This refers to Subir Roy’s column “Creating wealth at the bottom” (Offbeat, December 15). There are many such success stories of prompt repayments, but thanks to a state government’s (read Andhra Pradesh) initiative, one single legislation completely killed microfinance institutions (MFIs). Although the government’s objective to step in to help small borrowers from the high rate of interest being charged by MFIs was laudable, it made a mess of its efforts, and ultimately the small borrowers are again at the mercy of rural finance sharks. What about the public sector banks nationalised long ago to help rural borrowers break free from the clutches of moneylenders?
The article also mentions Ponzi schemes that have driven rural folk to post offices to open savings accounts. Why do the people not trust public sector banks for opening such accounts? Again, the same sad story that the know-your-customer norms have virtually blocked them. The big talk of financial inclusion often heard when the finance minister inaugurates an ATM or a bank branch has not improved the situation in these areas.
K V Rao, Bangalore
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