Advocacy and Development
MFIN engages with key stakeholders of the microfinance industry, specifically with the Reserve Bank of India (RBI), Ministry of Finance (MoF), MUDRA/SIDBI, UIDAI and the Ministry of Urban Development.
MFIN is also a part of various think tanks and discussion forums including the RBI’s Financial Inclusion Advisory Committee, the MUDRA Board, the PSIG Think Tank and the ACCESS Assist Advisory Group.
MFIN has established a number of Task Forces for focused action on specific areas of activities that, from an overall industry standpoint, are deemed critical. The Task Forces comprise of representatives of member institutions who help drive specific initiatives with the support of the MFIN Secretariat.
The Advocacy & Development vertical works with the Advocacy and the Credit Bureau Task Forces (TF). The Advocacy Task Force is responsible for engaging with the RBI, Central Government, State Governments, and other key stakeholders and decision makers. The Task Force holds regular dialogues with key policymakers to create a favorable operating environment for the Microfinance Industry. The Credit Bureau Task Force is responsible to develop the credit bureau ecosystem for the microfinance clients in the country.
Small MFIs Task Force: In the last couple of years, while funding to the industry has grown significantly, small MFIs still face challenges in accessing funds (both debt and equity). In this context, MFIN has established a small MFIs task force that addresses the challenges faced by small MFIs.
The information hub periodically published reports that provide trends and insights on the growth and status of the microfinance industry in India. These include
- Micrometer: Quarterly publication with trends on the key operational and financial indicators of the microfinance industry at a pan India and state level.
- MicroScape: Annual publication that captures financial health of the microfinance industry
- MicroSpread: Annual publication that captures outreach, portfolio quality and credit depth at district level. This publication is currently only available to MFIN members and associates.
- MicroMonitor: Monthly publication that captures Pan India/State/District level information on portfolio, disbursement and portfolio quality of MFIN members. This publication is currently only available to MFIN members and associates.
Credit Information Bureaus (CICs)
Pre-2010, an absence of comprehensive credit information was a key challenge in the development of the sector. MFIN members took the earliest steps in 2010 towards establishing a credit bureau which especially catered to the needs of this industry. MFIN facilitated the establishment of the first Credit Bureau for Microfinance clients (High Mark) aimed at improving credit risk management for MFIs.
Other mainstream Credit Bureaus, such as Equifax, CIBIL, and Experian now also offer services/products to the microfinance sector. In addition to encouraging a larger number of MFIs to join the Credit Bureau initiative, MFIN monitors the credit bureau compliance across its membership. The credit bureau activities of MFIN aim at: broadening of coverage of the Credit Bureaus, raising awareness about the credit bureau, and improving the credit bureau data quality.
As part of its mandate to improve the eco-system of the industry, MFIN undertook many initiatives in the area of Human Resources such as:
- Workshop of HR Heads
- Compensation and Benefits Study with Aon Hewitt
- National Occupational Standards and Training Module for Field Staff
The NBFC-MFI industry currently employs close to 80,000 employees. The Industry faces a lot of cross movement and most of the staff at the field level is let off without any proper action and documentation in case of negligence of duties or any other untoward behaviour and practice. The Industry also does not have any formal method of verifying references of new staff.
MFIN along with Equifax created and launched an Employee Bureau that would be a database with non-financial information of employees. The database currently does not have negative reporting and is indented to provide comprehensive information from across levels of a hierarchy of member MFIs to support their recruitment processes. As on date thirty-three institutions have signed up for the Employee Database.
A project titled “Study on adoption of cash-lite models among MFIs in India” was commissioned by MFIN which provides a compendium of different initiatives/experiments in DFS which have been undertaken by MFIs. The study shows potential of using cash-lite models. However, based on evaluation of these models, it is quite evident that despite many individual efforts, there hasn’t been any concerted movement towards DFS frameworks.
It is felt that there is a need to accelerate and scale-up DFS in micro-lending. MFIN along with HSBC is implementing a project that aims at finding an appropriate model to provide a basic standard of digital engagement to facilitate cashless disbursement and collections. In this project, the incubation of two cost-effective and scalable models for digital finance will be piloted that can lead to a positive customer experience and demonstration for wider adoption and use.