Monday, November 1, 2010

Regulating MFIs

Sriram and me have an article in this month's edition of Pragati that examines the issue of regulating micro finance institutions and its larger implications on the future of "social enterprises".

2 comments:

Jayan said...

(The comment went to wrong blog- copied to this one).

It very sad people do not realize why MFIs exist in the first place. Banks and Govt schemes cannot provide the extended help MFI 'could' offer. By offering write-off/take-over of MFI loans, Govt has made situation worse for MFIs and hence poor person. If the Govt is keel all it has to do is to provide loans at competent rates and in an easy way. No one would ever go to MFI.

Some of the recent death related to people taking loan for treatment. This alone exemplifies Govt failure. The insurance does not reach poor. Arogyasri does not reach the needy. The govt hospital does not have resources (medicine, nurses etc).

Govt should analyse why people goto MFI and fix the problem at its end.


I have a feeling the recent backlash against MFIs is funded by local-landlords and money lenders. They are the one who really benefit with skewed policies like subsidized fertilizer, power etc.

November 3, 2010 1:27 PM

gulzar said...

thanks jayan. agree with your analysis about the reason why MFIs exist.