NEW DELHI – Designed to give poor women easy access to small loans, India’s microcredit industry is battling for survival amid a political backlash, dwindling cash flows and high default rates.

To rein in the $4 billion industry, the government recently proposed a set of regulations that would require credit checks and crack down on the strong-arm tactics some lenders use to collect payments.

A government-appointed review panel has also recommended capping loan amounts and prohibiting women from borrowing from more than two lenders.

But microfinance advocates say such rules could kill an industry that has helped lift millions of women out of poverty.

“How can we promote the goal of financial inclusion for the poor with these restrictions?” said Sanjay Sinha, managing director of Micro-Credit Ratings International, a company that assesses the industry.

The panel also said an eligible borrower should earn less than $1,000 a year, a figure that some say excludes a large number of urban poor.

India’s central reserve bank set up the review panel after political parties called for an investigation of the industry.

The bank will decide in April which of the recommendations to adopt.

Concerns about the industry first surfaced last year, when authorities in the southern state of Andhra Pradesh reported that dozens of suicides might be connected to abusive lending practices.

The state, which has the highest number of microlending businesses in India, introduced a law banning aggressive collection practices and restricting the number of loans per borrower.

The law also called for greater disclosures by the lending companies.

But problems persist, and some women have stopped repaying their loans, said Jamuna Paruchuri, project manager for gender at Andhra Pradesh’s Society for Elimination of Rural Poverty.

“They just cannot cope anymore,” Paruchuri said.

In a meeting last week in Hyderabad, the state capital, women from self-help groups demanded compensation for those who had committed suicide and the arrest of the agents who harassed them.

“The companies are now asking us in the self-help groups to collect money from borrowers. But the companies did not consult us before luring women and dumping them with so many loans. It is not our responsibility to ensure they repay,” said Yadamma Yadaiah, 28, president of a women’s group in the village of Sultanpur.

About 200 women in her village have stopped repaying their loans since October, she said.