The Andhra Pradesh (AP) Microfinance crisis has attracted the attention of researchers, academicians, and policy makers for analyzing the reasons of failure and also for suggesting suitable policy measures for its revival. The rapid expansion of lending in search of abnormal returns, lose regulation, and unprecedented reactions of burdened customers, and the possible contagion to the financial sector has brought the RBI's intervention. This paper believes that short-term customer protection measures would not ameliorate the situation. Microfinance Industry, with its linkages to other constituents in the financial services sector, requires integrated, multi-dimensional, strategic initiatives for long term sustainable growth and avoidance of future systemic shocks. Better governance for trust, market diversification to avoid concentration risk, collaborative competition to harness the value chain, and market nurturing for sustainability are suggested at strategic level. Streamlining operations with IT integration, improving productivity of manpower, and effective credit appraisal are suggestions at operational level.