To prevent self-help group (SHG) women from falling prey to microfinance institutions (MFIs), the Andhra Pradesh government has requested the banks in the state to extend revolving cash credit to SHGs.
“We recently held discussions with the State-Level Bankers’ Committee (SLBC). They (bankers) were positive about the proposal and a final approval from them in this regard is expected anytime during this week,” state minister for rural development, Vatti Vasantha Kumar, told mediapersons here on Monday.
Stating that the Reserve Bank of India had already formed a committee to study the issues and concerns in the MFI sector, the minister said the MFIs will soon be regulated by the National Bank of Agriculture and Rural Development (Nabard), once Parliament passes a Bill governing the sector.
“The Micro Finance Development and Regulation Bill is expected to come up for discussion during the winter session of the Parliament for regulation of all non-profit MFIs structured as trusts, cooperatives and mutual benefit societies,” Kumar said.
The decision to table the MFI regulation Bill comes in the wake of the ordinance issued by the Andhra Pradesh government on October 15, 2010, imposing restrictions and debt restructuring obligations on MFIs.