Dr. Alok Misra, CEO & Director – MFIN
As I reflect on the year gone by (2024-25), I am filled with both pride and purpose.
Pride, because this year marked a decade of our existence as a Self-Regulatory Organization (SRO) under the Reserve Bank of India. It has been ten years of working tirelessly to embed responsible lending, create a favourable ecosystem and strengthen client protection in the microfinance sector. More importantly, it has been ten years of walking alongside the millions of women borrowers who form the heart of our ecosystem. MFIN has been able to embody what an SRO should be.
Purpose, because the sector's resilience was once again tested this year. Starting from heatwave impact to external incitement by non-state actors to state level disruptions (Karnataka) and the summation of it all leading to dip in credit quality followed by drying up of liquidity, the sector faced immense challenges. Adversity has few friends, and the sector saw that in the form of unsubstantiated reports and whispers of a meltdown.
All along at MFIN with the support of our members, we strengthened our belief that financial inclusion outreach to 80 million low-income women borrowers is not just a statistic, it represents dreams supported, aspirations realized, and livelihoods protected.
The sector is instrumental in building an Inclusive India and embodies words of Maya Angelou ‘Try to be a rainbow in someone's cloud’. As such, each challenge only lays the groundwork for new strategies.
Following the above, strengthening of client selection process and credit underwriting became the focus of MFIN’s work. With collective wisdom distilled through CEO’s conclave “Manthan” and Mid-Year policy review, MFIN issued new norms termed as “Guardrails” for adoption by the sector. The norms address critical issues like holistic assessment of client debt and limiting number of lenders to one client. While this is what the lenders could do, the sector also requires ecosystem corrective measures from policy and regulation in the form of robust KYC-storable with CICs for dedupe, daily reporting to CICs, checking the arbitrage of retail and fintech lenders lending to microfinance clients, to foolproof the low-income lending market. These along with ensuring durable liquidity will be the focus of MFIN’s policy work for next year.
While the above took lion’s share of MFIN’s work - as at MFIN, we don’t just issue guidelines and standards but also monitor their adherence - several other noteworthy works were accomplished. Here, I would like to narrate a few.
The year saw Loan Officer online certification background work nearing completion, release of a series of client level awareness videos on Digital transactions and Natcat insurance product reaching the final stage of its launch. Further, during the year, RBI’s DEA workshops were conducted across India, HSBC funded project on advancing digital transactions was completed, a new initiative of “Microfinance Awareness Program - MFAP” was launched with 48 MFAPs conducted and a comprehensive data-based policy advocacy was pursued with the RBI on Qualifying Assets. MFIN’s active role in Karnataka situation ensuring that the Act keeps REs out of its ambit and curbing activities of non-state actors were also key. The year also saw completion of expansion of our membership base to include all regulated entities with retail microfinance lending. This broader canopy brings higher responsibility, and we are humbled by the confidence our members have shown in MFIN’s stewardship.
Our future work in addition to policy and regulatory issues listed above, will be focussed on building capacity of frontline staff through online certification, advanced data analytics for monitoring key trends and compliance, raising awareness about microfinance through MFAPs and mainstreaming parametric insurance framework to address climate-related risks. Each of these is a step toward reinforcing the foundation of responsible microfinance, where institutions grow not at the cost of clients, but alongside them.
But none of this is possible without the active engagement of our members. The true value of a network lies in collective accountability. MFIN is not just a platform, it is a commitment to shared values.
As India moves toward its $30 trillion economy vision by 2047, microfinance must play a catalytic role. MFIN, as always, will walk with the sector, moving the needle in policy, nudging the sector when needed, celebrating progress, and holding the mirror when required.
Don't judge each day by the harvest you reap but by the seeds that you plant.
— Robert Louis Stevenson
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Vision
To be an engine of inclusive growth for India and help provide financial services to 10 crore low income households in a responsible and transparent manner.
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Mission
MFIN’s primary objective is to work towards the robust development of the microfinance sector by promoting responsible lending, client protection, good governance and a supportive regulatory environment.
contact@mfinindia.org
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