Sanjay Sinha (Managing Director, M-CRIL)

Availability of human resources is the real challenge. During the rating of an MFI, it was found that the manager of a branch was, in fact, a trainee (a “training trainee” according to him). The system of trainees training trainees is not sustainable.

Many MFIs, in an effort to minimise costs, increase the loan size. The average cost does decrease, but depth of outreach is compromised.

The portfolio quality of the large MFIs has not been affected by the financial crisis. Political risks are a bigger cause for concern. Still, the effects of loan waivers and elections on the portfolio quality, are not clear.

While the microfinance bill did come before the Standing Committee, the report did not appear in the manner in which the sector wanted.

B. P. Vijendra (CGM, RPCD, RBI)

Banking correspondents or technology enable banks to reach new people. Instead of trying to bring in new players as banking correspondents, it is important to look at the players currently permitted to operate. Fine tuning will help increase outreach.

Ram Kumar (DGM, SBI)

It isn’t necessary for MFIs to set up branches in remote areas. An alternative in banking correspondents can be explored.  In becoming banking correspondents, MFIs can take advantage of the client tracking and increase outreach.

MFIs are extending services to unbanked and underbanked. They can take advantage of the financial inclusion fund to increase outreach.

Because of some incidents, players in the sector insisted on regulation. Now, the microfinance bill stands for review by the Standing Committee.

Aloysius Fernandez (Chairperson, Sanghamitra Rural Financial Services)

The deeper the poverty, the lesser the micro credit effectiveness.

When an individual member stays with a group for more than 8 years, having taken 15 to 20 loans to the tune of Rs 1, 50,000 to Rs 3, 00,000,  only then can that person stand on her own feet.

B. B. Mohanty (CGM, NABARD)

Rating agency reports indicate that most MFIs have weak internal control and governance systems. There should be focus on strengthening these aspects through timely audits and improved governance.

On interest rates: The sector has to decide on an interest rate which is reasonable and acceptable in the competitive environment.

Factors important for development are: financial inclusion, credit linkage and micro enterprise promotion.

Different agencies report different figures for the same MFIs. There is a need for a complete and comprehensive survey of all MFIs in India.

Professor  S. M. H. Islam Latifee (Managing Director, Grameen Trust)

The 5-star rank reflects the committment of Grameen Bank in achieving its social mission.

Branch and staff are awarded with “stars” for achieving different outcomes. 
Green Star: 100% repayment
Blue Star: Profits
Violet Star: Self sustainence
Brown Star: all children of clients have been or are being educated
Red Star: Client families out of poverty

Veena Mankar (Managing Director, Swadhaar Finaccess)

The urban poor lack access to adequate space, sanitation, water and security. In Mumbai alone, 2.5 million families in slums are unbanked. Microfinance needs to include its excluded customer – “the urban poor”.

Diversity in the background, occupation and mobility of the groups adversely affects their strength. Therefore, individual loan models must be developed.

Rajiv B. Lall (Founder, Lok capital Group and MD, IDFC)

For the double bottomline to work, it needs an element of community participation not only in decision-making but also in ownership.

Helping people raising capital to spread the system is our mission. Funding is the main constrain for almost every MFI.
The economic crisis definitely affects us and it is a huge challenge to raise money, especially for start-ups and young organisations.
Anyway, the MF-sector is doing much better than other sectors because the poor are more isolated from the system.

At the conference I am here for meeting people. In fact Yunus’ session was the first I attended at these conferences. But it is an interesting opposition to meet, here are lots of useful people and of course friends.

Eric Savage
Managing Director, Unitus Capital

Alok Prasad (Country Director, Citi Micro

finance) reaffirmed the neccessity of assessing a borrowers repayment capacity. “There are two things at work here – the ability of the borrower to repay the loan and the willingness of the borrower to repay the loan,” he explained. While also touching upon the changing needs of different client segments, he also expressed the need for MFIs to customise credit products.