Skip to main content

Notes from a Conference

The Centre for Micro Finance (CMF) and the College of Agricultural Banking (CAB)  organized the 5th round of the annual conference titled ‘Microfinance: Translating  Research into Practice’ in January, 2012. The objective of the conference was to actively engage stakeholders and researchers in discussions relevant to current and future microfinance practice.

During the inaugural session, Ms. Kamala Rajan, Principal of CAB, mentioned that the microfinance sector in India has surprisingly achieved positive growth this year despite the crisis in Andhra Pradesh and related fears and funding issues. Adding to that point, Dr Prakash Bakshi, Chairman of NABARD, mentioned that the history of the microfinance industry in India is very much in line with the history of Indian banking, though, he also pinpointed that despite the different parameters to determine poor and poverty – we are yet to arrive at a common standard and that time has come where bankers will have to rely on evidence from research studies which can be translated into practice. He added that the current scenario calls for new processes, methodologies  and innovative ways by which more work can be done towards enhancing the prosperity and security for the poor.

The second session focused on Government programmes and measures in rural employment generation. The panelists had an in-depth discussion about the various facets of Government initiatives and what they intend to do in the future. Mr Sudhir Thakre from the Maharashtra Government mentioned that for sustainable development, one needs to look at the structure, strategy and the facilitator. He encouraged researchers to measure success stories so that the metrics of the same would become the new standard on the  basis of which replication or modification will be decided in other areas. He added that the delivery mechanisms need to be clearly thought out before rolling out a program, only then some meaningful change can be brought about. 

This was followed by a special presentation by Dr SL Kumbhare, Chief General Manager, Micro Credit Innovation Department, NABARD, on SHG Programme Version 2 and its main features.
The third session of the day dealt with the psychology behind mass defaults in joint liability loans. Lisa Nestor, Research Associate, CMF, presented a preliminary study on mass defaults that occurred in certain parts of east Maharashtra. Presiding over the session, Annie Duflo, Executive Director, IPA, shared that an avenue for future research would be  on how to mitigate contagion effect. The panelists shared their concerns by mentioning that though client engagement was high in Andhra Pradesh, it was not so in the case of a few  MFIs where the relationships were not personal, which slowly deteriorated the state of affairs. Yet, the exact reasons behind a mass default remain uncertain. The future of  financial services for the poor was the final topic to be discussed on day one. Ms TF Thekkekara opined that the microfinance industry is at the crossroads globally as well as in India. Though microfinance has smoothed consumption  and empowered women, poverty alleviation still remains a challenge. 

Graham Wright from MicroSave mentioned that looking at the demand side, the poor have a wide range of financial services that they seek and credit is not their top priority, contrary to popular belief. Savings
need to be looked at with top priority by all stakeholders. He added that the poor do not have secure reserves to build on the credit that they get and thus diverse set of financial needs need to be realized. The panelists suggested that the bulk of changes would be happening at the MFI level and in the regulatory framework. Understanding the dimension of the livelihoods of the poor and the use of new technologies hold the key to the future.

The second day of the conference began with the session on whether financial literacy can accelerate the financial inclusion drive. Deeptha Umapathy and Parul Agarwal from CMF  who have conducted studies on financial literacy mentioned that it is not just the financial products are complex, but the beneficiaries themselves as well. Taking cue from his  experiences in Jharkhand, MV Ashok, NABARD (Pune) was of the opinion that one must  take into account the sources of income for the rural poor. The aspect of whether the  source of income is agrarian or via remittances is relevant, contextual aspect needs to be  considered so that a better understanding of how financial literacy works can be achieved.

The final session focused on the scope and opportunities that lay in financing microfinance.  The panelists suggested that a strong market infrastructure and good underwriting  guidelines will help the industry in the long run. The strength of customer relationship and the protection standards are also areas that need to be looked at seriously. The valedictory  session of the conference was given by former Chairman of NABARD, YC  Nanda. He reminded everyone that microfinance sector exists to serve the poor and we  must realize that whatever objectives we set out for the future, as far as microfinance industry is concerned, the basic ideas of social welfare should not be ignored.


Popular Posts

Vocationalisation of education in India: Current Scenario, Key Challenges and New directions

“Every handicraft has to be taught not merely mechanically as is done today, but scientifically. This is to say, the child should learn the why and wherefore of every process.” - Gandhi’s Philosophy of Education

The greatest challenge in Indian education system today is to provide skill based education to the youth. This is exacerbated by a mismatch in demand and supply for the skilled workforce. The penetration of vocational education and training remains poor not only in rural areas, but also in urban regions where there is a higher installed capacity to impart the same. This post is an attempt to make the readers understand the need of vocational education in India. Also, this is an attempt to summarise a few recommendations on the same. 
A recent survey (61st round) conducted by the NSSO found that:

1. The percentage of population that completed primary education was 70%, but less than 10% went on to complete a graduation course and above. Almost 97% of individuals in the age bracket…

Rockstar of Financial Inclusion: Business Correspondent Model of India

About Author:  Jatinder Handoo is a social business enthusiast and a branchless banking practitioner. Currently works at FINO PayTech Ltd and is based out of Mumbai. He is reachable at
India is a hot bed of financial exclusion. A country which houses nearly 16% of the global population  has more than 65% of its people outside the formal financial system (Global Findex 2012). The Indian banking system has adopted multiple approaches to make universal financial inclusion a reality right from early days Indian post-independence banking system. Be it bank nationalization in 1969 or formation of Regional Rural Banks. Formation of NABARD or fostering microfinance through Bank-SHG linkage programme in early 90’s. A shimmering ray hope was rekindled with the growth of JLG based microfinance, however later studies made it clear that the model is credit led, concentrated predominately in the southern region of India thus could not be seen as painting complete financial…

A Platform for Knowledge - Enabling people to learn ..

I received a rather interesting link/website via my email today. The link read as MR University and all I could think of was, "Ok, this must be another website portal of some university or college". Well, on clicking the link and looking through the contents of the site, I was pleasantly surprised. The site is an online education portal or platform that allows users or teachers to upload short videos on topics or lessons they wish to impart. First topic that I come across is Development Economics.
The intent of the website is eloquently put out by the two economists, Tyler Cowen and Alex Tabarrok in the intro video. What started as a blog focusing on economics and its various implications in understanding why things are the way they are around us, has now an interesting addition. A video portal titled MRUniversity or Marginal Revolution University that focuses on online education with subjects pertaining to economics. It brought back to my mind,…