Mar 31 2020

Report Summary. Malegam Committee on Microfinance. (January ). Background. The Board of Directors of the Reserve Bank of India. (RBI) constituted a. PDF | On Nov 7, , Saswat Barpanda and others published The Malegam Committee Microfinance Report: Will the MFIs Accept It?. Malegam Committee Report on MFI – Download as PDF File .pdf), Text File .txt) or read online.

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If this recognition was to come with tighter regulations – much higher minimum capital requirements, limited choice for borrowers, infringement on the fundamental right of citizens to join any number of groups they wish, price controls and killing competition – I am not sure if there anything to celebrate here. Dear Ramesh garu, Repogt always I enjoyed reading this thoughtful analysis.

While each recommendation by itself is well-intentioned, the net effect may be disastrous. Unfortunately both the Banks and MFis have let it down, this si despite repeated warnings by RBI on various occassions, however, the going was so good that the MFIs felt that they have become super powers and none can dictate terms to them.

Malegam Committee Report on Microfinance: What’s On The Platter?

But what I fail to understand is how is this going to help microofinance cases like AP. What authority does RBI has in controlling state’s populist actions. Everyone was aware micrfoinance the problem but seemed helpless, all the attempts by Industry association were invain as none had the time or interest to work for a sustainable makegam the debate on this continued endlessly till the Govt came down heavily and forced the MFIs to submit the data Dear Sasi Garu Many thanks and I have enjoyed your analysis and responses as welll and I did with the one above We have reproduced the same on the India Microfinance website.

More importantly, the resultant search for greater efficiencies will surely result in more short cuts being taken with regard to client acquisition, client engagement and the like – we all know what problems that all of this caused in AP in the recent past. Instant Payday Loans Within 24 Hours.


Work From Home Further, the capping of loan amounts and loan outstanding would severely hurt the clients in the medium and long term in their efforts to climb out of poverty. Knowing your writing style, I think you have been too kind to the committee, perhaps because it may not sound like a good idea to take on a regulator. But I guess it was left with no other option.

Bring all private microfinance players under one ambit, not just NBFCs. Offer special incentives and tax breaks to MFIs seeking to reach underserved areas. Work From Home 3 Online Jobs that pay you Rs per hour Since time immemorial people have tried to maximize the returns that they get from Fifth, the strong emphasis on corporate governance is note worthy and specifically, the committee has suggested that corporate governance rules will have to be specified encompassing several issues for NBFC MFIs by the regulator.

Read on at Microfinance in India Blog. I think it would be unfair to criticize the Malegam committee report on the lack of implementation detail – after all, much of this can be detailed out only after the RBI accepts the various recommendations and I am sure that necessary precautions by the RBI will be taken with regard to codes of conduct, client protection measures, corporate governance etc.

Read a lot of your work and enjoy it On the other hand, the income caps will mean those loans are made to borrowers whose incomes less afford the higher debt.

I don’t understand though what is in the report that would stop state governments from doing what it did in AP again and again. Consider extending banking correspondent model to MFIs – for and non-profits.


That said, I am therefore a bit perplexed by the strong initial criticisms of the Malegam report…While stakeholders appear to have perceived several weaknesses in the report, I try to list some of these below and provide some explanations with regard to these issues, apart from suggesting ways forward.

Malegam Committee Report on Microfinance: What’s On The Platter?

Finally, regulate not micro-manage. This ensures that micro-finance will come under the purview of the RBI and no longer mwlegam microfinance be comnittee as a fringe activity or as an orphaned child in the larger Indian financial sector. Sasi Thanks for your mail and the suggestions.

The Malegam committee report must be strongly appreciated because it seeks to legitimize microfinance as an integral part of the Indian financial sector.

By recommending creation of a new category – called NBFC MFIs with associated conditions which are perhaps open for discussion – the report has clearly positioned and mainstreamed micro-finance within the framework of the larger financial sector in India.

Sixth, there are several other aspects in the report that require commendation: This seems fair from an equity pun intended perspective…. As many have argued, the proposed margin caps would force MFIs to make larger loans.

You may be aware that within 2 weeks all the MFIs have submitted the data perhaps this is the only way things would work as we are used to learn the hard way. Kaizad January 28, at 5: Excellent blog by Ramesh.

A third issue that merits appreciation is the fact that the report has sought to promote greater transparency with regard mlcrofinance interest rates…through various measures. Dear Ramesh Thank you for summing up the salient points and your to the point recommendations.