The government of Bahrain plans to seek technical assistance from India’s microfinance sector in establishing future government-sponsored microfinance programs. Minster of Social Development Fatima Al Balooshi will lead a delegation to India next week to discuss technical assistance prospects with officials at various government and private institutions involved in India’s microfinance development. Institutions on the delegation’s itinerary include India’s NABARD (National Bank of Agricultural and Rural Development), an unnamed microfinance research institution, as well as various NGOs associated with microenterprise development.

“India has a vast experience in the area of microfinancing, which has contributed to the development of families belonging to low income groups. [...] We want to learn from that experience for the benefit of our people in Bahrain,” Al Balooshi said in an interview with Gulf Daily News.

Microfinance activity in Bahrain is very limited. As reported by MicroCapital, the country’s first MFI Innovation Bank commenced operations in August 2007 with USD 25.6 million in authorized capital. Innovation Bank appears to be the only registered MFI operating in the country.

By contrast, microfinance in India has witnessed dramatic growth in recent years. According to an Intellecap study, between 2003 and 2007 India’s 60 largest MFIs – which constitute 95% of all microlending – experienced a cumulative annual growth rate of over 70 percent, and an average increase in return-on-equity from 2.2 percent to 33.2 percent. As of March 2007, these MFIs served nearly 10 million clients and held a cumulative outstanding loan portfolio of USD 769 million.

By Ryan Benson, Research Assistant

Additional Resources:

MIX Market: Country Profile for India

Thaindian: Bahrain to seek India’s help in micro-finance sector

NABARD: Home

Microfinance Gateway: Microfinance In India – A State Of The Sector Report

Microfinance Gateway: A Primer on Microfinance in India

UNDP: Microfinance Assessment Report: Bahrain

MicroCapital Story: The Gulf’s First of its Kind Microfinance Institution, Innovation Bank, Launches in Bahrain