MALEGAM COMMITTEE REPORT ON MICROFINANCE PDF

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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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Similar to SHG-bank linkage program. Bonam Srinivas January 28, at Learn To Earn Online 5. Sixth, there are several other aspects in the report that require commendation: This seems fair from an equity pun intended perspective….

Many of these issues can mxlegam be addressed by dialogue and discussion and do not take away the excellent work done by Malegam committee — that is a point that I would like to make clear upfront…Read on…. Thanks for sharing this. To clarify, the issue is not one of not wanting to take on mwlegam regulator – I have been fairly critical of commigtee in Indian MF and also talked of regulatory failure here 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.

At any rate, not treating Sa-dhan as an MFI association will again be perceived as patently unfair and hence, this aspect also needs to be reconsidered…and perhaps changed accordingly I dont want to get into this as it would open up a number of questions is the suicides of the customer and the lack of customer protection measures under existing regulation. 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.

Work from home without Investment. This would be a pareto optimal solution indeed…. A very critical aspect indeed….

Unfortunately despite this attempt the State Govt still feels that the RBI report is more to protect MFIs interest than the customers interest, so they want more micro management from RBI than what is proposed in the Malegam committee report 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? Once the initial recommendations are refined and suitably accepted, I would additionally add that the Malegam committee should recommend the creation of an ongoing working sub-group or expert group that continues to be engaged with the sector for several years to come and that creates an ongoing implementable roadmap for delivery of other critical services that clients need.

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Malegam Committee Report on Microfinance: What’s On The Platter?

But I guess it was left with no other option. Finally, regulate not micro-manage. That said, I am therefore a bit perplexed by the strong initial criticisms of the Malegam report…While stakeholders appear to have perceived several weaknesses in the report, I try to list some of these below and provide some explanations with regard to these issues, apart from suggesting ways forward.

Newer Post Older Post Home. Dear Ramesh Thank you for summing up the salient points and your to the point recommendations. Ofcourse, the good thing is Malegam Committee has specifically suggested that RBI should come out with a detailed customer protection guidelines, which perhaps would give the state Govt some comfort to withdraw the monsterous act It has also been cheered that the committee asked the state governments to stay microfinanec of microfinance regulation.

With the capital requirements proposed in the report it would be more meaningful if MFIs are allowed to offer savings services. I don’t understand though what is in the report that would stop comjittee governments from doing what it did in AP again and again.

Fifth, 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 MFIs by the regulator. Seriously consider the proposal of small finance banks. Offer special incentives and tax breaks to MFIs seeking to reach underserved areas.

Malegam Committee Report – Summary of Key Recommendations

More importantly, the resultant search microfihance greater efficiencies will surely result in more short cuts being taken with regard to client acquisition, committer engagement and the like malegwm we all know what problems that all of this caused in AP in the recent past. A second aspect that deserves appreciation is the fact that while the report has recommended continuation of priority sector funds for MFIs, it was however made it conditional — especially after recognizing some midrofinance the key problems like ghost onn, multiple lending, over lending and attempting to outline some measure to tackle them as well.

Therefore, this aspect also needs to re-looked and adapted accordingly. Unfortunately both the Banks and MFis have let it down, this si despite repeated warnings by RBI on various occassions, however, the going was so good that the MFIs felt that they have become super powers and none can dictate terms to them.

Thanks Ramesh informative articles. Kaizad January 28, at 5: But my concern is not about that. 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 repkrt 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….

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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 not recur again. 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. Work From Home 3 Online Jobs that pay you Rs per hour Since time immemorial people have tried to maximize the returns that they get from Instead of criticizing further let me offer some suggestions the RBI could consider before releasing the regulatory framework: Please refer midrofinance www.

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 mlaegam larger financial sector in India.

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.

We have reproduced the same on the India Microfinance website.

Malegam Committee Report – Summary of Key Recommendations

While repoft recommendation by itself is well-intentioned, the net effect may be disastrous. On the other hand, the income caps will mean those loans are made to borrowers whose incomes less afford the higher debt. If this recognition was to come with tighter regulations malegzm much higher minimum capital requirements, limited choice for borrowers, infringement on the fundamental right of citizens to join any number of groups they wish, price controls and killing competition – I am not sure if there anything to celebrate here.

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 Not sure, how RBI would balance this