The Microfinance Review

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Model Transition from Microfinance to Financial Inclusion - Current Scene and the Path Ahead


Affiliations
1 ITS, Ghaziabad, India
     

   Subscribe/Renew Journal


This paper attempts to present a comprehensive review of the current scenario of microfinance in India. The paper analyses the challenges encountered by Indian banks and non-formal financial institutions in making available f­inancial services and products. The performance of microfinance institutions (MFIs), with their innovation and smoother distribution channel, has outperformed banking institutions in financial inclusion. Both skill and credit enhancement of the economically disadvantaged is of significance where again, MFIs offer immense scope. There is a growing recognition that the poor need and use financial services beyond credit to expand their choices and manage their financial lives and that financial inclusion ventures ought to incorporate job generation aspect as well. The paper suggests that tapping the potential available with technology can go a long way in sustaining the tempo of our financial inclusion agenda. Finally it is reiterated that only when financial inclusion is treated as a sustainable and profitable business activity, our goal of universal financial inclusion can be accomplished.

Keywords

Financial Inclusion, Microfinance Institutions.
User
Subscription Login to verify subscription
Notifications
Font Size

  • Alliance for Financial Inclusion (2013): “Putting Financial Inclusion on the Global Map”, The 2013 Maya Declaration Progress Report, AFI, Bangkok.

  • Allan A, Massu M and Svarer C (2013): “Banking on Change: Breaking the Barriers to Financial Inclusion”, Plan, Barclays and CARE, New York.

  • Cull, R, Ehrbeck T and Holle N (2014): “Financial Inclusion and Development: Recent Impact Evidence”, Focus Note DCGAP.

  • Federation of Indian Chambers of Commerce and Industry (2011): Document, Promoting Financial Inclusion, FICCI, New Delhi.

  • G20 Toronto Summit (2010): Report on Innovative Financial Inclusion from the Access through Innovation, Principles and Report, May 25, 2010, retrieved from http://www.microfinancegateway.org/gm/document/Innovative_ Financial_ Inclusion last accessed 25 February, 2017.

  • International Monetary Fund (2016): “Financial Access Survey”, Statistics Department, IMF, Washington.

  • Johari, R (2016): “Livelihood to Micro Enterprises - Raising the Sustainability and Employability Quotient”, paper presented at the International Conference on Decentralisation and Development Organised by KILA Thrissur, Kerala, January.

  • Ministry of Finance (2016): Annual Report 2015-16, Ministry of Finance, Government of India.

  • Mundra, S S (2017): Inaugural address by Deputy Governor, Reserve Bank of India at the NAMCABS Seminar organised by College of Agricultural Banking in Mumbai on February 20. Available: http://www.rbi.org.in accessed 2 April, 2017.

  • Mundra, S S (2016): Address by Deputy Governor, Reserve Bank of India at the BRICS Workshop on Financial Inclusion in Mumbai, September 19. Available: http://www.rbi.org.in accessed 5 April, 2017.

  • National Bank for Agriculture and Rural Development (2016): Report Status of Microfinance in India 2015-16, NABARD, Mumbai.

  • National Bank for Agriculture and Rural Development (1999): Task Force on Supportive Policy and Regulatory Framework for Microfinance, NABARD, Mumbai.

  • Rajan, R (2016): Speech by Governor, RBI, July 18, 2016, at National Seminar on Equity, Access, and Inclusion - Transforming Rural India through Financial Inclusion organised by National Institute of Rural Development and Panchayat Raj, Hyderabad. Available: http://www.rbi.org.in accessed 22 March 2017.

  • Rhayne E (2014): “The Economist Intelligence Unit’s Global Microscope: A Tool for Assessing Financial Inclusion Policy”, Center for Financial Inclusion at Accion, CFA, USA.

  • Robinson, M (1998): “Microfinance: The Paradigm Shift from Credit Delivery to Sustainable Financial Intermediation”, In Strategic Issues in Microfinance, eds.

  • Kimenyi, M.S, Wieland, R C & Von Pischke, J. D. Aldershot England: Ashgate.

  • Reserve Bank of India (2015): Report of the Committee on Medium Term Path on Financial Inclusion, December, 2015, RBI, New Delhi.

  • Reserve Bank of India (2012): “Directions cum Modifications to Non Banking Financial Company-Micro Finance Institutions (NBFC-MFIs)”, August 03, retrieved from http://www.rbi.org.in/scripts/ accessed 2 March 2017.

  • Reserve Bank of India (2008): “Financial Literacy and Credit Counselling Centres”, available http://www.rbi.org.in accessed 1 March 2017.

  • SaDhan (2015): Bharat Microfinance Report-2016, The Association of Community Development Finance Institutions, SaDhan, New Delhi.

  • SaDhan (2016): Microfinance Directory, 2nd Edition, The Association of Community Development Finance Institutions, SaDhan, New Delhi.

  • Shankar S (2013): “Financial Inclusion in India: Do Microfinance Institutions Address Access Barriers?”, ACRN Journal of Entrepreneurship Perspectives, Vol. 2, No. 1, pp. 60-74.

  • Singh, T (2010): “Does Domestic Saving Cause Economic Growth? - A Time-Series Evidence from India”, Journal of Policy Modeling, Vol 1, No. 1.

  • United Nations Development Programme (2006): “Building Inclusive Financial Sectors for Development”, UNDP, United Nations, New York.

  • World Bank (2014): Global Financial Development Report 2014: Financial Inclusion, World Bank, Washington, DC.

  • World Bank (2013): Universal Financial Access Is Vital to Reducing Poverty, Innovation Key to Overcoming the Enormous Challenge, Press Release, World Bank, Washington.

  • http://www.centerforfinancialinclusion.org/

  • http://www.imf.org/pressrelease

  • http://www.worldbank.org/en/programs/globalfindex

  • http://datatopics.worldbank.org/financialinclusion/home


Abstract Views: 282

PDF Views: 2




  • Model Transition from Microfinance to Financial Inclusion - Current Scene and the Path Ahead

Abstract Views: 282  |  PDF Views: 2

Authors

Rajeev Johari
ITS, Ghaziabad, India

Abstract


This paper attempts to present a comprehensive review of the current scenario of microfinance in India. The paper analyses the challenges encountered by Indian banks and non-formal financial institutions in making available f­inancial services and products. The performance of microfinance institutions (MFIs), with their innovation and smoother distribution channel, has outperformed banking institutions in financial inclusion. Both skill and credit enhancement of the economically disadvantaged is of significance where again, MFIs offer immense scope. There is a growing recognition that the poor need and use financial services beyond credit to expand their choices and manage their financial lives and that financial inclusion ventures ought to incorporate job generation aspect as well. The paper suggests that tapping the potential available with technology can go a long way in sustaining the tempo of our financial inclusion agenda. Finally it is reiterated that only when financial inclusion is treated as a sustainable and profitable business activity, our goal of universal financial inclusion can be accomplished.

Keywords


Financial Inclusion, Microfinance Institutions.

References