Micro Finance Sector Development and Regulation Bill : AIDWA demands wider consultations

The Union Government should hold wider consultation with different stakeholders before coming out with the planned Micro Finance Sector Development and Regulation Bill if it should really benefit the women SHG movement, according to All India Democratic Women’s Association general secretary Sudha Sundararaman. Interest cap

“The Bill being formulated now is only beneficial to the private micro financial institutions and is not addressing the demands of women SHG members for a cap on interest levied,” she said.

Ms. Sundararaman was talking to reporters here on the sidelines of the special state conference organised by AIDWA for women SHGs here on Tuesday.

According to her, the Bill should go through process of re-drafting to erase the fundamental flaws in it before got implemented.

On interest ceiling, Ms. Sundararaman said that the government should mention it in the Bill instead of allowing the private micro finance institutions to determine the rates of interest on the credit extended, which could be detrimental to the interests of women.

The interest ceiling fixed should be ‘realistic’ and ‘affordable’ to the women SHG members.

Allocation

She said that it was indeed a pity that the Centre had cut short the allocation towards the corpus created under the head of ‘Rashtriya Mahila Kosh’ (also known as National Credit Fund for Women) for this financial year vis-À-vis last fiscal.

Instead, the Centre should have made more budgetary allocation to help skill development of women and support to market the produces made by women SHG members at remunerative prices.

Criticises practice

She also criticised the practice of certain State Governments of using the SHG to operate fair price shops and anganwadis just to ‘pass the responsibility.’

“If SHG welfare is the real aim, the groups should be given assistance for capital and operational expenditures,” she said.

Ms. Sundararaman wanted the Tamil Nadu Government to take a leaf out of the successfully implemented ‘Kudumbashree’ initiative in Kerala, which credit linked poor households with the banks.

AIDWA state general secretary U. Vasuki was present.

(Courtesy : The Hindu)