Financial needs of MFIs in India to reach $200 billion: ASSOCHAM

Associated Chambers of Commerce and Industry of India (ASSOCHAM) today said the financial needs of the micro-finance institutions (MFIs) in India are estimated to reach $200 billion and hence new sources of finance are required for them.

"The financial needs of MFIs are estimated at $200 billion in the long term," ASSOCHAM President Dilip Modi said during a national conclave on 'Micro-finance: Strangulate or Regulate', organised by the industry body here.

"New sources of financing are therefore essential and private investors will certainly be playing a key role in their growth", he added.

Modi said the issues of alternate funding, reduction in operating costs, restricting indebtedness and income criteria need to be fine-tuned and supported for healthy and vibrant growth of MFIs.

ASSOCHAM expects that introduction of multi-purpose national identity cards would revolutionise the micro-finance sector by bringing down transaction costs.

The present quantum of micro-finance can be enhanced by sustained efforts on the part of financial institutions, self-help groups and interested NGOs, it added.

Karnataka's Rural Development and Panchayat Raj Minister Jagadish Shettar said after Andhra Pradesh, Karnataka is the second fastest growing State in the country for micro-finance activities.

The State has 27 MFIs with 32 lakh clients, in addition to more than 30 lakh members of some 2.32 lakh self-help groups, Shettar said.