FM hopeful of early passage of micro finance Bill
The Andhra Pradesh Act seeks to tighten the screws on the industry, which has allegedly been blamed for a spate of suicides in the state due to high interest rates charged by MFIs. Allegations that the use of strong-arm tactics by lenders caused the suicides also dented the MFIs' image.
The southern state accounts for nearly half of the total micro finance business in the country with major players like SKS Microfinance, Spandana Sphoorty Financial and Basix present in the state.
Chidambaram also asked the MFI sector to focus on north-eastern region, West Bengal, Bihar, Uttar Pradesh and other states which are not served or under-served by it.
He said the "financial inclusion architecture" will remain incomplete unless the micro finance is integrated into the financial services delivery system.