MICROCAPITAL BRIEF: Finance Minister of India Vows Not to Strangle Indian Microfinance Industry

At a recent event, the Finance minister of India, Pranab Mukherjee, reassured Indian microfinance institutions (MFIs) that the government is not trying to suffocate the industry with new regulation.

“My idea is not to strangulate them (MFIs), but to regulate them so that the interest that they charge is not exorbitant,” said Mr Mukherjee. His comments came as the government of Andhra Pradesh is preparing the Microfinance Institutions (Regulation of Money Lending) Ordinance to rein in abusive practices of some MFIs [2].

The Indian MFIs reporting data for 2009 to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, have an aggregate loan portfolio of USD 4.6 billion, total assets of USD 5.1 billion and 26.4 million active borrowers.

By Trevor Kwong, Research Assistant

Sources and Additional Resources:

[1] Source Article: Smart Investor. IN: No intention to strangulate MFIs: FM:

http://www.smartinvestor.in/market/Marketnews-49683-Marketnewsdet-No_intention_to_strangulate_MFIs_FM.htm

[2] MICROCAPITAL BRIEF: Under Pressure from State Government of Andhra Pradesh, Indian Microfinance Institutions Agree to Cap Interest Rates at 24%:

https://www.microcapital.org/microcapital-brief-under-pressure-from-state-government-of-andhra-pradesh-indian-microfinance-institutions-agree-to-cap-interest-rates-at-24/

[3] Microfinance Information Exchange: India:

http://www.mixmarket.org/mfi/country/India

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