MICROCAPITAL BRIEF: The Associated Chambers of Commerce and Industry of India (ASSOCHAM) Calls for Government-Owned Microfinance Institutions (MFIs)

The Associated Chambers of Commerce and Industry of India (ASSOCHAM), an organization representing approximately 100,000 Indian companies, plans to call attention to lacking rural microfinance service by asking the national government to operate microfinance institutions (MFIs) in those areas. ASSOCHAM reportedly argues that those MFIs currently serving rural India charge prohibitive annual interest rates of between 36 and 60 percent [1].

ASSOCHAM is also planning to lobby for information technology upgrades at District Industries Centers (DIC). The DICs, established in 1978, provide guidance and education to small scale industries (SSI) [2, 3]. DICs are administered independently by each state, so national figures are difficult to ascertain. The Indian state of Gujarat has a population of 50 million people as of 2001, and is served by 25 DICs [4].

ASSOCHAM estimated both components would require a total government allocation of INR 500 billion (USD 11.3 billion) [1].

By Matthew Castner, Research Assistant

Additional Resources

[1] Orissa Diary: “ASSOCHAM Suggest Creation of MFIs to Disburse Credit in Un-Banked Rural Pockets,” April 26, 2010, http://www.orissadiary.com/ShowBussinessNews.asp?id=18076

[2] Government of Meghalaya: “Organisational Structure at the District Level,” http://megindustry.nic.in/orgdist.htm

 

[3] Association of Small Scale Industries, “District Industries Centers (DICs),” http://www.assijammu.com/resources/DIC/District%20Industries%20Centres.pdf

 

[4] Industries Commissionerate – Government of Gujarat: “About us,” http://ic.gujarat.gov.in/about-us/add-dic.htm

 

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