Andhra Pradesh chief minister K Rosaiah’s threats to take stringent action against the MFIs, for charging what he calls unreasonably high interest rates, and to put down the activities of the so-called unregulated MFIs with an iron hand, will not only discourage the MFIs from providing credit to the poor but also push them back into the hands of the usurious moneylenders, who were historically the only source of loans to the poor. The only reasonable point made by the chief minister was the need to curb the arm-twisting methods used by the MFIs to recover the loans. Coercion and use of unethical practices for loan recovery has to be firmly dealt with by the state and there are enough provisions in the legal statutes to deal with such crimes.