The Government today approved a a proposal to draw a loan of $100 million (about Rs 450 crore) from the World Bank to promote microfinance in the country.
The Cabinet Committee on Economic Affairs (CCEA) cleared the proposal for on-lending to the Small Industries Development Bank of India (SIDBI), which -- in turn -- would disburse the funds to the microfinance sector.
"The fund will be used to promote responsible and balanced growth of microfinance outreach, particularly in under-served areas where micro finance penetration is low, thereby serving the larger objective of promoting financial inclusion," Home Minister P Chidambaram told reporters after the CCEA meeting.
The decision is expected to help broad-base credit disbursals.
Growth in the microfinance sector has been very high in the last few years, with some of the institutions registering 100 per cent year-on-year growth.
Market reports peg the current size of the sector to almost $1.5 billion, with the global market size being about $50 billion.
