the market rally itself have all encouraged optimism that the worst is over.

According to Wall Street, the market is forward looking. But has the market really discounted the future impact of continuing mortgage resets? Here's a widely circulated Credit Suisse histogram of resets to which I've added a thumbnail of the S&P 500 matching the timeline from October 2007 to the present. There are a lot more resets ahead — option-adjustable, prime and alt-A — over the next 2 1/2 years.

Image
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: Subprime

Postby mojo_ » Mon Aug 17, 2009 10:05 pm

Subprime comes to India and microfinance :?

The Wall street journal
AUGUST 13, 2009

A Global Surge in Tiny Loans Spurs Credit Bubble in a Slum
By KETAKI GOKHALE

RAMANAGARAM, India -- A credit crisis is brewing in "microfinance," the business of making the tiniest loans in the world.

Microlending fights poverty by helping poor people finance small businesses -- snack stalls, fruit trees, milk-producing buffaloes -- in slums and other places where it's tough to get a normal loan. But what began as a social experiment to aid the world's poorest has also shown it can turn a profit.

That has attracted private-equity funds and other foreign investors, who've poured billions of dollars over the past few years into microfinance world-wide.

The result: Today in India, some poor neighborhoods are being "carpet-bombed" with loans, says Rajalaxmi Kamath, a researcher at the Indian Institute of Management Bangalore who studies the issue. In India, microloans outstanding grew 72% in the year ended March 31, 2008, totaling $1.24 billion, according to Sa-Dhan, an industry association in New Delhi.

"We fear a bubble," says Jacques Grivel of the Luxembourg-based Finethic, a $100 million investment fund that focuses on Latin America, Eastern Europe and Asia, though it has no exposure to India. "Too much money is chasing too few good candidates."

Here in Ramanagaram, a silk-making city in southern India, Zahreen Taj noticed the change. Suddenly, in the shantytown where she lives, lots of people wanted to loan her money. She borrowed $125 to invest in her husband's vegetable cart. Then she borrowed more.

"I took from one bank to pay the previous one. And I did it again," says Ms. Taj, 46 years old. In four years, she took a total of four loans from two microlenders in progressively larger amounts -- two for $209, another for $293, and then $356.

At the height of her borrowing binge, she says, she bought a television set. The arrival of microfinance "increased our desires for things we didn't have," Ms. Taj says. "We all have dreams."

Today her house is bare except for a floor mat and a pile of kitchen utensils. By selling her TV, appliances and jewelry, she cut her debt to $94. That's equal to about a fourth of her annual income.

Around Ramanagaram, the silk-making city where Ms. Taj lives, the debt overload is stirring up social tension. Many borrowers complain that the loans' effective interest rates -- which can vary from 24% to 39% annually -- fuel a cycle of indebtedness.

In July, town authorities asked India's central bank to either cap those rates or revoke lenders' licenses. "Otherwise, the present situation may lead to a law-and-order problem in the district," wrote K.G. Jagdeesh, deputy commissioner for the city of Ramanagaram, in a letter to the central bank.

Alpana Killawala, a spokeswoman for the Reserve Bank of India, said in an email that the central bank doesn't as a practice cap interest rates for microlenders but does press them not to charge "excessive" rates.

Meanwhile, local mosque leaders have started telling people in the predominantly Muslim community to stop paying their loans. Borrowers have complied en masse.

The mosque leaders are also demanding that lenders give them an accounting of their finances. The lenders say they're not about to comply with that.

The repayment revolt has spread to other communities, including the nearby city of Channapatna, and could reach further across India, observers say.

"We are very worried about this," says Vijayalakshmi Das of FWWB India, a company that connects microlenders with financing from mainstream banks. "Risk management is not a strong point for the majority" of local microfinance providers, she adds. "Microfinance needs to learn a lesson."

Nationwide, average Indian household debt from microfinance lenders almost quintupled between 2004 and 2009, to about $135 from $27 or so, according to a survey by Sa-Dhan, the industry association. These sums are obviously tiny by global standards. But in rural India, the poorest often subsist on just a few dollars a week.

Some observers blame a fundamental shift in the microfinance business for feeding the problem. Traditionally, microlenders were nonprofits focused on community service. In recent years, however, many of the larger microlending firms have registered with the Indian central bank as a type of for-profit finance company. That places them under greater regulatory scrutiny, but also gives them wider access to funding.

This change opened the door to more private-equity money. Of the 54 private-equity deals (totaling $1.19 billion) in India's banking and finance sector in the past 18 months, microfinance accounted for 16 deals worth at least $245 million, according to Venture Intelligence, a Chennai-based private-equity research service.

The influx of private-equity cash is the latest sign of the global rise of microfinance, pioneered by Bangladeshi economist Muhammad Yunus decades ago. On Wednesday, Mr. Yunus, a 2006 Nobel Peace Prize winner, was one of 16 people honored by President Barack Obama with the Medal of Freedom.

"We've seen a major mission drift in microfinance, from being a social agency first," says Arnab Mukherji, a researcher at the Indian Institute of Management in Bangalore, to being "primarily a lending agency that wants to maximize its profit."

Making loans in poorest India sounds inherently risky. But investors argue that the rural developing world has remained largely insulated from the global economic slump.

International private-equity funds started taking notice of Indian microfinance in March 2007. That's when Sequoia Capital, a venture-capital firm in Silicon Valley, participated in a $11.5 million share offering by SKS Microfinance Ltd. of Hyderabad, India, one of the world's largest microlenders.

"SKS showed the industry how to tap private equity to scale up," said Arun Natarajan of Venture Intelligence.

Numerous deals followed with investors including Boston-based Sandstone Capital, San Francisco-based Valiant Capital, and SVB India Capital Partners, an affiliate of Silicon Valley Bank.

As of last December, there were over 100 microfinance-investment funds globally with total estimated assets under management of $6.5 billion, according to the Consultative Group to Assist the Poor, or CGAP, a research institute hosted at the World Bank.

Over the past year, investors have poured more than $1 billion into the largest microfinance funds managed by companies, a 30% increase. The extra financing will allow the industry to loan out 20% more this year than last, much of it to countries such as the Ukraine, Cambodia and Bosnia, CGAP says.

Here in Ramanagaram, Lalitha Sharma recalls when the first microfinance firm arrived seven years ago. Those were heady times for her fellow slum-dwellers: Money flowed freely. Field agents offered loans to people earning as little as $9 a month.

They came to Ms. Sharma's door, too. She borrowed $126. Under the loan's terms, she said she would use it to finance a small business -- a snack stand she runs with her husband. Many microfinance providers require loans to be used to fund a business.

But Ms. Sharma, a 29-year-old mother of three, acknowledges she lied. "You have to mention a business to get a loan," she says. "There was no other way to get the money." She used it to pay overdue bills and to buy food for her family. Ms. Sharma earns $8 a week, on average, in a factory where she extracts silk thread from cocoons.

Over the next four years, she took nine more loans from three different lenders, in progressively larger sums of $209, $272, $335 and $390, according to lending records reviewed by The Wall Street Journal. A spokesman for BSS Microfinance Private Ltd. of Bangalore, another of her lenders, declined to comment on her borrowing history, citing central-bank privacy rules.

This year, she took another $314 loan to pay for her brother-in-law's wedding, again saying the money would be used for business purposes. She also juggled loans from two other microlenders -- $115, $167 and $251 from the Bangalore lender Ujjivan, and $230 from Asmitha Microfin Ltd.

Ujjivan confirmed it issued three loans. An Asmitha official said he had a record of a loan to a Ramanagaram resident named Lalitha, but at a different address.

"I understand that it is credit, that you have to pay interest, and your debt grows," Ms. Sharma says. "But sometimes the problems we have seem like they can only be solved by taking another loan. One problem solved, another created."

Many of the problems in Indian microlending might sound familiar to students of the U.S. mortgage crisis, which was worsened by so-called "no-documentation" loans and by commission-paid brokers. Similarly in India, microlenders' field officers are often paid on commission, giving them financial incentive to issue more loans, according to Ms. Kamath.

Lenders are aware that applicants often lie on their paperwork, says Ujjivan's founder, Samit Ghosh. In fact, he says, Ujjivan's field staffers often know the real story. But his organization maintained a policy of "relying on the information from the customer, rather than our own market intelligence."

He says that policy will now change because of the trouble in Ramanagaram. The lender will "learn from the situation, so it won't happen again," he says.

It's tough to monitor how borrowers spend their money. Ujjivan used to perform regular "loan utilization checks," but stopped because it was so costly. Now it only checks in with people borrowing more than $310, Mr. Ghosh says.

BSS checks how loans are being spent a week after disbursing the money, and makes random house visits, according to S. Panchakshari, its operations manager. The company doesn't have the power to insist that borrowers not take loans from multiple lenders, he said in an email.

Lenders also tend to set up shop where others have already paved the way, causing saturation. There is a "follow-the-herd mentality," says Mr. Ghosh at Ujjivan. Microlenders "often go into towns where they see one or two others operating. That leaves vast chunks of India underserved, "and then a huge concentration of microfinance in a few areas."


In Ramanagaram district, seven microfinance lenders serve 22,500 women (most microloans go to women because lenders consider them less likely to default than men). Loans outstanding here total $4.4 million, according to the Association of Karnataka Microfinance Institutions, a group of lenders.

Lenders in Ramanagaram say the loan-repayment revolt was instigated in part by Muslim clerics who oppose the empowerment of women through microfinance. Most lenders are still servicing loans to Hindu borrowers, but have stopped issuing fresh loans to Muslims. "We can't do business with Muslims there right now," says Mr. Ghosh. "Nobody wants to take that kind of risk."

The irony is that, for years, Indian microlenders have touted themselves as bankers to the nation's impoverished minority Muslim community, which has long been excluded from the formal banking sector.

A 2006 report commissioned by India's prime minister found that while Muslims represented 13% of India's population, they accounted for only 4.6% of total loans outstanding from public-sector banks.

Islam prohibits the paying of interest, but mosque officials don't cite that as the reason for the loan-payment strike. They stressed the overindebtedness of the community, and the strains it's putting on family life.

Ramanagaram's period of wild borrowing irks some residents, both Hindu and Muslim. Alamelamma, a 28-year-old vegetable seller, says that she has benefited from microfinancing and that the profligate borrowers "have ruined it for the rest of us."

One gully away, Ms. Sharma, the heavy debtor, has a different view: She would like to see the microlenders kicked out of the community entirely. "Not just for now, but forever," she says.

—Rob Copeland contributed to this article.Printed in The Wall Street Journal, page A1
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