- Latest News
- In the field
- Microfinance Plus
- Latin America
- Writer's Corner
- Microfinance Mantra
- Featured Latest News
- Islamic Microfinance
- Micro Insurance
- Mobile Banking
- North America
- South America
Regulations are essential for financial inclusion
Submitted by mffocus on Tue, 12/13/2011 - 23:36
Microfinance Focus, December 13, 2011: With Reserve Bank of India stepping in to regulate NBFC-MFIs and a Microfinance Regulation Bill pending for enactment, industry experts discussed the role of regulators in achieving financial inclusion at the Microfinance India Summit in New Delhi today.
Kate Mckee, Senior Advisor of the CGAP said that regulations clarify ambiguities and play a role in product diversification.
“I do think it is very important to set a certain floor on the behaviour of markets and is important in building consumers confidence”, she said.
Hassan representing the Central Bank of Bangladesh, pointed out the dichotomy in policy and regulation. “In Bangladesh, in addition to financial stability, we’ve included the role of promoting financial inclusion by strengthening payment system especially the mobile banking system. Similar to the RBI, we have certain targets of agricultural lending. And we do have targets to the SME sector as well. And several of these targets are done by commercial banks through MFIs.”
Vijay Mahajan, Founder and Chairman of BASIX group, thinks that the RBI regulation is a very good step forward but it should not be the final point. He commented that, “It is the first time in the industry that a regulator has put down in writing that 26% interest rate is fine.”