The Microfinance Institutions Network (MFIN), a self-regulatory organization of 35 Indian microfinance companies, has asked Microfinance Transparency (MFTransparency), a US-based non-governmental organization that aims to disseminate accurate and comparable microfinance product cost information, to post on its website information on the interest rates charged by as many of the microfinance institutions (MFIs) in India as possible. This is expected to occur within the next few months. The MFIN has also asked the National Council of Applied Economic Research (NCAER), an Indian non-profit research institution, to be involved with this project. “NCAER will be compiling rates available to borrowers from various sources such as microfinance institutions, money lenders, banks [and] others,” said Vijay Mahajan, president of MFIN and chairman of BASIX Group, a non-banking finance company involved in microfinance activities in India.
“To bring in more transparency, it has been decided to present interest rates charged by all microfinance institutions by product, by region on www.mftransparency.org. The rates would be converted into annual percentage returns to avoid confusion,” commented Mr Mahajan. Providing transparency to consumers allows them to make better informed borrowing decisions. It has not been disclosed how this online initiative will be financed.
By: Christine Chang, Research Associate
About Microfinance Institutions Network (MFIN):
The Microfinance Institutions Network (MFIN) is a trade association of Indian microfinance lenders. Vijay Mahajan, Chairman of MFIN, is also the Chairman of the BASIX Group, an Indian microfinance institution established in 1996. BASIX Group consists of several companies that provide savings and insurance services to poor households in rural India as well as agricultural/business development services and institutional development services.
About MFTransparency:
Microfinance Transparency (MFTransparency) is a US-based, non-governmental organization founded in 2008 with the purpose of facilitating transparent markets through the dissemination of accurate and comparable cost information to all stakeholders. The group has organized transparent pricing efforts in Bosnia, Peru, Cambodia, Azerbaijan, Kenya and Bangladesh. More than 200 industry professionals and organizations have committed to transparent pricing by endorsing MFTransparency and its initiative.
Additional Resources:
DNA India website: Microfinance rates soon a click away, April 23, 2010: http://www.dnaindia.com/money/report_microfinance-rates-soon-a-click-away_1374502
MICROCAPITAL BRIEF: Microfinance Institutions Network (MFIN) Predicts Efforts Will Lower Microfinance Interest Rates in India, March 23, 2010: https://www.microcapital.org/microcapital-brief-microfinance-institutions-network-mfin-predicts-efforts-will-lower-microfinance-interest-rates-in-india/
MICROCAPITAL BRIEF: India’s Microfinance Institutions Network (MFIN) Members to Create Credit Bureau in an Effort to Prevent Client Overindebtedness and Maximize Repayment, March 11, 2010: https://www.microcapital.org/microcapital-brief-india%E2%80%99s-microfinance-institutions-network-mfin-members-to-create-credit-bureau-in-an-effort-to-prevent-client-overindebtedness-and-maximize-repayment/
MicroCapital Universe: Microfinance Institutions Network (MFIN): https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+India+Network+%28MFIN%29
MicroCapital Universe: MFTransparency: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=MFTransparency
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
Similar Posts:
- MICROCAPITAL BRIEF: Publish What You Fund Releases DFI Transparency Index Ranking Disclosure Record of 30 Development Finance Institutions
- MICROCAPITAL BRIEF: Svatantra of India Paying Navi Group $179m for Microfinance Subsidiary Chaitanya
- MICROCAPITAL BRIEF: Incofin Closes India Progress Fund with $77m to Promote Financial Inclusion, Agricultural Value Chains
- MICROFINANCE PAPER WRAP-UP: “Microfinance in India: Issues, Challenges and Opportunities;” by Mohammad Abu Saleh, Zubair Ahmad
- MICROFINANCE EVENT: Sa-Dhan Conference on Financial Inclusion; November 14-15, 2022; New Delhi, India
