The government of Karnataka, a state in India, recently announced plans to start a state-run microfinance institution (MFI) with an investment of INR 5 billion (approximately USD 110 million), reportedly making it the second state in India to run an MFI, the other being Andhra Pradesh.
The MFI will allegedly lend at an interest rate of four percent per annum and will mainly target workers in the unorganized sector and self-help groups in the state. “There are about 3.5 million unorganized sector workers in the state of Karnataka, who are deprived of any kind of institutional finance,” says Vishweshwar Hegde Kageri, minister for primary education.
The Indian MFIs reporting data for 2009 to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, have an aggregate loan portfolio of USD 4.6 billion, total assets of USD 5.1 billion and 26.4 million active borrowers.
By Trevor Kwong, Research Assistant
Sources and Additional Resources:
[1] Source Article: Business Standard: K’taka to enter microfinance:
http://www.business-standard.com/india/news/k/taka-to-enter-microfinance/415540/
[2] Microfinance Information Exchange: India:
http://www.mixmarket.org/mfi/country/India
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