Money & Banking

‘Profit oriented MFIs are loan sharks’

PTI Mumbai | Updated on February 20, 2011 Published on February 20, 2011

Mr Muhammad Yunus, the Bangladeshi Nobel laureate who revolutionised the micro credit sector in his country, has opined that profit oriented MFIs like SKS should stop calling themselves micro financiers as they are nothing but “loan sharks“.

“If you want to commercialise, please choose a different name... Real micro financiers are not commercially minded.

Grameen Bank and all my enterprises are not commercial entities but social businesses,” Mr Yunus told PTI on the sidelines of CSR meet organised by Wockhard Foundation here last evening.

The world famous social economist said the best service that for profit MFIs can do to the sector is by stopping calling themselves as MFIs.

Mr Yunus pointed out that “the ultimate objective of MFIs is to ensure financial inclusion and not making profit. So long as they work towards this objective, they are microfinance companies and when they start looking at profit they become loan sharks or commercial entities.”

Mr Yunus wondered how SKS promoter Mr Vikram Akula could change the way he did.

Recalling the early years of Mr Akula, he said, “He was a nice person when he launched an NGO after visiting many of my social businesses in Bangladesh. He interacted with me many a time in the past. But what happened to him now, I don’t understand.”

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Published on February 20, 2011
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