Centre advises self-help group model to counter MFIs

He said bank-linked SHG model can also offer a cafeteria of financial products similar to MFIs.Appreciating efforts of Andhra Pradesh government in regulating microfinance institutions (MFIs) and protecting interests of poor borrowers, union government has advised the state government to revamp its bank-linked self help groups (SHGs) model.

Jairam Ramesh, union minister of state for environment and forests, said the current bank-linked SHG model of AP does not offer a bouquet of financial products the way MFIs could offer. Also, while MFIs lending was more borrower driven meeting the needs, timing and quantum of loan of borrowers, the bank-linked SHG model was more bank driven.

“Both nature and timing of financial product is not borrower driven but bank driven in bank-SHG linkage program. This is the inherent limitation in bank-SHG linked model,” he said delivering keynote address at global summit on microfinance in Hyderabad on Tuesday.


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Intl summit on microfinance

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Hyderabad, Jun 20: The three-day international summit on the theme of 'Microfinance and Inclusive Development' begins here from tomorrow.

The Society for Elimination of Rural Poverty (SERP), Government of Andhra Pradesh, in association with Natinal Rural Livelihoods Mission (NRLM) of Government of India and International Network of Alternative Financial Institutions (INAFI) were organising the summit, Minister for IKP, Women and Children V Sunitha Laxma Reddy said at a press conference here today.

Ms Reddy said on the opening day of the Summit, Andhra Pradesh Chief Minister N Kiran Kumar Reddy would deliver the inaugural address while Union Minister of State (Independent Charge) for Forests and Environment Jairam Ramesh would deliver the keynote address.

She said there was a greater concern across the globe that micro-finance programmes had been drifting from the original purpose and moving away from the primary objective of addressing poverty rather than being more concerned with the sustainability, resulting in gross commercialization with its attendant impact or chasing profits at the expense of clients.

The Minister, however said, the alternative perspectives of community ownership, building social capital through microfinance and leveraging microfinance for larger development process and outcome had been expressed well in many microfinanceprogrammes across the globe, particularly in Asia. Microfinance practitioners from the countries such as Bangladesh, Philippines, Afghanistan, Nepal, Srilanka, Africa and USA were attending the summit.

Ms Reddy said on the second day of the summit, the delegates would visit the villages and interact with the communities, with whom the SERP was implementing poverty reduction programmes and announced that the credit flow to Self-Help Groups (SHGs) through Banks accounted to Rs 9,000 crore in 2011-12 as against Rs 7,800 crore in 2010-11.

Parallel sessions on various themes related to microfinance issues and challengs to evolve strategies and way forward for inclusive development would also be held where success of SHGs will be showcased.


- Agencies

Jun 20, 2011

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Three-day microfinance summit begins today

Irrespective of what the Reserve Bank of India (RBI) thinks about the role of microfinance institutions (MFIs), the recent actions of the Andhra Pradesh government against these organisations for their alleged excesses in lending to the rural poor, have now assumed a pan-India significance.


Government of India's National Rural Livelihoods Mission (NRLM) and the International Network of Alternative Financial Institutions (INAFI), India, have joined forces with AP to correct what is termed as the 'mission drift' caused by gross commercialisation of microcredit in the last 3-4 years.

The two organisations, along with AP's Society for Elimination of Rural Poverty (SERP), are organising the fourth Alternative Summit, an international event, here from June 21 to 23. The theme is ‘Microfinance and Inclusive Development'. SERP spearheads the self-help group movement under the state rural development department initiative.

"There is a greater concern across the globe that microfinance programmes have been drifting from the original purpose and moving away from the primary objective of addressing poverty. They are more concerned with sustainability resulting in gross commercialisation...&" the state government today said while announcing the details of the summit.

In AP, the MFI operations have come to a standstill with the fate of Rs 6,500-crore microcredit outstandings hanging in balance. The state insists on regulating the MFI activities backed by the special legislation it brought out last year even as RBI thinks there is no need for such a regulation.

Apart from microfinance practitioners from countries such as Bangladesh, Philippines, Afghanistan, Nepal, Sri Lanka, Africa and USA, the event is being attended by senior officials from both the state and the Centre besides the World Bank and the RBI. Union Minister of State for Environment and Forests Jairam Ramesh and chief minister N Kiran Kumar Reddy will inaugurate the event tomorrow.

INAFI chief executive M Kalyana-sundaram said no mainstream MFI had been allowed to take part in the event. "The summit is being attended by those NGOs that consider microfinance as a part of their larger objective of addressing poverty," he said.

About 75 overseas delegates, 130 members representing community groups and 150 representatives from various NGOs are taking part in the event, according to Sunita Laxma Reddy, minister - Self-Help Groups and Women's Development.

SERP chief executive officer Rajasekhar said the government would soon announce the details of the proposed NBFC being exclusively set up for catering to the microcredit needs of women self-help groups in the state. The NBFC would be launched with a corpus of Rs 300-400 crore contributed by both the Centre and the state government apart from other financial institutions.


For more pictures, please click HERE:
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Microfinance summit for steps to check exploitation of poor

About 75 participants from USA, Philippines, Afghanistan, etc. expected to participate

The motto of the three-day summit is ‘development with dignity'

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HYDERABAD: Worried over the trend of commercialisation of microfinance services originally envisaged as an important strategy to address poverty, an international summit on microfinance to be held here from Tuesday will analyse the reasons and explore ways to bring the sector back on to the track.

Giving the details, Minister for Women Development and Child Welfare and Indira Kranthi Patham (IKP) Sunita Laxma Reddy told reporters here on Monday that the three-day fourth international summit ‘International Alternative Summit on Microfinance and Inclusive Development' will have ‘Microfinance and Inclusive Development' as its main theme.

It was being organised by Society for Elimination of Rural Poverty (SERP), AP Government in association with the National Rural Livelihoods Mission (NRLM) of Central Government and International Network of Alternative Financial Institutions (INAFI).

Ms. Sunita said that about 75 participants from countries like Bangladesh, Philippines, Afghanistan, Nepal, Sri Lanka, and USA were attending the summit along with the representatives of SHGs, government, NGOs and banks.

Chief Minister N. Kiran Kumar Reddy would give the inaugural address and the Union Minister of State for Forests and Environment Jairam Ramesh would deliver the key note address.

The Minister said that unfortunately the MFIs which initially started as NGOs drifted from the objective to promote microfinance as an alternative solution for empowerment of poor communities and focused only on maximising profits by giving multiple loans without due diligence.

This led to several poor families getting caught in the debt trap. That's when the State government brought the legislation to regulate the commercialised MFIs and safeguard the poor.

The three-day summit would have parallel sessions on various themes related to microfinance, issues and challenges and the way forward for inclusive development, she said.

SERP CEO B. Rajsekhar said that this summit would comprise like-minded organisations who view microfinance activities for facilitating the socio-economic development of the BPL families. The summit thus chose ‘development with dignity' as its motto.

Mr. Kalyanasundar, Chief Executive, INAFI, said the summit would focus on community ownership as an alternative to exploitative system by ensuring micro-credit, savings, insurance as a package.

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International microfinance summit from today

HYDERABAD: To put microfinance back on development track, the state government in association with the National Rural Livelihood Mission (NRLM), the Union government and International Network of Alternative Financial Institutions (INAF), will be organising a two-day seminar in the city from Tuesday.

Announcing this at a press conference on Monday, women development and child welfare minister Sunita Laxma Reddy said the microfinance summit, in which MFI practitioners will take part, would focus on sharing knowledge and practice on advancing development of the power with dignity.

The minister said that microfinance in the state had shown an increasing trend of drifting towards crass commercialisation, resulting in many poor families falling into debt trap. This had made the government to introspect as to what had gone wrong with microfinance and also think of ways to put it back on the track.

Microfinance practitioners from Bangladesh, Philippines, Afganisthan, Nepal, Sri Lanka, Africa and USA are among the countries participating in the summit. On the second day of the summit, the delegates will visit and interact with communities with whom Society for Elimination of Rural Poverty is implementing poverty reduction programmes. Chief minister N Kiran Kumar Reddy is slated to inaugurate the programme and Union environment minister Jairam Ramesh will deliver the keynote address. 


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Global Remittance Flows Into Continent Less Than 20 Percent

SINAPI ABA Trust (SAT), a financial institution which seeks to be transforming lives in Africa through micro finance, has revealed that the total global remittance flow into African continent is less than 20 per cent.

The financial institution attributed the low flow of remittance into Africa to lack of confidence and trust building, and exorbitant service charges on the part of the African immigrants.

Speaking in an interview with the Business Chronicle at a conference dubbed 'Harnessing the Potentials of Migration for Development' in Accra, the Chief Executive Officer of SAT, Tony Fosu, added that the percentage of remittances that flows into sub-Sahara Africa when compared with Asia and Latin America countries, which is nothing to write home about.

According to him, the main objective of this conference seeks to link up immigrant associations in the developed world to microfinance institutions in Africa, towards building the necessary confidence so that immigrant organizations and people from Africa can have the confidence to remit money and also to create the necessary environment for people in Africa, to put the money into good use.
Mr. Tony Fosu emphasized that if Africans are able to have access to their remittances on time, they would be able to put the remittances into productive use, such as buying their farming inputs and also pay for other services. This would increase their productivity thereby increase their turn over to improve the national economy.

These institutions face a number of challenges that minimize the comparative advantage they enjoy (for instance geographic location), vis a vis other banking institutions. It is imperative to support MFIs with a realistic lens, in order to increase financial access in Africa through the diaspora".The Principal Investment Officer of African Development Bank (AfDB), Jaaba Rafeal said "The full picture is rather complex because the number of microfinance institutions (MFIs) in Africa operating in the business of remittance transfers is very small, below 5% of all remittance payers.

He noted that although financial institutions generally offer a full range of financial services, the geographic scope of their branches is often limited to their presence in the urban areas.

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INAFI Asia organizes Microfinance and Inclusive Development - An Alternative Summit in Hyderabad, India

Please download conference brochure, by clicking on the picture.


Invitation

We are delighted to write to you to invite you to the Alternative Summit for microfinance being organised by Inafi network (International Network of Alternative Financial Institutions) in association with National Rural Livelihoods Mission, Government of India and Society for Elimination of Rural Poverty, Government of Andhra Pradesh (a Province in India) from 21-23 June, 2011 in Hyderabad, India.  INAFI is a global network which brings together microfinance institutions and NGOs at global, regional/continental and country level.

The theme of the conference is Microfinance and Inclusive Development.  The conference will focus on the development narrative and stories of microfinance interventions from alternative perspective.  

The three day conference will have sub-themes with day one devoted to Client Centric/Community Based Microfinance Programmes and Social Capital, the day two on Development Process and Outcomes Engendered by Microfinance and the day three would look at Innovations, Novel Approaches in delivering financial Services with development focus including savings, credit, insurance and remittances.  

For information, please contact:

M.Kalyanasundaram

Chief Executive Officer

E-mail: inafiindia@gmail.com

INTERNATIONAL NETWORK OF ALTERNATIVE FINANCIAL INSTITUTIONS-INDIA   
(Incorporated as Section 25 not-for-profit Company of Companies Act, 1956)
New No.65, First Floor, 3rd Street, Harvey Nagar, Madurai-625 016, Tamilnadu, INDIA
Tel: 91-452-2300490  : Telefax : 91-452-4358490
E-mail: indiainafi@airtelmail.in ; inafiindia@gmail.com
Skype: inafiindia
Website: www.inafiindia.in

INAFI International website: www.inafi.orghttp://shangrilai.files.wordpress.com/2011/06/microfinance-inclusion-brochure2.pdf