Calling out for bridling of micro credit industry in India, Nobel Laureate and founder of Bangladesh's Grameen Bank Muhammad Yunus on Friday said that the country should set up regulatory authority for Micro Credit Institutions (MCIs).
Speaking at the Strategic Management Forum (SMF) Conference at the Indian Institute of Management, Ahmedabad (IIMA) via video conferencing, Yunus said that increasingly MCIs had been moving towards becoming loan sharks.
"They (MCI) were created to fight the loan sharks and not to create one. There should be some regulatory authority when you have so many micro credit programmes running. It's time to have one so that people are given out information in a transparent way," he said. Citing Grameen Bank's examples in Bangladesh, Yunus said that the county "has created a micro credit regulatory authority to address these issues".
Grameen Bank offers small loans for self-employment to some of the poorest people in Bangladesh, including beggars.
The bank, with 2,600 branches and total deposits of USD 1.5 billion - of which 46 per cent come from its borrowers - has 8.3 million borrowers, 97 per cent of them women.
"The bank lends over USD 120 million per month in Bangladeshi currency," said Yunus, who received Nobel Prize for peace in 2006.
Elaborating government's role in micro credit, Yunus maintained that the government should not be running the micro credit programmes.
