Non-State Micro-finance in India
India is more known for “reasonable restrictions” rather than the right to thought as
inscribed in Japan Constitution, given in the background, I have been of the opinion that
micro-finance sector (also associated as an academic sub-course under the very
discipline of rural management) having more relationship with caste than qualification,
for example “Tell medicine”, moreover it is basically intentionally amoral whereas it
should be moral on ethical standards to deal with vast flood situations in a poor state
like Bihar. It should be renamed as “holistic finance” in Indian conditions.
There are disaster situation sometimes in India such as earthquake in Uttrakhand and
flood in Bihar when micro-finance fails to serve the purpose. There is no government
control over micro-finance. There is no regulatory body such as National Micro-finance
Development Board whereas for SME finance, there has been emergence of
Mudra Bank. Micro-finance is essentially for micro-credit and livelihood and not for
personal gains and selfish interests of its practitioners. There is little awakening about it
in the nation but even the poorest and most illiterate person understands it by
“microfinance” rather than its cumbersome Hindi term because he or she needs money
at some point of time in his/her life and Institutions engaged in it come forward in
extending it, which should not be said as help or assistance but business with the
In developed countries like the USA, there are payday loans, signature loans, Christian
loans which are not known by micro-finance as against macro-finance because the
situation of poverty as India or other developing countries does not exist in that much
severity there and additionally they get food coupons also whereas in India, only
insurance is of food & labor wages security. There are ultra poor also and there is
situation of social dimensions of poverty when there are communities who are born to
die in poverty. Where should India stand in such cases with microfinance implemented
from long periods?
If it is left as academic discipline in rural management, there are institutes who also
carry out courses like Rurban Society & polity or Displacement, RR and CSR without
caring for significance of micro-finance and its utility.
Micro finance is not meant for networking partners or for owners who can serve in any
legal framework, be it NBFC or NGO or Private bank, there is absolute no hindrance
and anything received even as soft loan can be extended on own will and tactics.
Microfinance does not mean poor remains poor but help poor to stand but that is
possible if micro-credit is soft and combined with livelihood.
The idea of renaming micro-finance as holistic finance should stand good and it should
be more than dealing in five-star environment in so called conferences where people fail
to understand that it is meant for the poor and not the rich, who becomes richer through micro-finance. There is pumping of foreign money for micro-finance but where it goes,
for disbursement of salaries of professionals coming out of institutes who shoulder
micro-finance along with tactical courses like rural society & polity.
So, even if there is requirement of 123rd constitution amendment act, holistic finance
renaming of microfinance should be considered as an option and should not be treated
as a joke in some corner also because in India, English is better at par with its
originating country and the USA. Even the poor understand the term in that way.
And, how does UNCTAD defines microfinance, it says it is a combination of SME
finance and household finance without dealing with fervor and favor of it. There are
characteristics of it in both types of finances. But it is different and that is seldom dealt
with by UN agency because of inhibitions and Sustainable development goals.