 One of the most popular programs for helping the world's poor has gone sour in India. Microcredit, the practice of making small loans to very poor people, grew into a multibillion-dollar business. But microfinance companies have been accused of predatory lending and collection practices so harsh that they drove some borrowers to suicide. One state government in India has enacted legislation that will, in effect, put the microlenders out of business.
 In an attempt to revive the crisis struck Microfinance sector, the International Financial Corporation, IFC a private sector arm of the World Bank Group is exploring avenues to facilitate fund flows to MFIs. This is an important development in the wake of the industry suffering continuous setbacks.
 Shanti Microfinance, a not-for-profit organization, is raising a $772,000 (£500,000) fund backed by UK and Silicon Valley entrepreneurs and venture capitalists. The firm has already disbursed £10k (USD) and plans to start its operations in Gujarat before moving to Mumbai next year.
Microfinance has lost its soul. Six fundamental shifts in the practice of microfinance have left it operating more like a for-profit bank and less like an innovative pro-poor movement.
Debate over the value of microfinance in the developing world appears to be long overdue. Arguments against microfinance center around the claim that it is a development strategy increasingly forced on the poor, and that those who are claimed to benefit from it the most--poor women--are actually its chief victims. Critics have long sought a platform to reveal the weaknesses and explode the myths supporting microfinance.
A meta-evaluation on microfinance released by the Evaluation Cooperation Group of international financial institutions reports that microfinance operations have had difficulty in reaching the very poor.
Microfinance was supposed to mean economic empowerment for the poorest of the poor, many of them female villagers living in India's southeastern state of Andhra Pradesh. Instead, the sector has spiralled into crisis in recent weeks, where the state is blaming 57 recent suicides on aggressive loan collectors.
Capping microfinance interest rates will hurt the poor. There are better ways to regulate the industry.
WAM began in 2003 after women professionals in the microfinance industry, most of them based in Washington, DC, began meeting, at first informally in each others' homes. This growing group of WAM Founders came together to discuss areas of common concern, to decide if a more formal organization made sense, to explore what such an organization might do to support women who work in the microfinance industry and, ultimately, to support the development of the industry itself. After several months of planning and program design, WAM was formally launched in October 2003. Membership has grown steadily since.
The recent controversy surrounding the microfinance sector has entirely eclipsed the fact that it is the first effort in India to have delivered financial services to remote corners of the country in a self-sustaining manner. The stakes are high for India’s poor, and we have to pave the way for orderly growth in the sector. Here is our view on some key issues that have featured in the current debate.
 Probanx Information Systems specializes in development of software for the financial institutions, offering multi-currency and multi-lingual banking systems with a large variety of modules, based on the latest technologies. We install and support turn-key international Banking Software and Microfinance Software solutions for retail banks, commercial banks, Internet banks and microfinance banks.
India’s microfinance industry has warned it is being pushed to the brink of collapse, as a result of a bank freeze on credit to microlenders triggered by a political crackdown.
India’s commercial banks, which normally provide about $133m a week in credit to the microloan industry, have frozen those disbursals for the past two weeks, as companies wrestle with a backlash in one of their biggest markets, the state of Andhra Pradesh.
Even as the microfinance sector is facing the possibility of new regulations that will reduce interest rates lenders charge in Indian hinterland, perhaps resulting in a drop in margins, rich Indians still feel there is money to be made at least in firms providing services to firms doing business at the ‘bottom of the pyramid’.
Microfinance has had a quick slide down the popularity charts— from being celebrated as a magic wand against poverty to being condemned as a business riddled with loan sharks.
A group of India's largest microfinance institutions filed a lawsuit Tuesday to block strict new regulations laid down by the state of Andhra Pradesh — a crucial market for small loans — after reports that high interest and coercive loan collection by microfinance groups had led to some 30 suicides.
 Samasta Microfinance is a public limited, for profit Non Banking Financial Company, established in March 2008. We offer microfinance solutions to the urban and rural poor in South India, and currently operate in the states of Tamil Nadu and Karnataka. Their aim is to drive social change and be a catalyst for entrepreneurial ambition by providing a host of financial and non-financial products to our members. Their loan products are geared towards income generation supplemented by loans for education and social commitments. Samasta's operations use the Joint Liability Group (JLG) model.
Highlighting the vast untapped potential of the sector, SBP acting governor said that Pakistan is among the few countries in the world where microfinance activities have been gradually mainstreamed into the formal financial system.
Microfinance doesn’t help the very poor.
While the argument that all the attention the microlending industry attracts sometimes diverts funds from reaching programs that need it more is not new, we were surprised to see it outlined by Vikram Akula, the founder of SKS Microfinance Ltd.
SKS Microfinance Limited, the largest Micro Finance Institution in India, today announced that its public issue will open on July 28.
Infosys provides a complete range of IT consulting outsourcing services based on strong domain and business expertise and strategic alliances with leading technology providers. Infosys' service offerings span business and technology consulting, application services, systems integration, product engineering, custom software development, maintenance, re-engineering independent testing and validation services, IT infrastructure services and business process outsourcing (BPO). Infosys is a leading global IT organization with over 40 offices and development centers in India, China, Australia, the Czech Republic, Poland, the UK, Canada and Japan.
TATA Consultancy Services Financial Solutions (TCSFS) is a global and innovative company with a strategic focus on the present and future requirements of financial institutions. TCSFS goal is to enable their clients to meet the business challenges of modern-day banking and to achieve and sustain a competitive edge. TATA Consultancy Services acquired the former TKS Group.
The second day of ‘Microfinance Cracking the Capital Market’ Conference began with an insightful perspective on future Institutional Investments in the Indian microfinance space. Victoria White, Vice-President and Director, India, ACCION and Alok Prasad, Country Manager-Microfinance, Citi India welcomed the audience with a brief remark on the need and future prospect of institutional investments which the industry requires.
Microfinance is going mainstream as international investors look to boost the value and the reach of small microlending institutions. As a result, the industry is likely to attract mainstream scrutiny from the press.
With hundreds of fledgling entrepreneurs ready to change the world and maybe make millions while they do it, the buzz around the microfinance industry looks a bit like the dot-com boom at the end of the ’90s.
What's the impact of microfinance? A question with 150 million answers, one for every client around the world who receives microfinance services.
Private equity investments have put a premium on the valuation of microfinance companies when maybe they should be giving them a discount. By Eric Bellman
Motivations and initiatives should not be judged on how much or how little they can do. These remain the single most visible sign of a society that is alive.
Helping women from poor households to establish small businesses is the daily work of the Timorese microfinance institution Tuba Rai Metin (TRM). Their belief is that the prosperity of Timor-Leste has to be built upon the prosperity of the most important structure in society, the family unit.
The global micro finance body set up by World Bank has elected India's Vijay Mahajan as Chairman of its Executive Committee.
Microfinance — making tiny loans to poor people or groups of poor people — has soared in India in the past few years. Before long, it could reach more people in India than the regular banking system.
This is an extraordinary story of women's empowerment in rural India. Women in Satara district in Maharashtra run a bank and a B-school successfully.
Offbeat financal avenues find buyers slowly but steadily. With the global meltdown behind, European debt crisis ahead, global economists are busy pondering new sectors like microfinance, carbon finance, water credit and so on to find hope for market expansion.
Even as financial inclusion emerges as one of the top goals of government and Reserve Bank of India, Microfinance Institutions (MFIs), which are the pioneers of financial inclusion, are finding themselves in a bit of soup, strangely enough for fats growth and for big profits. So are MFIs doing too much too fast?
Sheetal Mehta is founder of Shanti Microfinance, which is a social enterprise charity that provides access to technology and capital for entrepreneurs in slums and villages in Gujarat, India.
A new microfinance bill that was recently introduced in the Indian Parliament would remove the cap on microloan interest rates. Although there would be no cap on interest rates, the regulatory body would “advise” microfinance institutions to keep rates low and would “closely monitor” them, according to government officials.
The Governor State Bank Syed Salim Raza said Islamic banking will be launched in microfinance sector.
Women’s empowerment is one of the subjects included in the bilateral discussions between India and the United States, said Andrew T. Simkin, U.S. Consul General in Chennai, here on Friday.
Probanx Information Systems specializes in development of software for the financial institutions, offering multi-currency and multi-lingual banking systems with a large variety of modules, based on the latest technologies. We install and support turn-key international Banking Software and Microfinance Software solutions for retail banks, commercial banks, Internet banks and microfinance banks.
Kingsolver, the bestselling author writes of a visit to the rural countryside of Orissa in northeastern India, where she interacted with the Akandalamuni Women's Club, which has 15 members. "Like millions of women in South Asia, they started their own microcredit group. Attending twice-monthly meetings and putting two rupees per month (about four cents) into a joint savings account qualified them for small loans, collateralized by group guarantee. This year they borrowed enough to rent a five-acre plot for growing sugar cane, from which they share the proceeds."
India should work towards empowering women economically -- through microfinance programs -- and also encourage greater participation of women leaders in panchayats, or village councils, writes author Shoba Narayan in this opinion piece.
A fresher, integrated approach to workplace learning can have a positive role in India's ability to turn its unique demographics into a dividend writes Angie Taras
“IF WE stop thinking of the poor as victims or as a burden and start recognising them as resilient and creative entrepreneurs and value-conscious consumers, a whole new world of opportunity will open up.” That “simple proposition” begins a controversial new management book that seems destined to be read not just in boardrooms but also in government offices. “The Fortune at the Bottom of the Pyramid. Eradicating Poverty Through Profits” (Wharton School Publishing), is essentially a rallying cry for big business to put serving the world's 5 billion or so poorest people at the heart of their profit-making strategies.
An educational initiative between Rice University computer scientists and Indian educators will enable schools in rural India to be some of the first to benefit from Rice's revolutionary, low-energy computer chips. Rice's Krishna Palem, the inventor of the energy-stingy chips, said his team is creating a solar-powered electronic slate, or I-slate, an electronic version of the blackboard slates used by many Indian schoolchildren.
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