Close on the heels of the recent controversy surrounding microfinance institutions, Karnataka government has decided to foray into the micro finance business with an initial corpus of Rs 500 crore.
With this, Karnataka will join the league of Andhra Pradesh to have its own state funded microfinance institution. The government plans to lend at the rate of 4 per cent interest per annum to unorganised sector workers. Read more on Economic Times
Microfinance interest rates need to be regulated: Finance Minister
The Finance Minister, Mr Pranab Mukherjee, on Friday made it clear that he does not favour any strangulation of the microfinance sector even as he called for regulation of the interest rates charged by the MFIs.
“My idea is not to strangulate them (MFIs), but to regulate them so that the interest they charge is not exorbitant and under no circumstances should they use coercive methods for loan recovery”. Read more on Hindu
Microfinance’s Fight on the Homefront
In his most recent New York Times column (“Here’s a Woman Fighting Terrorism. With Microloans”), Nicholas Kristof makes the provocative argument that successful microfinance efforts in the developing world help combat fundamental extremism.
Kristof profiles Roshaneh Zafar, a banker turned social entrepreneur now working in Pakistan, who says “Charity is limited, but capitalism isn’t. If you want to change the world, you need market-based solutions.” Read more on Huffington Post