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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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.
Source
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