MFIs and SHGs play important role in poverty eradication: Shri Vijay Bhaskar

Bangalore, 21st Feb 2018: The Association of Karnataka Microfinance institution (AKMi), an industry association of microfinance institutions in the state, completed ten years this February. On the occasion of its 10th founding anniversary, AKMi organised an evening of panel discussions on the future of microfinance industry in Karnataka that was attended by Shri Vijay Bhaskar- Additional Chief Secretary, Government of Karnataka.

The paneldiscussions focussed on challenges and opportunities for the sector in thecurrent times and how it can reinvent itself to maintain its relevance. The panellists included Ms K S Jyotsna - General Manager,Reserve Bank of India, Department of Non-Banking Supervision; Mr SamitGhosh, Managing Director  and CEO, Ujjivan Small Finance Bank; MrUday Kumar, Managing Director and CEO, Grameen Koota and Mr AnandRao, Chairman of AKMi and Founder & Promoter Chaitanya India Fin CreditPvt Ltd. 

Speaking onthe occasion Shri Vijay Bhaskar, Additional Chief Secretary, Governmentof Karnataka said, “Karnataka has been at the forefront ofmicrofinance activities. Microfinance institutions and Self Help Groups havevery important role to play in eradicating poverty. In fact, Karnataka is thenumber one state in implementation of MUDRA which is largely due to involvementof Self Help Groups.  All the Self Help Groups, NGOs and microfinanceinstitutions have worked collaboratively in this space and regulations afterAndhra crisis has also ensured responsible lending. This has put themicrofinance industry in a safer trajectory in the state. Government alsoconsiders microfinance institutions and Self Help Groups an important componentof poverty alleviation programme. It is required that government should closelywork with microfinance institutions. To facilitate the same, there could arepresentative of AKMi in the sub-committee on Self Help Group and the issuescould be better articulated through the sector’s representation in thecommittee.”

 Sharinghis views on current state of microfinance sector in Karnataka, MrAnand Rao, Chairman, AKMi said, “Microfinance sector has played a keyrole in pushing the financial inclusion agenda in the state. Today, the sectorhas an outreach to even the remotest areas and caters to the unbankedpopulation. Micro-credit has not only provided an easy access to credit to thelow income segment but has also encouraged entrepreneurship at the grassrootslevel among the women. The sector today needs to adopt new-age technology toimprove its delivery, customer experience, reach and operations. The digitaltransformation will enable the microfinance institutions to play a key role inbringing the rural areas in the ambit of Digital India as well.” 

The state ofKarnataka has played a pioneering role in the emergence of the microfinancesector in India. The Self Help Group (SHG) bank linkage model of microfinancewas first started in Karnataka. The state has also been the origin bed for manysuccessful for-profit institutions engaged in microfinance. Today, Karnataka’smicrofinance outreach, including both SHG-bank linkage and for-profit model, isthe largest in the country. As of September 2017, the sector had 75 lakhaccounts and an asset size of INR 16,000 crore. The sector employs 33000 peoplelargely in rural parts of the state. 

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