RBI asks MFIs to stay focused on lending to SHGs & Micro enterprises New Delhi, 28 Oct (KNN) The Deputy Governor of Reserve Bank of I...
RBI asks MFIs to stay focused on lending to SHGs & Micro enterprises
New Delhi, 28 Oct (KNN) The Deputy Governor of Reserve Bank of India, M. Rajeshwar Rao instructed the microfinance (MFI) sector to not divert from their main objective by following the functioning of mainstream commercial banks.
The Central Bank has said that, it will look after the growth of MFIs, hence they “should not throw caution to the wind to achieve higher assets growth and returns”.
While speaking at a conference, organized by Sa-Dhan, a self-regulatory organization for the MFI sector, Rao said, “MFIs should focus on the understanding the needs of customers first and offer them the needed support through financial products”.
MFI lend to micro-enterprises in underserved parts of India. It provides small loans and other financial services to poor and low-income households.
It is an economic tool designed to promote financial inclusion which enables the poor and low-income households to come out of poverty, increase their income levels and improve overall living standards.
It can facilitate achievement of national policies that target poverty reduction, women empowerment, assistance to vulnerable groups, and improvement in the standards of living. Indian microfinance sector has witnessed phenomenal growth over past two decades in terms of increase in both the number of institutions providing microfinance as also the quantum of credit made available to the microfinance customers, as per RBI guidelines.
