On the six factors which cumulatively added up to India’s unprecedented cash squeeze

India’s current cash crunch is a real enigma. To begin with, there is its sheer unprecedented nature. In all the years since Independence, India has never seen something like it. “We have heard of coin shortages but never a cash shortage,” said MS Sriram, visiting faculty at the Indian Institute of Management-Bangalore’s Centre for Public […]

the new, new contours of financial inclusion

from the et special issue on modi sarkar completing 100 resplendent days in power, this story on financial inclusion… Every two years, India’s financial inclusion drive reformats itself into a brand new, entirely unrecognisable avatar. Till about three years ago, it starred banks, the Reserve Bank of India and banking correspondent companies. Then came DBTs […]

with the standing committee rejecting the mfi bill, old questions come back to haunt MFIs

and, after a long time, i write again on india’s search for regulatory mechanism for microfinance. With the Standing Committee on Finance rejecting the latest avatar of the microfinance bill, old questions about the microfinance sector have resurfaced. Since 2010, when the controversial Andhra Pradesh ordinance made it all but impossible for Microfinance Institutions (MFIs) […]

MFI Regulation, Part four. Why states should have a role

all right. so, here is something puzzling. Microfinance practitioners insist their embattled industry should not be regulated by state governments. State governments, they say, do not know how to regulate financial organisations. Keeping microfinance institutions (MFI) under the purview of the state government, they add, will leave microlenders vulnerable to political pressures. It is a […]

on the draft bill that seeks to set microfinance right

With the Finance Ministry completing its draft Microfinance Institutions (Development and Regulation) Bill, another large piece of the puzzle on how to regulate Microfinance Institutions has fallen into place. It has been a tough puzzle to crack. In the beginning of last year, when complaints about women being pushed into debt traps were gathering pace, […]

MFI regulation: Part Three

With SKS Microfinance challenging Andhra Pradesh’s controversial microfinance law in the Supreme Court, India might soon have an answer to the question: who should regulate microfinance institutions (MFIs), the Centre or the states? This is a question that needs an immediate answer. As non-banking finance companies (NBFCs), MFIs are regulated by the RBI. Being financial […]

Malegam-med

a day after after the initial optimism, the mfis figure that the old adage of ‘what one hand giveth, the other taketh away’ fits the malegam committee report perfectly. A day after a central bank appointed committee submitted its report, small microfinance institutions (MFIs) say the recommendations if accepted would wipe away their presence in […]

financial inclusion puzzles

Three decades after Independence, most poor Indians still lack institutionalised access to insurance, savings, remittances and loans. The outcomes are predictable. Migrant labour, carrying hard cash when they head back home, run the risk of being robbed. The poor rely excessively on loans to cope with a crisis — accidents, unpredictable weather, sick cattle — […]