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

MicrofinanceSubscribe to Microfinance

Excluding the Poor from Credit

Andhra Pradesh and Telangana have become no-go areas for microfinance institutions due to the Andhra Pradesh Microfinance Institutions (Regulation of Money Lending) Ordinance, 2010 and, later, the Andhra Pradesh Microfinance Institutions (Regulation of Money Lending) Act, 2010. Contrary to their laudable objectives, these legislations have neither served public interest nor improved access to finance for the underprivileged sections. Instead, access to finance has contracted, and financial distress and fall in consumption levels of underprivileged households have increased. The law has hit the poor and the marginalised, by constricting their choices in accessing alternate modes of non-collateralised credit.

Need to Resurrect Rural Credit Institutions

A determined effort is called for to strengthen the rural credit system by creating new institutions if necessary and strengthening the multi-agency arrangement of commercial banks, regional rural banks and credit cooperatives and assigning to them specific regional, sectoral and functional responsibilities.

Myths about the Poor and Money

The Poor and Their Money by Stuart Rutherford; Oxford University Press, New Delhi, 2000; Rs 195, pp xii + 121.

Institutionalising Microfinance in India

There has been an increasing tendency to use the term microfinance - seen to be the most effective intervention towards poverty alleviation, to refer solely to formalised institutions - leaving aside a large informal section, that could include individuals and informal associations as well. Current efforts to mainstream microfinance operations in the non-financial sector of the country, while acknowledging the failure of state-owned credit institutions, should also take into account, among others, the programmatic success of several intermediary developmental institutions like the small savings and credit groups that have proved not only profitable but an effective poverty alleviation measure.
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