Mr.M.K.Jain, Deputy Governor of Reserve Bank of India while speaking at the inaugural session of the Small Industries Development Bank of India (SIDBI) National Microfinance Congress 2019 at Mumbai, said that “Microfinance, involving the extension of small loans and other financial services to low-income groups, is a very important economic conduit designed to facilitate financial inclusion and assist the poor to work their way out of poverty. It is argued that microfinance can facilitate the achievement of national policies that target poverty reduction, empowerment of women, assisting vulnerable groups, and improving standards of living” he said. The deputy governor further said that the recommendations of the UK Sinha committee, which was created to suggest long-term solutions for the economic and financial sustainability of the micro, small and medium enterprises (MSME) sector, were being examined for implementation. Recommendations of the committee include setting up of a Rs 5,000-crore stressed asset fund for domestic MSMEs.
Key points articulated by Mr. Jain in the session are;
The deputy governor also suggested that SIDBI could “hand-hold” microfinance providers in areas such as alternative credit scoring models and in predicting probability of default. The development finance institution should also take the lead in hosting an ecosystem within a well-defined regulatory sandbox to create the infrastructure to reduce the turnaround time and achieve robust risk mitigation.
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