Microfinance in North Eastern Region of India:Status and Issues

North Eastern (NE) Region of the country is not only underserved as far availability of formal banking outlets are concerned but is also not able to attract other micro-credit providers (MFIs, etc.) on account of the prevailing geo-political environment which have not been considered to be very conducive by the outsiders. Further, most of the people in the region are availing only 'Savings' and Credit products from the formal banking system, the concept of composite financial product in form of demand based 'Savings' and/ or 'Credit' as main product and 'micro-insurance, micro-pension, etc., as add-on products is yet to get any acceptance in the region both at the MFI/ NGO or even at bank level as well as at client level.

A large number of traditional informal micro-finance institutions in form of 'Rotating Savings and Credit Association' (ROSCAs) and 'Accumulating Savings and Credit Associations' (ASCAs) are existing in North East Region which have been formed to cope up with various risk arising on account of failure or disturbances in the social, economic and natural systems. It is felt that there is a need to institutionalized these informal institutions and an attempt should be made to facilitate the convergence of these traditional groups with various developmental programmes which are either in place or being initiated by the government and other stakeholders including banks, NGOs/ MFIs etc to provide livelihood and social security in the North Eastern Region.