Microfinace in India – 2006: A Sector Report

The Secor Report of Microfinance in India for the year 2006 has been released. The 172 page detailed report is written by Prabhu Ghat, an independent researcher, Journalist and Consultant. He was in the IAS, UP and a senior economist at the ADB.

Click here to download the full text report

Reliance, Bharti set to storm Microfinance

RELIANCE Retail and Bharti, which has joined hands with Wal-Mart, could storm the micro-credit space as they look to establish rural supply chain linkages to service their mega retail forays.

Read the full article here from Economic Times

Financial Inclusiveness

• Does India’s mainstream banking industry have the capacity, to address the issue of financial inclusiveness?
• Does para-banking (microcredit, self-help groups) increase the cost of providing credit to under-banked groups?
• Can access to cheap credit be widened by marshalling the traditional social order like the moneylenders, or would it undermine the cause?

Click here to read the views of Nachiket Mor, Mahpara Ali & Vikram Akula from Economic Times

Microfinance Bill leaves out MFIs

Excluding MFIs from the ambit of microfinance bill is an anomaly, says Vijay Mahajan, CEO, Basix………

THE MFI STORY

Total MFIs : 800

Total loan outstanding (2005) : Rs 1,100 crore

Projected loan by 2010 : Rs 12,800 crore

Source: Sa-dhan Study

Read the article from Business Standard

Microfinance Bill

“The draft on micro finance is ready and is likely to be put before Parliament in the winter session,” Vinod Rai, special secretary (banking and finance), government of India, said at a CII meet.

Read full article from Times of India

Microcredit Death – Microfinance

The recent suicides by more than 60 self-help group (SHG) members in Andhra Pradesh went unnoticed amidst the spate of farmers’ suicides in Vidarbha….

Read the full article here from TOI

Report on Microfinance

Linkages between banks and external entities may be established under two broad models; (i) Business Facilitator Model wherein banks may use civil society organizations (CSOs) and others for undertaking non-financial service and (ii) Business Correspondent Model wherein institutional agents/other external entities could support the banks for extending financial services.

Read the full article release from PIB

Micro-finance in disaster control

An another column writing in Business Standard by Keya Sarkar on Microfinance

Read the full article here

National Disaster Management Authority (NDMA), government of India, is planning to have “Preliminary meeting on Micro Finance” to be held in New Delhi on August 3. Others invited were mostly CEOs of some of the larger finance companies, the joint secretary (B&I), ministry of finance; secretary, Sadhan, the national micro finance association; and H R Khan, CGM and Principal, College of Agricultural Banking.

Serious focus on Microfinance by major Banks

India’s Banks major financial institutions are now starting to focus on Microfinance, Major Banks like ABN Amro (ABN), Standard Chartered (SCBFF), HSBC (HBC), and Citigroup (C) are moving into the microfinance sector.

Read the full article in Business Week

Micro-finance Productive @ 40%

An Article in Business Standard shows that “Consultative Group to Assist the Poor (CGAP) a consortium of 33 development agencies that support micro-finance, has found nothing wrong in micro-finance institutions (MFIs) charging up to 40% interest from poor borrowers.”

Another Mention is…
Making a hypothetical comparison, it says if a big lender lends $10,00,000 to a single borrower and a micro lender makes 10,000 loans of $100 each to build the same size of loan book, assuming the big lender’s loan is repaid quarterly, it has to process four payment transactions per year. A micro-lender’s borrowers, however, probably make repayments monthly or even more frequently, generating at least 1.2 lakh transactions per year. While the big lender’s administrative cost is $30,000 per year, that of a micro-lender is at least $2,00,000.