PeerPower : Disciplining the MFIs
What a strange coincidence that on a day when SKS Microfinance, one of the leading MFIs of India is approaching the investing public with a huge IPO for about Rs. 1,600 crores to expand its operations, a news item appears exposing the weaknesses in the working of MFIs and the imperative need for disciplining them. Looks like although for some vague reasons, more than 300-400 small or medium scale MFIs are thriving in India amidst competition, regimentation and strict supervision. They are some times advised to be treated as NBFCs. Their rate of interest, branch expansion, credit policies, etc are not overseen by the regulator(s) - RBI or NABARD or SIDBI.