Indian MFIs demand more incentives for working as business correspondents

Tuesday, August 12, 2014

According to survey by microfinance institution network (MFIN), published in February this year, nine out of 14 MFIs closed their operation as BCs in the recent past.

In June the Reserve Bank of India (RBI) allowed banks to appoint NBFC MFIs as business correspondent, a step in sync with the new financial inclusion programme of the government.

However, so far, the experience of MFIs, which have been operating as business correspondent of banks through their not-for-profit wings, has been ridden with operational difficulties.

Ahead of Prime Minister Narendra Modi’s announcement to roll-out a new financial inclusion programme on August 15, the microfinance representative body (MFIN), is likely to raise the issue at a meeting with the Union ministry of finance and banks on August 11.

Source: Business Standard (link opens in a new window)

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banking, financial inclusion, financial services, microcredit, microfinance, poverty alleviation