MicroFinance Institutions Network
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| Formation | 2009 |
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| Location |
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Key people | Manoj Kumar Nambiar (Chairperson) Devesh Sachdev (Vice Chairperson) Alok Misra (Chief Executive Officer) |
| Website | http://www.mfinindia.org/ |
The Microfinance Institutions Network is an association for the microfinance sector in India.[1][2]
Business model[edit]
The Microfinance Institutions Network was created to promote microfinance. The network promotes responsible lending, client protection, good governance and a supportive regulatory environment. It was established in October 2009 as a society under the Andhra Pradesh Societies Registration Act 2001. According to its bylaws, all non-banking finance companies registered with the Reserve Bank of India are eligible for membership in the society. The Reserve Bank of India accorded recognition to the network via a letter dated 16 June 2014. The Microfinance Institutions Network works actively with regulators and other key stakeholders.[1]
The Microfinance Institutions Network is organized into four verticals: self-regulation, advocacy and development, communications and marketing, and state initiatives.
The self-regulatory function was part of the Reserve Bank of India's remit to the network to help supervise compliance on behalf of the regulator. Microfinance Institutions Network's internal whistle-blowing mechanism tries not to charge beyond rates suggested by the Reserve Bank of India from its member microfinance institutions. The Reserve Bank of India has set a cap on the lending rate of microfinance institutions at 26 per cent per year and a margin cap of 12 per cent over their cost of funds.
Currently, the network member organizations consist of 55[3] of the leading non-banking financial companies and microfinance institutions, whose combined businesses constitute over 90% of the Indian microfinance sector, excluding SHGs.[1][clarification needed]
Database of borrowers[edit]
The network tries to validate lending money beyond the client's (borrower) capability to pay back by finding the existing borrowings of the client through dedicated microfinance credit bureaus.[4][5] Only two microfinance institutions can lend to one borrower, and together, they cannot provide loans beyond ₹100,000.[6]
The network has facilitated setting up a database of the borrowers, which confirms the necessary validation. The database consists of over 30 million microborrowers and about 60 million loan accounts. When a person applies for the loan, the network checks for the loan history and verifies the Reserve Bank of India benchmark with the credit reports. The credit reports are around 80–90% accurate.[6]
References[edit]
- ^ a b c "Microfinance Institutions Network | Mfin". Mfinindia.org. Archived from the original on 30 June 2012. Retrieved 24 April 2012.
- ^ "MFIN issues post moratorium guidelines for members". The Economic Times. Retrieved 4 December 2020.
- ^ MFIN microscape, www.mfinindia.org
- ^ "Pixyrs Softech | NBFC Software | non Banking Financial Company". www.pixyrs.com. Archived from the original on 9 February 2018. Retrieved 22 May 2022.
- ^ http://www.highmark.in Archived 2014-01-10 at the Wayback Machine
- ^ a b P. N. Vasudevan. "Opinion / Op-Ed : Warts and all, micro finance is working". The Hindu. Retrieved 24 April 2012.
External links[edit]
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