Microfinance

Sa-Dhan hosts National Microfinance Conference 2009

THE Association of Community Development Finance Institutions, Sa-Dhan hosted National Microfinance Conference 2009, at New Delhi under the theme
‘Microfinance Ecosystem- Equilibrium between Growth and Effectiveness’.


SA-DHAN, THE Association of Community Development Finance Institutions, (the national association of 220 community development finance institutions and other sector stakeholders), hosted National Microfinance Conference 2009, at New Delhi under the theme “Microfinance Ecosystem- Equilibrium between Growth and Effectiveness”.

Nobel laureate and founder of Grameen Bank, Prof Muhammad Yunus delivered the inaugural address at Sa-Dhan National Microfinance Conference 2009, here in New Delhi. Prof Yunus called upon Indian MFIs to keep up the national and international lead in social business. At the conference Prof Yunus said, “The bottom is to operate without incurring losses while saving the people and the planet – and in particular those among us who are most disadvantaged – in the best possible manner.”

Prof Yunus appreciated the example Indian Microfinance gives to the world, with some of the most innovative MFIs and the National Bank for Agriculture and Rural Development (NABARD) led SHG-bank-linkage programme, which is world’s largest microfinance programme with over four crore households reached since its inception.

The conference, through its technical sessions, deliberated upon various aspects of microfinance and economic growth at the base of pyramid, growth in microfinance and gaps in practice, structural challenges of scale and the balancing act and unveiling the new microfinance ecosystem.

Magsaysay laureate and chair emeritus, Sa-Dhan, Padma Bhusan Ela R Bhatt in her Key note address reminded to the august gathering of financial experts that “Effective microfinance is not to be measured in terms of the speed of growth, but in the creation of long term relationship between the MFI and the client and the community,” she added “Basically, banking is relationship, not finance. Relationship, continued relationship, relationship of trust. It is through this relationship that the poor woman – like any other client, by the way – gains a sense of security and confidence to plan to take risk in her life and livelihood. And eventually develops a stable livelihood.”

Bhatt is also the founder of Gujarat-based SEWA bank and chair emeritus of Sa-Dhan. Bhatt, awardee of Ramon Magsaysay for public service, appreciated the “Raghuram-Rajan-Commission’s” recommendations for broadening financial access, namely to create small regional banks and to expand scope of banking correspondents.

Microfinance Institutions (MFIs) are playing a crucial role in the mission of financial inclusion in India. They provide small loans to over 141 lakh clients (2007-08), 80 per cent of them poor women and around 30 per cent from SC/ST background, to take up small enterprises that would get them a fair income and provide employment in both rural and urban areas. Moreover, MFIs also cover the risk of poor by providing financial services like life insurance, remittances and within the careful scope permissible by RBI micro-savings.

As per the Bharat Microfinance Report 2008, published by Sa-Dhan, the MFI channel served about 141lakh clients with a portfolio outstanding of about Rs 5954 crores by 2007-08. The growth over the preceding financial year has been 53 per cent and 72 per cent for client outreach and loan portfolio respectively. The microfinance sector in India is growing despite a legal vacuum. The conference advocated for the implementation of the recommendations of high level commission on financial sector reform and a microfinance act that would integrate into an ecosystem to sustain effective growth for financial inclusion of India’s poor.

Mathew Titus, executive director Sa-Dhan during his address at the conference said “Sa-Dhan continues to build a culture of transparency and fairness among various MFIs and their different models. Sa-dhan voluntary code of conduct and Bharat Microfinance reports contribute continuously to a steady development of the microfinance sector and ultimately of the well-being of the microfinance clients.

H Bedi, chairperson Sa-Dhan delivered the welcome speech RM Malla, chairman-cum-managing director, SIDBI delivered a special address and the keynote address was delivered by Ela R Bhatt, founder SEWA bank.

Further eminent panelist includes Mahajan, group chairman BASIX, A Fernandez, chairperson, Saghamitra Rural Financial Services, B P Vijayendra, CGM, RPCD, RBI, U C Sarangi, chairman, NABARD and Prof Subhasis Gangopadhaya, managing trustee, IDF.

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