A couple months back, we highlighted the inability of Indian Microfinance Institutions to accept deposits as a major roadblock to their growth and sustainability model. A litany of roadblocks stand in the way of passing the Micro Finance Institutions (Development and Regulation) Act, with deposit taking appearing to be a deal breaker.
With the RBI taking a hardline approach on their stance, methods of improving MFI profitability have begun to take an interesting turn.
While most efforts to date have been focused on increasing the revenue side of the profitability equation for MFIs in India, the lack of progress from a policy level is forcing the hands of MFIs to act in other ways. There have been recent calls for compensation levels to be checked, but more importantly, to reduce operational costs within MFIs. Read more »



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