By: pmrao

pmrao — Thu, 11 Mar 2010 12:00:45 +0000

The entire system of functioning of MFIs is designed to suit to the convenience of customers. For ex. Disbursement of loans and recoveries are made at the door steps of customers. Periodicity of collections, ensuring certainity to give loan after repayment of existing loan, timely sanctioning of loans give lot of confidence to the customers. As a executive in ING VYSYA BANK I attended number of centre meetings and when I interacted with the borrowers directly, they never raised objection for charging higher rate of interest. They always made comparision with commercial banks and local money lenders and expressed satisfaction with MFIs though they charge little high rate of interest when compared to banks. A good recovery culture is being created by MFIs. Hence I feel MFIs can charge reasonaly high interest and at the same time, MFIs should plan of taking some welfare measures such as opening some Educational institutions or hospitals either singly or thorugh group of MFIs and they should serve exclusively the customers of MFIs.

By: Fehmeen

Fehmeen — Tue, 09 Mar 2010 20:12:19 +0000

I know someone who works in a microfinance bank. They recently said MFIs are in this for the money. I was partially shocked but them remembered that MFIs in Mexico charge interest rates that are around 100% and they yield returns of around half that value. It’s bizarre to justify high rates with soaring costs if the return offered is this high.

Comments on: Live Debate –I: Microfinance industry experts debate over Inflated Interest Rates

By: pmrao

By: Fehmeen