tag:blogger.com,1999:blog-918123006998403597.post789996995598249342..comments2024-02-14T00:23:56.260-08:00Comments on Shiv's Third Eye: MicrofinanceSivakumar Surampudihttp://www.blogger.com/profile/17137443084012733786noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-918123006998403597.post-31699837764905228052015-03-05T22:59:02.305-08:002015-03-05T22:59:02.305-08:00Very nice summary of the key issues and very objec...Very nice summary of the key issues and very objective. Thanks for this<br />Ramesh S Arunachalamnoreply@blogger.comtag:blogger.com,1999:blog-918123006998403597.post-89181716305810838782010-12-07T08:45:42.251-08:002010-12-07T08:45:42.251-08:00Excellent piece of write up on current state of th...Excellent piece of write up on current state of the sector. True to Karna's story. The Mahabharat of Microfinance will continue till a strong regulation is placed. We are all used to policing! A mf policeman can bring that discipline. But this is not the end. The sector needs a social-policing mechanism (through self-regulation and social performance ranking).Niranjan Sheelavantnoreply@blogger.comtag:blogger.com,1999:blog-918123006998403597.post-22919707745838270602010-12-07T08:28:26.087-08:002010-12-07T08:28:26.087-08:00Dear Shiv,
Interesting perspective and thanks for...Dear Shiv,<br /><br />Interesting perspective and thanks for highlighting issues beyond the obvious. I guess the 'debacle' would have happened sooner or later... it just got precipitated by our 'fair-weather' friends - the banks (and govt). However, I wish we would have let market forces take their toll, rather than the knee jerk reaction of the government. There is no better regulator than a scenario of intense competition. <br />Now there is still a nagging doubt that if the flow of funds had not been suddenly turned off, the picture would have been different. (One cannot deny the importance of free flow of funds in such a business) A possibility we will never be able to find out!<br />Naimish DaveNaimish Davehttps://www.blogger.com/profile/14533693424112522240noreply@blogger.comtag:blogger.com,1999:blog-918123006998403597.post-290475038887194922010-12-06T05:36:27.305-08:002010-12-06T05:36:27.305-08:00Dear Shiv
The complexity of the business is eviden...Dear Shiv<br />The complexity of the business is evident from the number of stakeholders with whom capital has to be built, especially when motives are at times devious.<br />It is true as you have said when referring to the pillars that the key to growth is enhancing the repaying capacity of the poor borrower. This will reduce risk and enable them to enjoy ultimately the normal rates enjoyed by the well off. Else how will the process be viable?<br />Having heard some of the eminenet MFI chiefs making no bones about their money lending focus, this is a good time to realise that there is no free lunch<br />S NandakumarS Nandakumarhttp://www.vnvision.comnoreply@blogger.comtag:blogger.com,1999:blog-918123006998403597.post-83377529054949161982010-12-06T03:18:20.753-08:002010-12-06T03:18:20.753-08:00Sir,
Excellent analysis.. cannot agree with you m...Sir,<br /><br />Excellent analysis.. cannot agree with you more on each of the point highlighted.<br /><br />I remember reading your views few weeks ago on the absence of Social Pillar in the MFI's approach. Probably they became another piece in the value chain..without value addition barring charging few percentage points less.<br /><br />Taking a leaf out of Mahabharata, the system has to cleanse itself from the wrong doings that has accumulated over the years... so it would be good to see if Darwin's theory can be applied to the situation on hand.. any kind of support or intervention without a direction and a strong regulation (with biting ability) would result in a similar situation few years down.<br /><br />My views.<br /><br />Thanks for sharing.<br /><br />VijayVijay Anandhttp://www.linkedin.com/profile/edit?id=10129655&trk=tab_pronoreply@blogger.comtag:blogger.com,1999:blog-918123006998403597.post-21373110831416598612010-12-06T02:44:40.921-08:002010-12-06T02:44:40.921-08:00The problem with the larger MFIs is that they have...The problem with the larger MFIs is that they have ultimately only been able to replace the money lender... they have not been able to replace or pose a threat to the formal financial institutions. They have also fallen for the profit... whereas they should have gradually reduced the rates of interest, they have not done that , instead the pay packets of the CEO)s has got fatter... and that has made the eyebrows been raised... And this will cause death to the new institutions coming up in the underserved areas, because the new institution is forced to charge higher rate, because of intial higher costs.Unknownhttps://www.blogger.com/profile/15399753745621933524noreply@blogger.comtag:blogger.com,1999:blog-918123006998403597.post-20892453513856109012010-12-05T22:30:37.070-08:002010-12-05T22:30:37.070-08:00Very well said, sir.
Especially what next section...Very well said, sir.<br /><br />Especially what next section.<br />There is an immediate need to revive the sector now.<br />Otherwise it would be impossible to put life into a dead thing.Mandeep Ahujahttps://www.blogger.com/profile/17950103847078730880noreply@blogger.comtag:blogger.com,1999:blog-918123006998403597.post-57928628782516907942010-12-05T20:57:19.027-08:002010-12-05T20:57:19.027-08:00Excellent in-depth analysis. Karna's example b...Excellent in-depth analysis. Karna's example beautifully exemplifies. Abhi Kya Karna?!<br /><br />May be the MFIs should have taken on board (or as advisors) persons like you i.e., Experts in rural domain. Seriously.<br /><br />May be that would have given them a road map which would have shown them the pitfalls to be avoided as well as the "right" route to be taken.ABhttps://www.blogger.com/profile/14049066475706412217noreply@blogger.comtag:blogger.com,1999:blog-918123006998403597.post-75132118688123040912010-12-05T20:56:40.876-08:002010-12-05T20:56:40.876-08:00Shiv, that was a very good post.
An IE article l...Shiv, that was a very good post. <br /><br />An IE article last week had this interesting piece of statistics:<br /><br />"A recent survey by the Centre for Microfinance has revealed that a staggering 93 per cent of the households in AP have a loan outstanding. Of these the vast majority, 82 per cent, were from informal sources (57 per cent borrowed from friends with interest, 17 per cent from a moneylender), and only 11 per cent had a loan from an MFI. Moreover, multiple borrowing from the same source is most prominent among those who borrowed from informal sources: only 30 per cent of active MFI borrowers had more than one loan outstanding, compared to 85 per cent of rural households who were active borrowers from informal sources".<br /><br />With formal banking beyond their reach, MFI offers the only hope for people to move away from informal sources/moneylenders. Is there some way,nationalised banks can be roped into the MFI framework?Rajhttps://www.blogger.com/profile/09367344161081393779noreply@blogger.com