Panel 3: Microfinance and Empowerment: The Last Mile Challenges and Solutions

Alok Prasad

CEO of Microfinance Institutions Network (MFIN)

“We need constructive participation and collaboration,” said Alok Prasad, CEO of Microfinance Institutions Network (MFIN), aptly summing sum up the panel discussion on Microfinance and Empowerment: The Last Mile Challenges and Solutions at the conference on Bihar: Banking on Inclusion, organised by Governance Now, along with department of planning and development of government of Bihar and Asian Development Research Institute (ADRI).

Prasad was reflecting the concerns expressed by the panelists, which ranged from a crisis of funding and high cost of operation that plague microfinance institutions to the need for social strengthening, taking education and healthcare to the underprivileged sections of society for the idea of inclusive growth to be sustainable and meaningful. There was unanimity that a single intervention like microfinancing was not enough for inclusive growth.


PK Saha

SIDBI Foundation for Micro Credit

PK Saha of SIDBI Foundation for Micro Credit, a microfinance company, said microfinance institutions were facing a “double crisis” – liquidity crisis and cost of compliance. On the one hand high cost of operation and lack of money flow had caused liquidity crisis for microfinance firms, RBI’s new guidelines, like verifying credit worthiness of customers, had added to the cost. These were the challenges that the microfinance companies were facing and needed to be addressed to ensure that this element of inclusion was sustainable.





CS Ghosh

Chairman of Bandhan Venture Management

CS Ghosh, chairman of Bandhan Venture Management, said inclusive growth in education and health was required to make development sustainable. He outlined two major challenges facing microfinance institutions in Bihar as shortage of power supply because of which computarisation of data was not possible and RBI’s restriction on multiple loans to one individual.




Rashmi Sinha

Director of Saija Foundation

Rashmi Sinha, director of Saija Foundation, recounted her own experience in Bihar and talked about the challenges being faced by MFIs in the state. However, she emphasised that the credit worthiness of the poor is way better than those who are well off and that offers hope to the MFIs in the state.





Vineet Rai

MD of Abhiskar Venture Management

Vineet Rai, MD of Abhiskar Venture Management, opined that while poverty cannot be eradicated by MFIs, it can be dealt effectively by them.






BK Mishra

Chairman, Bananchal Bank, Dumka

BK Mishra, chairman, Bananchal Bank, Dumka, said that the need of the hour was collaboration and not competition.  







State Programme Officer, UNDP, Bihar

Harshvardhan, state programme officer, UNDP, Bihar, was vocal about rural credit and talked at length about the important role being played by MFIs in the state. “Rural credit for agriculture for sustainable growth at reasonable rate of interest has always been the issue in Bihar and Kautilya too has dealt with it in Arthshastra.” States like Bihar can attain inclusive growth only if unbanked people are given the facilities by MFIs supported by banks and other financial institutions, he concluded.








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