The editorial “Reforming microfinance” (Jan. 24) was right in saying the regulation of what has largely been an unregulated financial activity will succeed only if it is accompanied by guidelines that are easy to comply with. Recently, several directors of the MFIs resigned fearing arrest. Banks have failed to provide rural citizens with credit that they deserve at affordable rates. In fact, the MFIs provide a ray of hope to the village poor; it offers a chance to improve lives and reduce poverty. The MFIs not only provide money but also training, marketing and raw-material support, and general life mentoring. Obviously, there is need to regulate the rate of interest. But too many regulations by the government could damage the industry.
J. Venkat,
Chennai
