Microfinance Institutions in India and its Legal Aspects

14 Pages Posted: 12 Jul 2011

See all articles by Manisha Raj

Manisha Raj

Amity University; dr. manisha raj

Date Written: July 12, 2011

Abstract

The objective of the present paper is to deal with the concept and working of MFIs with special focus on micro credit and the after effects on the poor occurring specially due to its mode of functioning in Indian economy. As there is no clear demarcation of the regulatory framework of the microfinance institutions in India, overlapping of regulation is prevalent. The government sectors as well as the stakeholders in the microfinance institutions have shown their eagerness to overcome this problem. This paper discusses the recent committee reports and the conflict arising out of the recommendations made in it. The critical financial condition of the MFIs and the suicides committed by the farmers due to financial distress shows the graft involved in the institutional setup and lack of proper vigilance on the government’s part. MFIs are observed as an important instrument for the welfare of the poor so it is the social responsibility of the government to revamp the structure of MFIs and make it more receptive for the benefits of the poor.

Keywords: financial inclusion, self help promoting institutions, priority lending, low cost funds, non-banking financial companies

JEL Classification: G21, G28

Suggested Citation

Raj, Manisha, Microfinance Institutions in India and its Legal Aspects (July 12, 2011). Available at SSRN: https://ssrn.com/abstract=1884186 or http://dx.doi.org/10.2139/ssrn.1884186

Manisha Raj (Contact Author)

Amity University ( email )

Noida
India

dr. manisha raj ( email )

Gram: Lavale, Tal: Mulshi
Viman nagar
Pune
India
8447399789 (Phone)

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