Issuing banking licence to microfinance institutions (MFIs) will bring down the cost of borrowings substantially and also help in the penetration of banking activities in un-banked areas.
“MFIs have exposure to 26-30 million households, covering an area that banks find very difficult to go,” SKV Srinivasan, Executive Director, IDBI Bank, told Business Line on the sidelines of an MFI conclave. Srinivasan said, “MFIs are more close to people and, therefore, in a better position to propagate financial literacy than banks.”