Micro Finance Institutions (MFI s) are performing a vital role, and any attempt to impose a stifling regulatory regime on them may prove detrimental to the interests of small borrowers, founder and director of Global Microfinance Foundation, Bangalore, Satchidananda Sagola has said.
‘Natural response'
Speaking at a national seminar on “Microfinance Sector in India - Challenges and opportunities” organised at GITAM School of International Business here on Saturday, he said that MFI s were a natural response to a felt need.
They were built on the basis of trust and ethics and unnecessary interference by the government in the name of regulation could pose a threat to their existence.
Describing MFI s as the proverbial ‘golden goose', Prof. Satchidananda, who is also a former Regional Director of Reserve Bank of India, said that MFI s also needed to survive and care should be taken not to kill them in the name of ‘regulation'.
He felt that use of technology for cost reduction and compliance and implementation of better management systems would go a long way in strengthening them.
Delivering the keynote address the director of the Institute for Social and Economic Change, Bangalore, R.S. Deshpande, spoke at length about the inequalities in the credit delivery system in India.
He felt MFIs had started as “people's institutions” and they should be allowed to stay that way. Chief General Manager of National Bank for Agriculture and Rural Development (NABARD) P. Mohanaiah said that NABARD, set up in 1982, was the pioneer in the Self Help Group (SHG) movement in the country.
He said that it was a pity that more than six decades after Independence there were still many people who still do not have access to institutional credit. He felt that there was no need to shed tears over the collapse of MFI s as there were other institutions to take over the unfinished task. Chairman of Shirdi Foundation, Bangalore, Venkatrao Y. Ghorpade said that though MFI was an age-old concept, it was only during the last 25 years that it drew the attention of policy makers.It was synonymous with inclusive growth, women's empowerment and social obligations.
Earlier, Director of GITAM School of International Business V.K. Kumar welcomed the gathering.
