MFIs in India: Need Social Impact Monitoring
By Jagriti Bhattacharyya
The microfinance industry in India witnessed unprecedented growth over the last couple of decades; from just a few players offering SHG and JLG loans to a matured market, the industry has come a long way. The model had its genesis as a poverty alleviation tool, focused on economic and social upliftment of the marginalised sections through lending of small amounts of money without any collateral to women for income-generating activities. A recent report by MFIN, showed that the MFI loan portfolio had reached Rs 2.31 lakh crore at the end of FY2020, touching the lives of 5.89 crore customers.
Over the years, the sector has incorporated several changes in its operating model, including digital interventions across the lending value chain; these have enabled MFIs not only to reach a greater number of clients and thereby grow at a much faster pace, but also to do so in an efficient manner by streamlining processes and reducing turnaround times.
Photo courtesy of Jan Arendtsz.