According to Reuters, India is planning to introduce legislation to regulate microfinance. Microlending organizations in the country have recently been accused of using coercive practices to collect repayments.
The microfinance sector in India is on the verge of collapse- it seems like the sector has been charging ridiculous amounts of interest, which have contributed to the accumulation of debts. The sector is currently unregulated.
It's important to note that these seem to be for-profit MFIs...
UPDATE: Here's another Reuters story that goes into more depth.