Friday, October 27, 2006

NABARD to oversee micro lenders

New bill to be introduced in winter session.
NABARD may regulate the over Rs. 35,000 cr microfinance sector. This would mean a regulator for over 400 mln beneficiaries who are served through MFIs. The cost of serving the banking needs of 75 mln households amounts to about Rs. 80,000 cr according to industry figures. At present only 5% of the annual credit demand is met for the population living below poverty line. Nearly 80% of the demand is met by informal sector.

NABARD first launched the SHG Bank Linkage Programme in 1992. As on March 2006, nearly Rs. 5000 cr was mobilized for 32.98 mln households. There are more than 22 lk SHGs today and an additional 3.85 lk will be added this fiscal. The MFIs want the government to allow them to mobilize savings also.