Richard Melson

November 2006

Micro Finance India

Releasing the CMF Working Paper on Micro Credit Regulation

Institute for Financial Management and Research

Centre for Micro Finance

24, Kothari Road, Nungambakkam, Chennai 600 034

Working Paper
Sharpening the Debate: Assessing the Key Constraints in

Abstract:

India's microfinance sector has become an international focal point for experimentation and innovation in extending financial services to the poor. We, at the Centre for Micro Finance, believe the sector's evolution has outpaced India's accompanying micro finance regulatory framework. For example, recent events in Andhra Pradesh reflect a growing disconnect in how various stakeholders in the sector interpret existing microfinance regulation and how they believe future legislation should be crafted. We feel this disconnect arises from the lack of clear, workable policy recommendations which adequately incorporate the varied arguments put forth by sector participants.

To meet this demand, we conducted extensive interviews of central and state government officials, MFI practitioners, commercial bankers, foreign and domestic equity investors, and independent consultants. The final report identifies five pressing regulatory issues facing the industry, clearly delineates stakeholders' positions on these issues and makes policy recommendations. We hope that such a report will sharpen the debate, clearly articulate the points of contention, and provide a starting point for consensus-building on the most salient regulatory issues.

Link: http://ifmr.ac.in/cmf/20061102/indian-micro-credit-regulation/

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