• 9964432222
  • Mail Us
  • Appointment
  • Locate Us
  • Chat Now
  • Courses
  • Login
  • Register
Manifest IAS
JournalsOfIndia
Manifest Learning Academy
  • Home
  • SNIPPETSfor Prelims
  • ARTICLESfor Mains
  • BROWSEBY SOURCE
  • DOWNLOADS
No Result
View All Result
  • Home
  • SNIPPETSfor Prelims
  • ARTICLESfor Mains
  • BROWSEBY SOURCE
  • DOWNLOADS
No Result
View All Result
JournalsOfIndia
No Result
View All Result
Home Economy

Micro Finance Institutions (MFIs)

April 26, 2021
in Economy
Reading Time: 2 mins read
0
Micro Finance Institutions (MFIs)
205
VIEWS
Share on WhatsAppShare on TelegramShare on Facebook
image_pdfMake PDF

What exactly are MFIs?

  • Microfinance Institutions, also known as MFIs, are businesses that provide financial services to low-income people.
  • Typically, they operate in rural areas and among low-income people in urban areas, spreading small loans.
  • MFIs offer much-needed assistance to the economically disadvantaged, who would otherwise be at the mercy of high interest rates and the local moneylender.
  • The model began as a mechanism for poverty alleviation, focusing on the economic and social upliftment of marginalised groups by lending small sums of money to women for income-generating activities without any collateral.
  • Some MFIs that meet certain requirements and are non-deposit taking entities are regulated and supervised by the RBI as Non-Banking Financial Companies (NBFCs). NBFC MFI refers to these “Last Mile Financiers.”
  • The aim of bringing them under the RBI’s jurisdiction was to make these NBFC MFIs more healthy and accountable.

Digitalization and the MFI Sector’s Expansion

  • Several improvements to the sector’s operating model have been implemented over time, including digital interventions in the lending value chain.
  • Digital technologies have been embraced by MFIs to remove redundancies, allow fast customer onboarding, loan disbursements, and even cashless collections.
  • MFIs have been able to use digital technology to not only reach a larger number of clients and therefore expand at a faster rate, but also to do so more efficiently by streamlining processes and shortening turnaround times.

Challenges associated with MFI 

  • MFIs’ Social Objective Has Been Overlooked: In their pursuit of development and profitability, MFIs’ social objective—to better the lives of society’s marginalized—seems to have been steadily eroding.
  • COVID-19’s Impact: It has had an effect on the MFI market, with collections taking a hit at first and disbursals already lagging behind.
  • Inadequate Information: Although total loan accounts have increased, data on the relative poverty-level improvement of MFI clients is fragmented, making it difficult to determine the actual effect of these loans on clients’ poverty levels.

Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI)

  • The NBFC-MFI is a financial institution that does not accept deposits.
  • Minimum Net Owned Funds (NOF) of Rs. 5 crore is needed to qualify as an NBFC-MFI.
  • Qualifying Assets account for at least 85% of the company’s net assets.
  • Qualifying Assets are assets that will take a significant amount of time to prepare for their planned use or sale.
  • The distinction between an NBFC-MFI and other NBFCs is that, whereas other NBFCs can run at a high level, MFIs only cater to the lower social strata who need smaller loans.
image_pdfMake PDF
Source: The Hindu
Tags: News PaperPrelims

Related Posts

National handloom Day

National handloom Day

August 8, 2022
RBI’s seven Surveys on Indian Economy

RBI’s seven Surveys on Indian Economy

August 8, 2022
Fifth anniversary of the Centre for Trade and Investment Law (CTIL)

Fifth anniversary of the Centre for Trade and Investment Law (CTIL)

August 6, 2022
RBI hikes Repo Rate by another 50 basis points

RBI hikes Repo Rate by another 50 basis points

August 6, 2022
Central Consumer Protection Authority( CCPA)

Central Consumer Protection Authority( CCPA)

August 5, 2022
Gati Shakti University

Gati Shakti University

August 4, 2022
Slump of Indian Rupee

Slump of Indian Rupee

August 3, 2022
Patent Agents

Patent Agents

August 2, 2022
Revamped Distribution Sector Scheme of Power sector

Revamped Distribution Sector Scheme of Power sector

August 1, 2022
India International Bullion Exchange

India International Bullion Exchange

July 30, 2022
Please login to join discussion

Our Offline Classroom Student

PRELIMS 2021 POLITY QUESTIONS ANALYSED

https://youtu.be/5q8hBcRGhAs

PRELIMS 2021 HISTORY QUESTIONS ANALYSED

https://youtu.be/v0SIZ7SUybg

CONGRATULATIONS TO 2021 TOPPERS !!!

Rank 171 Kumar Shivashish
Rank 250 Sahithya
Rank 263 Sumit Kumar Thakur
Rank 311 Deepak Ramachandra Shet
Rank 455 Ravinandan B M

August 2022
MTWTFSS
1234567
891011121314
15161718192021
22232425262728
293031 
« Jul    

Browse by Category

  • Agriculture
  • Disaster Management
  • Economy
  • Environment
  • Ethics
  • Foreign Affairs
  • Geography
  • Governance
  • History
  • Law & Policy
  • Opinion
  • People in News
  • Places in News
  • Science & Tech
  • Security
  • Society
  • Sports
  • Uncategorized

Browse by Tags

AIR BBC Business Standard CNN Deccan Herald DownToEarth Down to Earth DTE Economic Times ET GS-1 GS-2 GS-3 GS-4 Hindustan Times IE India & the world Indian express India today Indiatoday Kurukshetra LiveMint Mains News Newspaper News Paper PIB PIB & The Hindu pre Prelims PRS India RSTV Science Reporter Survey The Hindu The Hindustan Times The India Express The Indian Express The New Indian Express Times of India TOI TOPPERS UNDP website Wikipedia Yojana
JournalsOfIndia

Our vision is to orient the readers to grasp the facts objectively and analyse critically. In the rush of reaching first to the readers, the websites miss the balanced opinion, which is the need of the hour. We aim to reach the readers with more crispness, preciseness and relevance. We bring the articles in UPSC way for the civil services aspirants and the Wisest Way for general readers.

Categories

  • Agriculture
  • Disaster Management
  • Economy
  • Environment
  • Ethics
  • Foreign Affairs
  • Geography
  • Governance
  • History
  • Law & Policy
  • Opinion
  • People in News
  • Places in News
  • Science & Tech
  • Security
  • Society
  • Sports
  • Uncategorized

Browse by Tag

AIR BBC Business Standard CNN Deccan Herald DownToEarth Down to Earth DTE Economic Times ET GS-1 GS-2 GS-3 GS-4 Hindustan Times IE India & the world Indian express India today Indiatoday Kurukshetra LiveMint Mains News Newspaper News Paper PIB PIB & The Hindu pre Prelims PRS India RSTV Science Reporter Survey The Hindu The Hindustan Times The India Express The Indian Express The New Indian Express Times of India TOI TOPPERS UNDP website Wikipedia Yojana

Newsletter

The most important UPSC news and events of the day.

Get Journals daily newsletter on your inbox.

© 2020 JournalsOfIndia - A free initiative by Manifest Team.

  • Login
  • Sign Up
  • Home
  • SNIPPETS
  • ARTICLES
  • BROWSE
  • DOWNLOADS
No Result
View All Result

© 2020 JournalsOfIndia - A free initiative by Manifest Team.

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In