Confusion continues to reign in the debate on microfinance that has unfolded following the promulgation of the Andhra ordinance, soon to be replaced by Andhra Pradesh micro finance Institutions (Regulation of Money Lending) Act, 2010. A key confusion has been that microfinance is a major instrument of poverty alleviation. Going by the available scientific evidence and agreement among scholars, to-date, there exists no compelling study linking the expansion of microfinance to...

Even as the media celebrate the Mercedes Benz deal in the Marathwada region as a sign of “rural resurgence,” the latest data show that 17,368 farmers killed themselves in the year of the “resurgence.” When businessmen from Aurangabad in the backward Marathwada region bought 150 Mercedes Benz luxury cars worth Rs. 65 crore at one go in October, it grabbed media attention. The top public sector bank, State Bank of India,...

Fearing a default from Andhra Pradesh-based microfinance institutions (MFIs), whose cash flows have been disrupted by new laws, lenders have asked RBI to ensure stability by bringing the sector under its purview. In a meeting called by the Reserve Bank to discuss funding of MFIs, it asked banks whether the institutions were repaying loans on time and if the end-borrower was suffering because of the credit crunch faced by them. RBI...

“To make democracy function effectively, we must have inclusive growth. Microfinance has given a choice to those who were earlier excluded from the traditional institutional mode of finance. Since more than 80 per cent of Indian farmers do not get loans from such institutions, emergence of micro-finance has been beneficial to the rural poor.” Dr Amiya Sharma, executive director of the Rastriya Gramin Vikash Nidhi (RGVN) opined this at the fourth...

Indian Centre for Islamic Finance delegation makes presentation at Yojana Bhavan The Indian Centre for Islamic Finance (ICIF) has made out a strong case before Prime Minister's Economic Advisory Council member V. S. Vyas for introducing interest-free banking in the country at the earliest to ensure “inclusive growth with innovation” in accordance with the recommendations of the Planning Commission's Raghuram Rajan Committee. An ICIF delegation from New Delhi, led by its general...