Yaga Venugopal Reddy , former Reserve Bank of India governor credited with saving the nation’s financial system from the 2008 meltdown, has said what many finance experts believed, but did not have the courage to admit publicly: microfinance is India’s subprime. “Ultimately, it’s something like subprime lending,” Mr Reddy told ET in an interview ahead of his book release. “The same incentives are operating here... it was securitisation and derivatives that...

A parliamentary committee has asked the government to consider incentivising private players to set up grain storage facilities as it prepares to implement the right to food. The government will require around 620 lakh tonnes of foodgrain annually to implement the food security law. The official procurement stood at 539.75 lakh tonnes in the recent marketing year. “(The) government should provide soft Loans at affordable rates and subsidies to private players to...

MICROFINANCE is an example of something that is sadly all too rare: an anti-poverty tool that usually at least breaks even. If you make small, uncollateralised business Loans to groups of poor women, they almost always repay them on time. It has grown rapidly in many countries, not least Bangladesh and India. With nearly 30m clients each, these are now the world’s biggest markets for microfinance. Yet the industry has...

The recent crisis in the micro-finance industry, brought about by some incidents in Andhra Pradesh, has led to the development of a new concept in the Indian thinking on development — that of “responsible finance”. Responsible finance is supposed to mean financial activities by companies that make just about enough returns to stay in business and charge rates of interest on Loans to the poor that are only marginally higher than what...

Sonia Gandhi visited a farmer widow's house in August 2004, soon after the UPA came to power. However, this visit did not bring as much change in her life as Rahul Gandhi's visit on July 18, 2008, to Kalawati's house. In fact, the damaged canal that led to the suicide by Ranjana Deshmukh's husband has still not been repaired. The struggles of Kalawati of Yavatmal and Ranjana Deshmukh of Wardha, both...