Source: The Economic Times.
Original article available here.
NEW DELHI, May 19 – The microfinance sector in the country is expected to grow nearly 10 times to reach INR 25,000 crore (USD 5.9 billion) in the next four years, a study says.
At present, the sector is estimated to be worth INR 2,700 crore (USD 630 million).
The study conducted by Sa-Dhan, an association of community development finance institutions, shows that the sector is projected to have a Compounded Annual Growth Rate (CAGR) of 76 percent.
Also, the microfinance client base is estimated at 40 crore (400 million) from the current 1.5 crore (15 million) poor people by 2018.
By 2012, an annual demand of at least Rs 25,000 crore (USD 6.25 billion at a conversion rate of Rs 40 to a dollar) can be expected, the study stated.
The study is based on data submitted by about 83 microfinance institutions as on December 2007.
It also stated that the government is supporting the sector and the Reserve Bank of India is providing the necessary incentives to the microfinance asset class.
Microfinance is estimated to be providing over 10 crore (100 million) people with access to micro credit many to thrift, some to insurance and a few so far to remittance transfers.
The report also said the industry should meet accountability at all levels for successful growth.
“External accountability to be provided by client success stories, internal accountability by the organisational hierarchy, forward accountability to be provided by continuous innovation and downward accountability to be provided by delivering effective and transparent services to end clients,” the report said.
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