ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Killing the MFI Golden Goose

With microfi nance institutions being embroiled in controversies, the only viable way to reach much-needed credit to the poor might be to revitalise their own cooperatives. Through the intermediation of such bodies, large nationalised banks like the State Bank of India could completely cut out the middle class middlemen structure of the MFI and deal directly with poor village women, creatively extending the concept of "banking correspondents" to that of "barefoot bankers".

DISCUSSION
Killing the MFI Golden Goose Vithal Rajan But before the government kills this golden goose which laid its eggs for the rich, it may be wise to take stock of why it grew so quickly, and whether there are any other means available for reaching

With microfi nance institutions being embroiled in controversies, the only viable way to reach much-needed credit to the poor might be to revitalise their own cooperatives. Through the intermediation of such bodies, large nationalised banks like the State Bank of India could completely cut out the middle class middlemen structure of the MFI and deal directly with poor village women, creatively extending the concept of “banking correspondents” to that of “barefoot bankers”.

Vithal Rajan (vithal.rajan@gmail.com) is with the Confederation of Voluntary Associations, Hyderabad.

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