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Auteur(s) M.K. Sharma, G.A.N. Wright
Jaar 2010
Tijdschrift Spanda Journal : quarterly of the Spanda Foundation
Deel I
Pagina's 38 - 40
Serienummer 2
ISSN [2210-2175]
Organisatie Spanda Foundation
Onderwerp Economic Development and Trade
Trefwoord credit, ethics, finance, poverty
Gebied South Asia
Land India
Samenvatting The nature of MFIs has changed over the years, evolving from an NGO towards a business-centred approach. It has now reached the status of an ’industry’ and it has become part of the financial service system. This is mainly due to the participation of for-profit trusts in the contribution of the MFIs. For-profit trusts disappeared or reduced in size over the years, leaving their members in the position of sharing the growth and returns amongst themselves, and thus introducing a business-oriented approach. This way of dealing with the issue worsens an already unclear situation, leading towards a lack of transparency and ethical concerns. With the emergence of a for-profit orientation, the MFIs were able to lower costs and increase the margins. In India, this brought private equity (PE) actors into play. Then, the consequent growth and gain within the institutions thanks to PE made clear that profit became the goal in itself, and the clients’ needs were put aside. Moreover, MFIs, hoping to make the most of the profit, have being widely spread across specific areas of the country, even in very small geographical zones. Overall, there is a high need for MFIs in India, especially because its government programmes will never be able to address the population as a whole. However, those institutions need to bring the role and needs of the client to the forefront otherwise they will not face a bright future. By adopting a more client-centred approach, both the poor and the overall sector of microfinance institutions could benefit from greater results.
Taal English
Categorie General
Type document Article
Rechten © 2010 Spanda Foundation
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