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A news source called “MySME News” has been launched in the Indian states of Karnataka and West Bengal, and Nepal, with the goal of reporting tailored business news via newsletters, mobile messaging, and community radio to microfinance customers and small and medium enterprise owners. MySME News is the initiative of three organizations: Internews Europe, a Paris-based company that funds community media projects around the world; Plural India, a New Delhi-based non-profit with a focus on reducing information asymmetries in the low-income sector; and Mahiti Infotech Pvt. Ltd., a social enterprise (for-profit, with all proceeds funneled back into the mission) that provides low-cost information technology to civil society groups. Shivendra Sharma, executive director of Plural India and former executive director of microfinance support network, PlaNet Finance, explained that the main source of information among the low-income sector is word of mouth, “Most people get it from 10 houses this side and 10 on that side.” Mahiti’s executive director, Sreekanth S. Rmeshaiah, said that the information gap is an impediment to smart investment choices: “The main idea of the project is to offer the poor a chance to make intelligent decisions through information.” Business information is also important to foster competition among microfinance enterprises (MFIs), as borrowers become more aware of their options.

Arman Financial Services Ltd, a “Non-Banking Financial Corporation” under Indian law, is planning to enter into the microfinance market for female entrepreneurs, according to a news report from the Hindu Business Line. The company’s Vice-Chairman and Managing Director Mr. Jayendra Patel noted that the decision was made partly due to the low default rate in microlending. He further commented that, “the Reserve Bank of India says that there is a 99.5 percent recovery ratio in microfinancing and our experience says that low income groups of people [seeking assistance jointly] are more bankable.”

Indian Bank, a Government-owned banking institution, has established the first of its Financial Literacy and Credit Counselling Centres (FLCC) in Dharmapuri, one of the 32 districts in Tamil Nadu on the Southeast coast of India. The FLCCs are being established under the umbrella of the newly created Indian Bank Trust for Rural Development (IBTRD). FLCCs will provide information on various financial products and services and advice on managing debt and finances as well as helping people to understand their rights and responsibilities with regards to finances. A proposed second FLCC may open in Puducherry a Union Territory bordering Tamil Nadu. The FLCCs will provide information at no charge to the client. Additionally, training institutes entitled Indian Bank Self Employment Training Institute will be established under the IBTRD in Andhra Pradesh, Tamil Nadu and Puducherry.

India’s state-owned Industrial Development Bank of India Limited (IDBI) has announced measures to increase the amount of credit to the microfinance industry. According to the Trading Market, the IDBI has reduced the interest rates for microenterprises, increased working capital limits, reduced the margin payment and provided softer loan terms for micro, small and medium sized enterprises (MSMEs). Loans for microenterprises have been reduced by 100 basis points from interest rates on November 30, 2008. It is also planning to grant need-based “ad hoc” working capital demand loans to MSMEs repayable in one year, as well as providing “adequate” increases in working capital limits to MSMEs.

Source: Business Today.

A unique information and communications technology (ICT) entrepreneurship development programme will be launched in the Tamil Nadu state in the South-eastern part of India. The project will be run through a partnership between Cisco Systems, the Small Industries Development Bank of India (SIDBI) and Tiruchirappalli Regional Engineering College-Science and Technology Entrepreneurs Park (TREC-STEP). Each partner will play an active role in the pilot programme, with SIDBI providing finance to small ICT businesses in India which will be run by former and current Cisco Networking Academy students. Cisco will subsidize the interest repayment and guarantee fees on the loans and TREC-STEP will provide customized training and mentoring to participants.