Scope of microfinance in india

scope of microfinance in india

Scope to spread microfinance, say experts

By Our Staff Correspondent

NEW DELHI, FEB. 24. Microfinance has a profitable banking opportunity in India with over 11.36 million poor clients, 26 per cent of the total outreach of microfinance institutions of the world, meeting their financial needs from a range of organisations, including community-based microfinance networks and cooperatives. But importantly, there are 60 million potential clients of which 40-45 million are poor rural households. However, the major problem is to ensure a smooth flow of adequate amount of on-lending funds.

The Indian economy, with emphasis on potential in the microfinance sector and the difficulties faced by this sector are being discussed by the financial experts at a three-day international conference on `Microfinance India 2008' that began here today.

The microfinance is assisting 12 million self-help groups (SHG) in rural areas, mostly in the four southern States.

There is also a

large missing loan size that needs to be supplied by the microfinance institutions.

Thus, the scope to spread microfinance is clearly evident and the current indicators are favourable, Nancy Barry, President of Women's World Banking, said in her remarks.

"India's bank infrastructure is in place and the economy looks robust with interest rates having been liberalised.

The sharing of global experiences of private and public retail banks around the world will help India develop a strong formal and informal microfinance sector," she said.

Not sounding too happy with assessment of funds from both National bank of Agricultural Development (Nabard) and Small Industries Development Bank of India (SIDBI), David S. Gibbons, founder and executive chairman of CASHPOR Financial and Technical Services said while Nabard was not doing its job, SIDBI's conditions were not suitable for microfinance institutions.

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