The book ‘Microfinance India: State of the Sector Report 2009’ by N. Srinivasan reveals that most MFI are on way to digress from customer focus and their mission. The goals do not any more seem to be making credit access affordable to poor, or accompanying the livelihoods of people. Book value multiples, price to earning ratios and enterprise valuations dominate the discussion. High interest rates are justified as necessary to find more mainstream funds for further growth.”

He has mentioned that the recent problems seen in Karnataka, UP and other states are precursors to customer resistance to the model of microfinance in practice. He has foresighted that the pursuit of expansion as the only goal and high enterprise valuation as the mission can invite heavy-handed regulation and political intervention.

The author has suggested that the implementation of subsidy programmes should be done through banks and MFIs alike without discrimination from the Government. Centre should take steps to counsel the states on the role and space given to MFIs and highlight the legitimacy of their operations. The book advocates a clear role of Government as well as RBI in microfinance.

The book ‘Microfinance India: State of the Sector Report 2009’ by N. Srinivasan reveals that most MFI are on way to digress from customer focus and their mission. The goals do not any more seem to be making credit access affordable to poor, or accompanying the livelihoods of people. Book value multiples, price to earning ratios and enterprise valuations dominate the discussion. High interest rates are justified as necessary to find more mainstream funds for further growth.”

He has mentioned that the recent problems seen in Karnataka, UP and other states are precursors to customer resistance to the model of microfinance in practice. He has foresighted that the pursuit of expansion as the only goal and high enterprise valuation as the mission can invite heavy-handed regulation and political intervention.

The author has suggested that the implementation of subsidy programmes should be done through banks and MFIs alike without discrimination from the Government. Centre should take steps to counsel the states on the role and space given to MFIs and highlight the legitimacy of their operations. The book advocates a clear role of Government as well as RBI in microfinance.