CMF Study on Access to Finance in Andhra Pradesh: Some Observations for The RBI and Other Stakeholders…
By Ramesh S Arunachalam, Rural Finance Practitioner
The CMF study on access to finance is a very interesting one and I would like to congratulate the CMF team for its hard work. That said, there appear to be some interesting findings from the study and I discuss these with other relevant issues about the study, its context, methodology etc – especially because the study is being increasingly relied on by policy makers and other stakeholders and therefore, it becomes very important to provide a fair and objective assessment of the study and its methodology and findings…that is the sole objective here and again, I would like to state that the work of CMF and IFMR require full appreciation because there is hardly any serious research of the kind they do, at least in Indian micro-finance…
Having set the context, here are some observations…
Mr. Justin Oliver writes in his post blog…on the CGAP blog…on November 11th 2010
“More than six months before these problems came up, the Centre for Micro Finance at IFMR Research, with funding from the Banker’s Institute for Rural Development at NABARD, conducted a household survey of 1,920 households in rural Andhra Pradesh to understand their access to and use of financial services. Led by Doug Johnson and Sushmita Meka, this was a representative survey of the state’s entire rural population, rich and poor, and collected detailed information on household savings and borrowing from SHGs, MFIs, banks, moneylenders, friends and family, and other sources. What we found is startling, and challenges many of the assumptions people have about microfinance in Andhra Pradesh.”
Two aspects in the above statement require clarification:
a) The timing of the study, its posting on the CGAP blog and its overall positioning; and
b) Its claim on being a “representative survey of the state’s entire population, rich and poor and borrowing from SHGs, MFIs, banks, moneylenders, friends and family, and other sources.”
First let us look at timing and related aspects. The study was conducted in June – Oct 2009 according to one the authors, who has said this in response to my query on the CGAP blog post. Read more on Microfinance in India
Response to Criticism of “Access to Finance in Andhra Pradesh”
Thanks to the blog “Candid Unheard Voice of Microfinance” for devoting a post to the CMF study “Access to Finance in Rural Andhra Pradesh,” which appears, rather unexpectedly, to have become a hot topic given the issues in Andhra over the past several months. Little did we know when we first proposed the study to NABARD’s Bankers’ Institute for Rural Development that it might one day get such attention! But it has, and with that has come some misunderstandings which are worth clearing up.
1. The author is concerned that the study does not include urban areas. This is in fact the case. I wish we could have covered urban areas too — and in fact we included urban areas in our initial proposal to NABARD, but, understandably, given NABARD’s mandate, they requested us to focus on rural areas only. The study states this very clearly of course, and nowhere has anyone from CMF attempted to say that it includes information on urban areas too.
Read the rest on India Development Blog