India’s Maharashtra Govt invites Yunus help in microfinance

India’s Maharashtra Govt invites Yunus help in microfinance

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The Maharashtra government is seeking the help of Nobel laureate Muhammad Yunus, the father of microcredit to introduce a microfinancing system for small and medium scale industries in the state, The Indian Express and The Hindu reported on Wednesday.
State Finance Minister Sudhir Mungantiwar, Rural Development and Women and Child Development Minister Pankaja Munde and Minister of State for Finance and Rural Development, Deepak Kesarkar, will hold a preliminary meeting with Yunus on September 6.“He is an expert in the field and can help us chalk out a roadmap for introducing microfinancing in Maharashtra. We will meet him over lunch to discuss the experience in Bangladesh, the problems they faced there and the challenges,” said Mungantiwar.
The Maharashtra government has set aside Rs 200 crore for small industries in the state budget for 2015-16.
“We have already sanctioned the amount in the budget, but the idea is to see if we can develop a system where funds can be sustained by giving the aid as loans and recovering it, instead of a grant,” added Mungantiwar.
Officials from the departments of finance, planning, forest, women and child development and rural development will be present at the meeting with Yunus.
The finance minister said Maharashtra has about 2.54 lakh small scale industries of which 30,549 are shut.
Microfinancing is a banking service offered to individuals or groups with low incomes who are otherwise left out of the formal financial services sector. The aim of microfinance is to give low-income people or groups an opportunity to become self-sufficient by providing them a means of borrowing money, creating savings and getting insurance cover. Microfinance institutions too charge interest like traditional banks, but the rates are much lower. Opponents of this concept have, however, criticised microfinance institutions for making profits off the poor.
Yunus, who was awarded the Nobel Peace Prize in 2006, is credited with having pioneered the microfinancing concept as the head of Bangladesh’s Grameen Bank.- Yunus Centre

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