Microfinance Interviews

Interview with Y H Malegam on his report on Indian Microfinance Institutions

By suggesting a cap on interest rates on microloans and annual income of poor borrowers, a Reserve Bank of India (RBI) panel on microfinance led by noted chartered accountant Y.H. Malegam has ruffled many feathers. In an interview, Malegam defended the recommendations, saying the panel’s mandate was to protect poor borrowers and not microfinance institutions (MFIs). Look at the philosophy behind it and not the numbers, and the annual income limit can be different in rural and urban India, he said.

Describing MFIs as “greedy”, he said they book enough profits and could use part of it to reduce rates, which he strongly emphasized should not exceed 24%. If RBI accepts the recommendations, there will be no need for the recent Andhra Pradesh law for regulating MFIs, he said.

Read the complete interview on Livemint at the link below.

Interview with Y. H Malegam – Livemint

Interview conducted by Tamal Bandyopadhyay & Dinesh Unnikrishnan.

Watch Extracts in the Video Interview below. –

Note – Audio quality is low

Link to Video

Man of the Moment – Y H Malegam

malegam committee india

Y H Malegam . Img-credit:livemint.com

Abhay N

Author : 

Abhay is the founder and managing editor of India Microfinance. He is passionate about microfinance, financial inclusion and social entrepreneurship in India.

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1 Comment

1 Comment

  1. L.Veeraraghavan

    January 30, 2011 at 2:04 pm

    The Malegam report looks more like the Base Rate recommendation of RBI. All aspects of microfinance have been parametrized leaving only the risk aspects to the MFIs. This is echoed in the interview. In terms of portfolio the top NBFCs could be covering 92%. But the SBLP with NABARD’s pioneering role and SGSY programmes have reached more people and addressed more aspects of poverty and livelihood. Probably government could consider setting up a corporation to roll out a credit product on the lines of the recommendations of the Malegam Committee which may still have a share of the credit gap in meeting the needs of better of poor and the informal sector. Then the risk aspect is also addressed.

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