Microfinance Institutions' lobby MFIN has clarified that the RBI-regulated NBFC-MFIs have not been beneficiaries of the Government's 2008 Farm loan waiver scheme, as alleged in some media reports.
According to MFIN (Microfinance Institutions Network), non bank finance company - microfinance institutions (NBFC-MFIs) constitute 90 percent of the Indian microfinance sector.
Alok Prasad, CEO, MFIN said, "Details of the reported CAG inquiry and its alleged findings being referred to in the newspaper report are not yet public. However, as the self-regulatory body of NBFC-MFIs in India, MFIN would like to clarify, on behalf of all its members, that no member MFI has been a beneficiary under the loan waiver program.
"If any other MFI (non-MFIN member) or banks have availed of inappropriate benefits under the farm loan waiver scheme, then strong legal action should be taken against such institutions," he said.
Such allegations against the Microfinance Industry at large reaffirm the pressing need for a robust and uniform regulatory framework covering all Microfinance Institutions, irrespective of their legal form, MFIN said.
The Microfinance Institutions (Development & Regulation) Bill 2012 will steer the industry towards greater client protection and transparency, and will ensure that all MFIs, irrespective of their size and legal form, adhere to the a uniform set of guidelines for the sector, it added.
Currently NBFC-MFIs are guided by regulations laid out by the Reserve Bank of India. and they prioritise their borrowers' interests above all, and conduct business in a fair and transparent manner, the body said.