Day 1 Microfinance India Conference

Access’s microfinance India conference is an annual gathering of various stakeholders of the sector. For last three years it has been a huge success. The conference has a dedicated website.

The day 1 discussions were mainly centered across two very different but important emotions. Everybody had an upbeat feeling about the growth of the sector and yet another year of learnings and progress,. At the same delegates were also concerned about the events at Kolar. There were some series of events that lead to huge defaults and non-repayments. Various experts are trying to get into the details and reasons for the same. (At CMF, Veena Jayaram has done a case study on same and will soon be uploaded here). I was surprised when Vijay Mahajan towards the end of day mentioned Kanpur. While I was aware about events and defaults in the city, I never heard about it from others.

The first session was about losses and gains in the sector. State of sector report, written by N Srinivasan was launched and the discussion hovered around it. Since the book captures most of the players of the sector, I think most of the issues were covered. My favorite speaker however was Swaminathan (of swaminomics fame) who mentioned about “struggle of soul.” He referred indirectly to mission drift or lets say mission dilemma of MFIs. This issue has been touched up on at various occasions and I guess gradually MFIs will envisage more benefits in sticking to a social agenda along with a financial. In fact in the last session, Suresh Gurumani of SKS mentioned that they are using a customer friendly insurance plan (the plan has an endowment facility sought mostly by Indian insurance borrowers) instead of a simple insurance that they used earlier. Swami also talked about interest rates. Though in last couple year, I thought this debate does not hold much ground these days, I was wrong; there is still a continuing discussion on this. Y C Nanda, talked importance of rotation of money instead of annualized interest rates. Jargons!. well he referred essentially to how people use money and how many times they are able to rotate it and if this is the case interest rates does not matter.

There were sessions on savings, client protection, and women leadership. But I can not stop myself to jump to the last session moderated by Vijay Mahajan. Well he ended it by saying, “we are at a juncture where we can not fail, microfinance caters to 60-70 million clients, and if we fail we will go back 30 years where “mahajans” (local moneylender) will prevail.” It was witty and conveyed the message. Kate Mckee (CGAP), wanted social and financial wheels of microfinance cycle to be balanced, when Vijay asked her if she see gap! Well, there was information on credit bureau much talked and sought. While the information that bureau will provide and how MFIs will process it is still not very clear, we know that this is happening. The name of bureau will be Alpha (may not be the correct spelling) and NBFC MFIs are putting in money. The last session was called Responsible lending!

Well, I look forward to day 2.