Industry & Economy
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Budget
Budget proposals on micro-finance welcomed
Our Bureau
Mangalore
,
March 1
"INFORMAL sector of banking has been finally recognised," was the response of an NGO to the packages announced in the Budget for micro-finance institutions.
Reacting to the proposals here on Monday, the Executive Director of the Dakshina Kannada-based NGO, Sri Kshetra Dharmasthala Rural Development Project, Dr L.H. Manjunath, said the package for micro-finance sector is a major recognition to the efforts of various NGOs and micro-finance institutions (MFIs) in this regard.
The recent conclave of MFIs at New Delhi had urged the Government to enable the qualified NGOs engaged in micro-finance activities to use external commercial borrowing route, and had sought a regulatory body for micro-finance institutions. The conclave had requested for the increase in the corpus of micro-finance fund.
"Though the Finance Minister had expressed reservations on accepting these suggestions, it is a welcome change that he has accepted some them," he said. He thanked the Minister for taking note of the role being played by MFIs in poverty alleviation programmes.
Welcoming the proposals to re-designate the existing Rs 100-crore Micro-Finance Development Fund as Micro Finance Development and Equity Fund and increase the corpus to Rs 200 crore, he said Small Industries Development Bank of India (SIDBI) should have been given the power to manage the fund. The SIDBI Foundation of Micro Credit has 10 years experience in capacity-building and infrastructure creation of micro-finance institutions.
Referring to the proposal to make NGOs, self-help groups and micro-finance institutions as micro-insurance agents, he said is a sort of victory for micro-finance institutions as most of the major insurance companies are concentrating on urban populace forgetting the rural poor.
Stating that not many good NGOs exist in the northern States to carry out activities related to micro-finance, he said additional support should have been given to the good NGOs from southern India to venture into northern States.
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