NBFC-Micro Finance firms to play a key role in financial inclusion
The Dollar Business Bureau By increasing the income cap for the eligibility of a micro-loan borrower as well as the permissible total borrower indebtedness, the Reserve Bank of India (RBI) has indicated its strong support to non-banking financial companies – microfinance institutions ‘(NBFC-MFIs)’ role in financial inclusion. The new move is likely to significantly increase the potential market size without affecting borrowers’ servicing ability and improve operating efficiency of NBFC-MFIs, said a report by the rating agency, India Ratings & Research (Ind-Ra). This move could also be a precursor to expanding NBFC-MFIs’ role in financial inclusion if they maintain and strengthen their underwriting standards. Also, existing MFIs may be tempted to slow down their branch expansion in non-south states, ...
