Interest rates on loans from microfinance institutions (MFIs) are likely to be capped at around 24 per cent. Currently, MFIs are charging 26-40 per cent on small loans extended to their rural customers — many of whom are yet to get even a bank account — while urban customers get personal loans at 12 per cent from commercial banks. Though neither the RBI nor the government has fixed any ceiling on...

The Andhra Pradesh Microfinance Institutions (Regulation of Money Lending) Ordinance, 2010, suggests there’s more politics than understanding of economics that went into it. The setting up of district registering authority under the ordinance, with elaborate powers to even cancel licences, will increase risks of operations posing serious hazard to business plans and will jeopardise the whole MFI network. Especially stifling is the requirement that MFIs have to submit a monthly...

The accumulated interest collected by microfinance institutions (MFIs) on loans shall not exceed the principal amount, according to the much-awaited ordinance promulgated by Governor E.S.L. Narasimhan here on Friday to put a check on their activities. However, the Interest rate chargeable by the MFIs finds no mention in the ordinance as the government is of the view that this falls under the purview of the Reserve Bank of India (RBI), according...

Haryana Chief Minister Bhupinder Singh Hooda today said nationalised banks should reduce Interest rates as has been done by state cooperative banks on short-term loans to small and marginal farmers in the state. This issue was raised with State Bank of India officers here today on the occasion of signing of Memorandum of Understanding (MoU) between Lakshya Food India and State Bank of India (SBI), an official release said. The...

Last month, leaders from 185 countries met in New York to take stock of progress in achieving the Millennium Development Goals (MDGs) — which include, among other things, eradicating poverty and hunger, reducing child mortality, improving maternal health — that were set in 2000 by the United Nations. The aim was to achieve these goals by 2015. But 10 years down the line, the world is way behind targets in achieving...