Building on Hyman Minsky’s 1977 work on financial instability, this paper presents a theoretical framework for understanding microfinance crises.

This position paper provides a holistic vision for the role of non-banking finance companies in India's credit ecosystem and the corresponding regulatory, supervisory and resolution frameworks that should apply to them.

There is a need to develop the regulatory capacity to monitor credit markets and to prevent and manage distress caused by over-indebtedness.