INDIA'S MICROFINANCE INDUSTRY: COMPELLING NECESSITY OF MFIs TO GO TO SCALE
- Credit Rating Agency in India
- Industry Report
- INDIA'S MICROFINANCE INDUSTRY: COMPELLING NECESSITY OF MFIs TO GO TO SCALE
The diversity of the microfinance sector in India is manifested in diverse firms providing low-income people with financial services like lending, insurance, and pensions. Five broad categories can be used to classify the various microfinance industry participants: Small Finance Banks, NBFC MFIs, Banks, and Non-profit MFIs. All these institutions, except non-profit MFIs, are under the regulation of the Reserve Bank of India (RBI). The majority of non-profit MFIs are registered as trusts or societies, and they are regulated by the corresponding acts. Most of the non-profit organizations (NGOs), which operate as financial intermediaries, are registered as trusts or societies.
Some of the distinguishing features of microfinance are low-income borrowers, small amount loans, short loan tenure, absence of any collateral requirements, usually repaid at higher frequencies, and most microfinance loans are aimed at generating income.