Microfinance in India - A State of the Sector Report, 2007

This report describes the state of the Indian microfinance sector in 2007. It contains articles tracking progress of the two main models of microfinance in India, namely, linkage banking and MFIs. It also covers new areas of significance to the sector, such as self help group federations, evaluation of social performance, urban microfinance, developments in technology and perspectives on regulatory issues. The report states that the growth of the microfinance sector continues to be rapid. It observes that:

• Not all microfinance borrowers are poor;
• More attention needs to be given to depth of outreach and other quality issues;
• On-lending funds constraint reappears;
• Private equity also makes an entry, but its implications are not yet clear;
• New Microfinance Bill takes an important step forward in allowing NGO-MFIs to mobilize savings, but limits savings to thrift;
• Bill excludes the larger, more rapidly growing part of the sector;
• Sectors infrastructure of support services is gradually getting stronger.