State review exposes MFIs in Andhra Pradesh
The State government’s decision to review the operations of micro finance institutions has opened quite a can of worms. Contrary to what MFIs say, they are in fact charging very high interest. Most companies impose an interest rate of 30 per cent on a population that is largely poor.
L&T has given loans to 5,903 people in Adilabad district to the tune of Rs 185.10 crore, at an interest rate of 59.53 per cent. Spandana lent Rs 50.30 crore in Anantapur district with an interest rate of 31 to 34.42 per cent and Fullertron charged 36 per cent interest. Read more on Deccan Chronicle
A man with a mission to manage microfinance
Of all the all voices raised against the high interest rates charged by microfinance institutions (MFIs), one person’s voice proved most important.It was that of R Subrahmanyam, principal secretary, rural development department, Andhra Pradesh.
He is also the one behind the drafting of the Andhra Pradesh Micro Finance Institutions (Regulation of Money Lending) Ordinance, 2010, which has now become a thorn in the flesh for many MFIs, particularly for its clauses on loan recovery. Read more on Business Standard
PNB, SEED join hands to bank villages in North India
Punjab National Bank (PNB) has inked a deal worth Rs 25 crore with the Society for Educational Welfare and Economic Development (SEED) to make banking facilities accessible in remote villages in northern India. PNB earlier appointed SEED as its business correspondent to make its services available in remote rural areas that do not have access to its banking facilities. Read more on Tehelka