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.
|Published (Last):||17 April 2007|
|PDF File Size:||6.51 Mb|
|ePub File Size:||12.34 Mb|
|Price:||Free* [*Free Regsitration Required]|
I agree that the committee provides much needed legitimacy to the sector by emphasizing the need for enhanced regulation.
While we can separately discuss on the pros and cons of some of the suggestions, I really liked one idea of yours which is the public private partnerships. I think it would be unfair to criticize the Malegam committee report on the lack of implementation detail – after all, much of this can be detailed out only after the RBI accepts the various recommendations and I am sure that necessary precautions by the RBI will be taken with regard to codes of conduct, client protection measures, corporate governance etc.
To clarify, the issue is not one of not wanting to take on the regulator – I have been fairly critical of supervision in Indian MF and also talked of regulatory failure here Pragmatism is necessary coupled with better regulation to ensure to craete a win win situation. Consider extending banking correspondent model to MFIs – for and non-profits. Thanks once again for all your comments Best Regds Bonam Srinivas.
Dear Ramesh, This is a wonderful blog.
I don’t understand though what is in the report that would stop state governments from doing what it did in AP again and again. Instant Payday Loans Within 24 Hours. But the immediate concern for the regulator is to address the customer protection and other issues raised by the Govt. 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 of the key problems like ghost lending, 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. That is what Rameshs analysis shows. Fourth, replrt report has recognized and stressed the importance of off-site and on-site supervision of NBFC MFIs including systemically important ones while also alluding to the need for significantly enhancing the supervisory capacity of RBI with regard to micro-finance. Many of these issues can easily be addressed by dialogue and discussion and do not take away microfihance excellent reporrt done by Malegam committee — that microfinnce a point that I would like to make clear upfront…Read on….
Finally, regulate not micro-manage. Thanks Ramesh informative articles. As far as I know – none.
Work From Home As many have argued, the proposed margin caps would force MFIs to make larger loans. Vijay January 24, oj 9: Eighth, it would also be useful if the committee looks at the aspect of equity investment in MFIs and microfniance necessary safeguards to ensure that what happened in AP does not recur again. If this recognition was to come with tighter regulations – 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.
Bonam Srinivas January 28, at Overall, the Malegam Committee has done a highly commendable job with a very complex problem and that needs to fully recognized and well appreciated.
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.
Malegam Committee Report on Microfinance: What’s On The Platter?
Everyone was aware of the problem but seemed helpless, all the attempts by Industry association were invain maleagm none had the time maelgam interest to work for a sustainable solution the debate on this continued endlessly till the Govt came down heavily and forced the MFIs to submit the data Seriously consider the proposal of small finance banks.
Have a great day and wonderful start into the week! We have reproduced the same on the India Microfinance website. Enable public-private partnerships by linking MFIs with state-run microcredit programs.
It has shown the right strategic intent and direction for establishing a uniform national regulatory framework for micro-finance in India that attempts to repprt 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 microfinancf 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….
Instead of criticizing further let me offer some suggestions the RBI could consider before releasing the regulatory framework: How to earn Rs in 10 Minutes. Not sure, how RBI would balance this Posted by Ramesh S Arunachalam at 9: At the cost of repeating some malega, the things I have the following to say – You may be aware that despite several requests from the sector till the recent past RBI was reluctant to regulate the sector as they felt it would stifle the growth.
Malegam Committee Report – Summary of Key Recommendations
Dear Ramesh garu, As always I enjoyed reading this thoughtful analysis. No doubt the report brings out some excellent recommendations that would go a long way in strengthening the sector.
Swarup January 24, at 9: 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.
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 of the key problems like ghost lending, multiple lending, over lending and attempting to outline some measure to tackle them as well.
Read a lot of your work and enjoy it The much-awaited Malegam committee report is laudable because it is the 1 st committee report of some significance to attempt the creation on of a national regulatory framework for MF in India. Drop everything from the report that could stifle competition, threaten the existence of small MFIs, heighten entry barriers, make it difficult to reach remote and difficult terrains, limit borrower choice, limit lending methodology, discourage innovation and those clauses that are impractical to enforce.
The Malegam committee report must be strongly appreciated because it seeks to legitimize microfinance as an integral part of the Indian financial sector.
Ramesh S Arunachalam January 26, at