The microfinance industry in India is in the midst of the most severe crisis in its 25 year history. The genesis of the crisis lies with the actions taken by the government of the southern state of Andhra Pradesh in October 2010, when it passed legislation effectively shutting down all private sector microfinance institutions (“MFIs”) operating in the state. This report discusses how the Government of Andhra Pradesh has severely damaged private sector microfinance and put 450 million of India’s rural poor at risk.