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Responsible lending key to microfinance
Mumbai: Microfinance institutions (MFIs) are still struggling for recovery after a crisis triggered by an Andhra Pradesh law in October 2010 that reined in MFIs, which lend small sums of money to poor borrowers; the state is India’s biggest market for such loans. The MFI sector was the subject of a Mint Clarity Through Debate event in Mumbai last week. Responsible lending is is key for the sector’s revival, according to the participants. Reserve Bank of India (RBI) deputy governor K.C. Chakrabarty; director of the Centre for Advanced Financial Research and Learning Usha Thorat; Basix group chairman Vijay Mahajan; chairman and managing director of Small Industries Development Bank of India Sushil Muhnot; International Finance Corporation’s regional manager, financial markets and private equity, Manoj Prashar; and Bandhan Financial Services Pvt. Ltd chairman Chandra Shekhar Ghosh were the panellists in the discussion. Mint’s deputy managing editor Tamal Bandyopadhyay moderated the discussion. Edited excerpts:
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Former Chairman of SKS Microfinance Akula Shares Lessons Learned
Vikram Akula, the former Chairman of SKS Microfinance, broke his silence today about the mistakes he made in his social venture, in a speech at the Social Enterprise Conference at Harvard. Akula acknowledged the legitimacy of the criticism he had received from Mohammad Yunus, 2006 Nobel Peace Prize Laureate Professor and Founder of Grameen Bank, who had long taken issue with SKS’s deployment of private capital in microfinance and its profit orientation.
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Commercial MFIs Can Make Markets Work for the Poor
Commercial microfinance institutions (MFIs) are an exemplification of making markets work for the poor. Are they indeed? A recent piece of research, comparing the lending performance of for-profit MFIs with not-for-profit MFIs, shows that though for-profit MFIs serve close to three-quarters of the market, the evidence does not seem to indicate that these MFIs lend indiscriminately when compared to their peers.
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Accion MFB Considers Customers’ Plight, Out With Low Interest Products
Accion Micro Finance Bank has come out with cheaper and low interest rate products to meet the needs of its customers.
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- Sub-Saharan Africa
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Microfinance Project Helping Low Income Group In Singapore
An innovative MicroCredit Business Scheme (MCBS) has been launched in Singapore to help people from low-income backgrounds create a sustainable income by establishing or expanding their small businesses. The project is a pioneering initiative in Singapore that is being implement as a collaboration between POSBank (POSB), Tote Board, and the Social Enterprise Hub.
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Akhuwat: Making Microfinance Work
A groundbreaking microfinance model is bringing out the best in society and bucking the trend of giving out loans that could realistically never be paid back.
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- South Asia
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Microfinance Services in Ghana Greeted With Hope, Concern
Microfinance, providing financial services to low-income clients, has gained popularity in Ghana in the past 20 years and has played an important role in helping the poor - especially women - improve their lives.
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- Sub-Saharan Africa
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Unitus Seed Fund Launches with Three Social Enterprise Investments in India
New Unitus Labs Initiative Seeks to Accelerate Development of Innovative Startups Which Have the Potential to Significantly Benefit Families Living on Less Than $2 Per Day
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- Investing
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- South Asia