mfis

After suggesting that mfis should change 'flawed' business model, C Rangarajan, chairman of the Prime Minister's Economic Advisory Council, said the microlenders' interest rate margins should be capped.

Alarmed by the recent developments relating to microfinance institutions (mfis), ratings major Crisil has placed the ratings of 12 mfis on watch list and has indicated that there could be downgrades.

Close on the heels of AP government coming out with an ordinance to tackle the predatory practices of micro finance institutions (mfis), the Reserve Bank of India (RBI) on Friday announced the constitution of a sub-committee to look into the functioning of mfis.

mfis in India already serve more than 7 crore (70 million) unique borrowers, with the majority being women in rural areas. Though the sector plays a vital role by providing marginalised households and micro-entrepreneurs access to credit and other financial services, it faces challenges such as lack of product diversification.

The aggregate gross loan portfolio (GLP) of the micro finance institutions (mfis) grew by 54% in the second quarter of FY14, with over 90% mfis showing positive growth in this period over the second quarter of FY13, said Microfinance Institutions Network (MFIN) in its report ‘MicroMeter’.

Amid hue and cry over micro-finance institutions (mfis) charging the rural poor exorbitant interest rates, Reserve Bank of India norms continue to allow these entities a free hand in determining their charges. The banks lending to mfis too continue to have full discretion in fixing their rate of interest.

Microfinance institutions (mfis) would grow at an annual pace of 30%-35% over the next three years on the back of improved fund availability, ratings agency ICRA has said.

The state government on Friday issued an ordinance to regulate the operations of micro finance institutions (mfis) in the state.

Special chief secretary also stressed the need for expediting the enactment of Money-lenders' Act to rein in the mfis.

With their collection efficiency getting impacted amid disruptions caused by the second wave of Covid-19 pandemic, microfinance institutions (mfis) may see their credit cost in the 3-6 per cent range in the current fiscal, a report said.

The state government on Thursday decided to bring in an ordinance providing for three years of imprisonment and a fine of Rs 1 lakh for agents/working directors of micro finance institutions (mfis) that harass borrowers.

Private micro finance institutions' (mfis) vision of "eradicating poverty" is far removed from reality, say finance experts.

With the eight of the larger microfinance insitutions (mfis) — like Equitas, Suryoday, Utkarsh and Ujjivan, in India to exit the micro-finance industry, there are some concerns as to over-lending.

Chief minister K Rosaiah on Saturday urged the Union finance ministry and the Reserve Bank of India to clarify whether the state had the authority and power to regulate the interest rates being charged by micro finance institutions (mfis).

With micro finance institutions trying to lure the poor by introducing new products that supposedly do not come under the purview of MFI Act, the state government is all set to issue a notification that will replace the word "SHG women" and include a generic word "BPL households", so that mfis continue to adhere to the stringent norms laid down in the Act.

While directing the district collectors to be tough on erring Micro Finance Institutions, the state government on Saturday told the mfis to recover the payments once a month from the present weekly collection from rural borrowers.

A special cabinet meeting has been convened on Thursday to discuss what should go into the ordinance that will check the high interest rates being charged by micro finance institutions (mfis) .

The Andhra Pradesh government on Thursday requested the Y H Malegam committee, set up by the RBI to look into microfinance issues, to bar microfinance institutions (mfis) from raising funds from stock markets and private equity (PE) saying that such moves are profit-driven.