NBFC-MFIs are distinct; no linkages with chit-funds: MFIN
MFIs operate under strict guidelines laid by RBI in a fair and transparent manner toward welfare and protection of borrowers
New Delhi/Kolkata, April 25, 2013: Microfinance Institutions Network (MFIN), the industry body representing Non Bank Finance Company – Microfinance Institutions (NBFC-MFIs) that constitute over 80% of the Indian microfinance sector (excluding the bank-linked SHG programs), has clarified that the RBI-regulated NBFC-MFIs are in no manner connected with chit-fund companies in any region, including West Bengal.
Highlighting the clear distinction, Alok Prasad – CEO, MFIN said, “On behalf of all its members, MFIN would like to clarify that no member NBFC-MFI has any linkage with chit-funds. Our member MFIs are non-deposit taking entities that operate under a tight framework of regulations, as laid down by the Reserve Bank of India (RBI). As institutions that primarily provide micro-credit to low income households, MFIs have a well-defined role in the formal, RBI regulated, financial system. The developments in West Bengal are indeed a matter of great concern and highlight the urgent need for a proper framework of regulations covering all types of institutions, irrespective of legal form.”
MFIN’s member NBFC-MFIs in West Bengal are Anjali Micro Finance, Arohan Financial Services, ASA International India Microfinance, Asmitha Microfin, Bandhan Financial Services, Bhartiya Samruddhi Finance Limited (BSFL), L&T Finance, SHARE Microfin, SKS Microfinance, Ujjivan Financial Services and Village Financial Services. It is reiterated that all of the above members are operating within the rules and regulations as laid down by the RBI and conducting their businesses in a fair and transparent manner.
No Benefit Accrued from the 2008 Farm Waiver Scheme: NBFC-MFIs
Microfinance Institutions Network urges for uniform regulation of Microfinance Institutions in India
New Delhi, February 08, 2013: MFIN, the industry body representing Non Bank Finance Company – Microfinance Institutions (NBFC-MFIs) that constitute 90% of the Indian microfinance sector (excluding the bank linked SHG programs), has clarified that the RBI-regulated NBFC-MFIs have not been beneficiaries of the Government’s 2008 Farm loan waiver scheme, as alleged in some newspaper reports. Mr. Alok Prasad, CEO, MFIN said, “Details of the reported CAG inquiry and its alleged findings being referred to in the newspaper report are not yet public. However, as the self-regulatory body of NBFC-MFIs in India, MFIN would like to clarify, on behalf of all its members, that no member MFI has been a beneficiary under the loan waiver program. If any other MFI (non-MFIN member) or banks have availed inappropriate benefits under the farm loan waiver scheme, then strong legal action should be taken against such institutions.”
Such allegations against the Microfinance Industry at large reaffirm the pressing need for a robust and uniform regulatory framework covering all Microfinance Institutions, irrespective of their legal form. We believe that the Microfinance Institutions (Development & Regulation) Bill 2012 will steer the industry towards greater client protection and transparency, and will ensure that all MFIs, irrespective of their size and legal form, adhere to the a uniform set of guidelines for the sector.
NBFC-MFIs are guided by regulations laid out by the Reserve Bank of India. They prioritize their borrowers’ interests above all, and conduct business in a fair and transparent manner.
