...it’s time to take a realty check on the Indian microfinance sector

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Amidst a very rough and turbulencehit banking terrain, social banking in India is proving to be a smooth red carpet of opportunities. Standing proof of this is the manner in which foreign companies are hitting on India, with a huge capital base earmarked to deluge the Indian microfinance milieu. And for a reality check, here’s an update on the Indian microfinance dartboard.

Recently, behemoths like Morgan Stanley and other microfinance companies like Blue-orchard finance of Switzerland charted their entry into India along with venture capital firms like Sequoia Capital pumping in money into existing microfinance companies. For doubters, one should mention that these investments are backed by some enormous potential of microfinance in India. If past performances are any yardstick, microfinance beneficiaries in India have increased by a staggering 57% from 48,11,674 during March ‘05 to 75,68,842 in March ‘06. Thrillingly, in terms of moneys disbursed, there has been a super high of 72.5%, from Rs.13.11 billion in FY05 to Rs.22.62 billion in FY06.

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative