New Delhi, Feb. 2
THE Union Finance Minister, Mr P. Chidambaram, said on Tuesday that he had an "open mind" on the issue of appointing a regulator for the micro-finance sector, even as he expressed reservations against over-regulating this sector.
"I think we must approach the issue of having a regulator very carefully. Some categories of micro-finance institutions (MFIs) need to be regulated. But my bias is against regulation. I think we are already an over-regulated society," Mr Chidambaram said at a function organised to felicitate the 2004 winners of the Citigroup Micro Entrepreneur Awards.
Some of the MFIs have been demanding that the Government should set up a Micro Finance Development and Regulatory Authority.
In his address at the awards function, Mr Chidambaram also stressed the need for more organisations, which could intermediate between banks and self help groups (SHGs). He suggested that lending institutions could use intermediaries to lend to SHGs and micro-enterprises.