The National Bank for Agriculture & Rural Development (NABARD), a state-run development bank in India, will encourage investment in microfinance institutions (MFIs) by offering funding to regional rural banks and cooperative banks to purchase ratings of MFIs [1,2]. The scheme will last until March 31, 2010 [1]. With the scheme, NABARD hopes to “encourage proper standards, systems and safeguards, efficiency and transparency” amongst MFIs [1]. NABARD has agreed to reimburse up to INR 300,000, the equivalent of over USD 6,000, to banks for the first rating performed by Crisil, M-CRIL, ICRA, CARE and Planet Finance or another approved agency [1]. Eligible MFIs to be rated must have loans outstanding worth a minimum of INR 5 million, the equivalent of over USD 107.7 thousand, and a maximum of INR 100 million, the equivalent of over USD 2.1 million [1].
By Christopher Maggio, Research Assistant
About:
National Bank for Agriculture & Rural Development (NABARD)
Description:
The National Bank for Agriculture & Rural Development (NABARD) was set up upon the recommendation of The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (CRAFICARD), a committee of the Reserve Bank of India. It was officially established in 1982. It has a “credit function” involving identifying potential uses of credit in rural areas, monitoring credit flow, issuing policy around credit, and providing credit facilities. Additionally, it has a “development function” to reinforce credit functions and make credit more productive, and a “supervisory function” to “[ensure] the proper functioning of cooperative banks and regional rural banks.”
NABARD does not report to the MIX Market, the microfinance information clearinghouse.
Organization’s Website:
http://www.nabard.org/index.asp
Contact:
http://www.nabard.org/contact.asp
Additional Resources:
Financial Express article entitled ‘Nabard aid for rating micro financial institutions’: http://www.financialexpress.com/news/Nabard-aid-for-rating-micro-financial-institutions/547738/
Reserve Bank of India: http://www.rbi.org.in/home.aspx
MICROCAPITAL STORY: India Post and NABARD Partner to Disburse Microcredit Throughout India: https://www.microcapital.org/microcapital-story-india-post-and-nabard-partner-to-disburse-microcredit-throughout-india/
Bibliography
[1] Financial Express article entitled ‘Nabard aid for rating micro financial institutions’: http://www.financialexpress.com/news/Nabard-aid-for-rating-micro-financial-institutions/547738/
[2] Nabard: http://www.nabard.org/index.asp
Source Article: Financial Express article entitled ‘Nabard aid for rating micro financial institutions’: http://www.financialexpress.com/news/Nabard-aid-for-rating-micro-financial-institutions/547738/
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