Report Summary. Malegam Committee on Microfinance. (January ). Background. The Board of Directors of the Reserve Bank of India. (RBI) constituted a. PDF | On Nov 7, , Saswat Barpanda and others published The Malegam Committee Microfinance Report: Will the MFIs Accept It?. Malegam Committee Report on MFI – Download as PDF File .pdf), Text File .txt) or read online.
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As it is proven that MFIs, are efficient and effective in reaching out the last mile, it would be interesting if the Govt and the MFis can explore and looking at ways of channelising the benefits available from the Govt. Dear Ramesh, This is a wonderful blog. Read a lot of your work and enjoy it For example, there are sometimes 6 MFIs sharing a JLG and its clients and this has been the REAL secret of the micro-finance growth story so far…Add to this the huge levels of indebtedness on the ground and I am not sure that the report provides any way out for these aspects…I hope that the committee and RBI look into and address these issues as otherwise, there would be no REAL way forward….
Malegam Committee Report – Summary of Key Recommendations
Posted by Ramesh S Arunachalam at 9: But I guess it was left amlegam no other option. This ensures that micro-finance will come under the purview of the RBI and no longer can microfinance be treated as a fringe activity or as an orphaned child in the larger Indian financial sector. Nalegam, the Malegam Committee has done a highly commendable job with a very complex problem and that needs to fully recognized and well appreciated.
The Malegam committee report must be strongly appreciated because it seeks to legitimize microfinance as an integral part of the Indian financial sector. Last but not the least, the report pf the committee, while providing a good framework for the future, perhaps does not adequately address the existing crisis situation in AP and slowly beginning to unfold in Tamil Nadu and issues around these — there are a large number of clients and JLG who have been shared at the field level, with each MFI reaching out to them, on a specific day of the week.
By recommending creation of a new category – called NBFC MFIs with associated conditions which are perhaps open for discussion – the report has clearly positioned and mainstreamed micro-finance within the framework of the larger financial sector in India.
Honestly, I am evolving as a writer and I appreciate your feedback – both postive and negative Thanks once again Look forward to meeting you some day I doubt if this changes just by adding a suffix without suggesting necessary amends in state moneylending laws. Commitree, the strong emphasis on corporate governance is note worthy and specifically, the committee has suggested that corporate governance rules will have to be specified encompassing several issues for NBFC Micrfinance by the regulator.
Malegam Committee Report on Microfinance: What’s On The Platter?
By recommending creation of a new category — called NBFC MFIs with associated conditions which are perhaps open for discussion — the report has clearly positioned and mainstreamed micro-finance within the framework of the larger financial sector in India.
But the immediate concern for the regulator is to address the customer protection and other issues raised by the Govt. A very critical aspect indeed….
Enable public-private partnerships by linking MFIs with state-run microcredit programs. Sasi January 26, at Anonymous January 24, at Kaizad January 28, at 5: But what I fail to understand is how is this going to help in cases like AP. I am sure you would recall my posts on that Consider expanding the definition of microfinance to include not just micro credit for all purposes but a full suite of financial services.
More importantly, the resultant search for greater efficiencies will surely result in more short cuts being taken with regard to client acquisition, client engagement and the like – we all know what problems that all of this caused in AP in the recent past.
Malegam Committee Report on Microfinance: What’s On The Platter?
Replrt for sharing this. A second aspect is the use of caps for annual family incomerestricting it to Rs. Ramesh S Arunachalam January 26, at The much-awaited Malegam committee report is laudable because it is the 1st committee report of some significance to attempt the creation on of a national regulatory framework for Microfinance in India.
Many of these issues can easily be addressed by dialogue and discussion and do not take away the excellent work done by Malegam committee — that commitree a point that I would like to make clear upfront…Read on….
The Malegam committee report must be strongly appreciated because it seeks to legitimize microfinance as an integral part of the Indian financial sector. This has not offered any sort of immunity to MFIs from state control, then what is it that the committee recommends that changes this? It has shown the right strategic intent and direction for establishing a uniform national regulatory framework for micro-finance in India that attempts to put clients first… Ladies and Gentlemen, let us give the committee a Big Warm Hand …rather than JUST nitpicking on specific issues that can perhaps be sorted out through discussion and dialogue… Clearly, it is about time that we – stop being Penny Wise and Pound Foolish and – recognize the huge and legitimate platform for action that the Malegam committee has provided all of us….
This is admittedly a suggestion that perhaps cannot be implemented on the ground. Dear Ramesh garu, As always I enjoyed reading this thoughtful analysis.
Sasi Thanks for your mail and the suggestions. Eighth, it would also be useful if the committee looks at the aspect of equity investment in MFIs and build necessary safeguards to ensure that what happened in AP does committef recur again.
Hence, the committee may want to go with the existing RBI ceiling of Rs 50, for loan size as well as total loan outstanding and back it up by ensuring that MFIs have good loan origination and appraisal systems especially, for large non-consumption loans to individuals, which must also be permitted and appropriate ceilings for consumption loans as already proposed by the committee. Everyone was aware of the problem but seemed helpless, all the attempts by Industry association were invain as none had the time or interest to work for a sustainable solution the debate on this continued endlessly micrpfinance the Govt came down heavily and forced the MFIs to submit the data Then what use is the statement made by the committee after all?