MFIN-INDIA MARCH 2015
Micro Finance Institutions Network: MFinclusion

Micro Finance Institutions Network :MicroVision

From The CEO's Desk

The Micro Finance Industry (MFIs) is once again at the cusp of great change. The Post-Oct. 2010 phase is coming to a close; new perspectives, new players, and new rules of the game is the emerging scenario. The implications of it all are deep and far-reaching. Collectively, we need to quickly take stock and develop strategies for dealing with the new landscape, both at an industry and individual MFI level. In many different kinds of ways, the future will have to be about ‘reimagining microfinance’.

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Voice From The Field

Rekha Patel has lived 38 years of her life in a non-descript village close to Bhopal in Madhya Pradesh along with her husband and three children. Her husband’s part time motor wiring work wasn’t enough to sustain the family’s basic needs.

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Viewpoint

The alphabet R resonates strongly in the life of Dr. Rajat Kathuria, regulator and researcher par excellence. Having worked with TRAI Telecom Regulatory Authority of India (TRAI) during its first eight years (1998-2006) he gained hands on experience with telecom regulation in an environment changing rapidly towards competition. The role entailed analysis of economic issues relating to telecom tariff policy, tariff rebalancing, interconnection charges and licensing policy. In a conversation with MFIN, Dr. Kathuria lays down the rules threadbare!

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Industry Watch

A round up of the important developments that the industry was privy to in the month of March.

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Reflections

Over Regulation, a Shrinking Sector and Regulatory Arbitrage

The financial sector in India today is changing to adapt to new realities and new points of view with a change in Government after a decade. Being a part of the RBI regulated NBFC MFI Sector, it is interesting to look at what impact this will have on the sector. The microfinance industry has been subject to quite an upheaval in the aftermath of the Andhra crisis which critically impacted the industry in terms of growth and MFIs had to go in for debt restructuring as businesses went under. A part of this crisis was of its own making and a certain part driven by external political factors. In an effort towards damage control, post the crisis, the RBI as the apex regulator of the financial services sector stepped in and brought in quite extensive and stringent regulation to ensure responsible lending behaviour and to protect vulnerable clients to whom MFI’s provided unsecured credit.

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Milestones

“When combined with information and communication technologies, microcredit can unleash new opportunities for the world's poorest entrepreneurs and thereby revitalize the village economies they serve”
- Madeleine K. Albright and John Doerr

1. The CEO of MFIN, Mr. Alok Prasad became a member of the Core Group set up by the Ministry of Finance (MoF) for the MUDRA Bank. The Core Group will be shaping the design and institutional framework of MUDRA Bank including drafting of the Bill. MFIN sent to The Ministry of Finance views from the Industry views on the proposed MUDRA Bank.

2. The first meeting of the Working Group for the revision of Industry Code of Conduct was held on 17th March 2015 in MFIN. The Working Group consists of SIDBI, IFC, MFIN SA-Dhan and M-CRIL.

3. The Industry Report based on the third round of Responsible Business Index 2014-15 (A) exercise was shared with the Members this month. This Report is based on non-validated, self-reported data aggregation of 47 MFIN member NBFC-MFIs

4. MFIN in association with ET Edge organised the Financial Inclusion Summit on the 26th of March 2015. Ms. Ratna Vishwanathan Deputy CEO represented MFIN in the panel Self-Regulatory practices in the Financial Sector.

5. MFIN is collaborating with National Skill Development Council (NSDC) on developing a set of National Occupation Standards (NOS) for loan officers.

6. IndusInd has joined MFIN as the newest Associate.

Micro Finance Institutions Network (MFIN) is the Association of Non-Bank Finance Company - Micro Finance Institutions (NBFC-MFIs). It was established in October 2009 as the primary representative body of NBFC-MFIs, all of whom are regulated by the Reserve Bank of India (RBI) and primarily engaged in the business of providing Microfinance to low income households. It also acts as the Self Regulatory Organisation (SRO) for the industry as mandated by the Reserve of India.
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Credits: Editor - Vaishali Mishra | Design & Layout - GlocalEdge