My colleagues Minakshi Ramji and Justin Oliver recently informed me that Prabhu Gate, the author of “Indian Microfinance: The Challenges of Rapid Growth” and an eminent figure in microfinance research, is now writing a weekly column in The Economic Times.
His August 21st column, “Branchless Banking in India,” is an excellent summation of the challenges and huge potential impact of the business correspondents (BC) model towards financial inclusion. His argument shows that the challenges are primarily self-inflicted. The result of the damming conservatism Indian government shows in not allowing anyone but large banks to offer a variety of financial services and a deep misunderstanding of politicians about the consequences of capping interest rates for loans to the poor.
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