Vijay Mahajan’s comments on what he believes to be the five myths about the Microfinance Sector in India has appeared in the latest issue of the Global South Development Magazine, as a part of a larger article focussed on the microfinance sector of the world.
Five Myths about Microfinance in India
By Vijay Mahajan, BASIX
1. First is the idea that poor should be self-employed rather than work for wages. That is contrary to the whole history of successful economic development.
2. Second is the idea that loans are the main financial services needed by the poor, whereas they really need savings and insurance.
3. Third is the idea that credit is what builds enterprise, whereas the truth is that entrepreneurship and management are more important.
4. Fourth is the idea that the non-poor don’t need credit, whereas the truth is revealed in market-based banking: higher incomes can handle higher debt.
5. Fifth is the idea that micro credit institutions can become self-sustaining, whereas all experience shows that new enterprises in poor areas that are built on credit alone rarely emerge from dependency.
To read the complete article about the Myths of Microfinance Sector please download the free Magazine at the link below.
About Global South Development Magazine
Global South Development Magazine is published by Silver Lining Creation Ry which is a not-for-profit social media organization based in Finland. Briefly named as Silcreation, the organization consists of independent documentary makers, script writers, development activists, freelance writers and students. Visit their website – silcreation.org