India's poor need help to help themselves

Discussion in 'Economy & Infrastructure' started by Ray, Mar 9, 2011.

  1. Ray

    Ray The Chairman Defence Professionals Moderator

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    The real truth about Microfinancing in India?

    Is it the hostility of politicians in Andhra Pradesh to microfinance that is the body blow to those trying to get themselves out of poverty?
     
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  3. tarunraju

    tarunraju Moderator Moderator

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    The problem with MFIs in AP is two ways:

    - a private lenders and cooperative banks backed lobby is working at the state-government level to limit the reach of MFIs. Private lending continues to be the single biggest socio-economic problem in AP, particularly in Telangana and Rayalaseema regions.

    - the MFIs are becoming a victim of their own popularity, and they're not able to maintain that sanctity of MFI, when giving out relatively softer loans to borrowers. Since there's a bad lending ratio, they're forced to either use harsh methods to recover "soft" loans, or go out of business, because there's nobody to bail them out. The government is the last entity that they can approach for assistance.
     
  4. Rage

    Rage DFI TEAM Stars and Ambassadors

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    I think as our first DFI social initiative, we should pick out any poor section of a city, and take our volunteers there and have them set up something for the long-term benefit of the region: It could be anything from a simple room, bought and paid for and filled with books donated monthly by members or anyone else; and a single staff member paid or volunteerd to man it during certain hours, so that kids could have the benefit of reading; or a visit one day to a rural area, with a team of NGO's to help them distribute medicine or teach them about basic health & sanitation. Something along those lines, would truly make this forum, a forum it deserves to be.
     
  5. Rage

    Rage DFI TEAM Stars and Ambassadors

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    To wit, microfinance has a lot of problems in implementation. It's a great initiative and in a place like India, where the people are pretty entrepreneurial, it may actually succeed. Default models and repayment strategies, however need to be resolved.


    Here's an interesting article about fiscal discipline, repayment schedules and transaction costs:

    http://docs.google.com/viewer?a=v&q...&sig=AHIEtbTF6z5xZV2y1BknOTyXu_FQP_20Cw&pli=1


    In any case, it seems like micro-credit is set to expand in India:

     
    Last edited by a moderator: May 10, 2015
  6. Rage

    Rage DFI TEAM Stars and Ambassadors

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    Here's why it must be saved:


     
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