Poor are more trustworthy and bankable, says India’s Finance Minister
Wednesday, October 2, 2013
Srinagar: Seeking to promote financial inclusion, Finance Minister P Chidambaram today called upon banks to focus on poor customers who are more trustworthy and “bankable” as compared to large borrowers.
“The poor of India are bankable, the poor of India can be trusted, the poor of India are good borrowers, the poor of India are honest borrowers and the poor of India are much better borrowers than the rich because of their repayment,” Chidambaram said, while speaking at the 75th anniversary celebrations of the J&K Bank here.
“We have an explosion in banking wherein a bank’s most trusted customers are not the rich but the poor,” he said, adding that it is “completely wrong” on a bank’s part to pursue only the rich.
He also exhorted banks to make tailor-made products designed keeping in mind the needs of the people, rather than pursuing a path of “innovation” that led to riskier products and caused the financial crisis of 2008, he said.
He, however, noted that we cannot escape the globalisation of finance, even though it poses its own perils.
“We have been witnessing an increasing number of poor accessing credit for diverse purposes like education, housing and starting a business,” the Finance Minister said, adding that only two percent of the loans given to the self help groups turn bad.