Microfinance Sector and the Supportive Role of Regulator in its Transformation: A Case Study from India
- Title
- Microfinance Sector and the Supportive Role of Regulator in its Transformation: A Case Study from India
- Creator
- Thomas J.R.; Kumar J.
- Description
- Microfinance is a proven business model to deliver financial services to unbanked. In the beginning years of microfinance, Non-Governmental Organizations (NGOs) were engaged in microfinance initiative and used to raise capital through grants for their microfinance program, similar to other grant-based development initiatives. To become self-sustainable financial institutions, NGOs started to transform their microfinance initiatives to a for-profit legal entity. Microfinance experienced commercialization in the process of transformation which neglected the basics of microfinance, especially in protecting the interest of clients. Supportive role of regulator transformed the Indian microfinance sectors and formed sustainable financial institutions. The successful story of Reserve Bank of Indias (RBI) intervention in shaping Indian microfinance sector counters the argument of free market principle in fixing the interest rate and healthy regulation for microfinance institutions. Supportive role of Reserve Bank of India created win-win situation for both microfinance borrowers, microfinance institutions and other stakeholders for the long-term sustainability. The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2021.
- Source
- Financial Inclusion in Emerging Markets: A Road Map for Sustainable Growth, pp. 219-235.
- Date
- 2021-01-01
- Publisher
- Springer Nature
- Subject
- Commercialization; Institutions transformation; Microfinance; Microfinance sector growth; Supportive regulations
- Coverage
- Thomas J.R., CHRIST (Deemed to be University), Bengaluru, India; Kumar J., CHRIST (Deemed to be University), Bengaluru, India
- Rights
- Restricted Access
- Relation
- ISBN: 978-981162652-4; 978-981162651-7
- Format
- Online
- Language
- English
- Type
- Book chapter
Collection
Citation
Thomas J.R.; Kumar J., “Microfinance Sector and the Supportive Role of Regulator in its Transformation: A Case Study from India,” CHRIST (Deemed To Be University) Institutional Repository, accessed February 24, 2025, https://archives.christuniversity.in/items/show/18736.