Gauging household income key for microfinance clients
he microfinance movement in India is set to receive another dose of impetus with the Reserve Bank of India’s (RBI) recently released Consultative Document on Regulation of Microfinance in June 2021. Following the Malegam Committee Report, which is a decade old now, the current document looks to reassess and realign the priorities of the sector.
A Potential Regulatory Approach to Creditworthiness Assessments in Microfinance
In this post, we revisit the issue of over-indebtedness in microfinance and provide a set of suggestions to address them
A Framework for Detecting Over-indebtedness and Monitoring Indian Credit Markets
Excessive debt negatively affects households and can diminish any developmental gains from such debt. It also dampens a nation’s economic growth and threatens its financial stability.
Assam Crisis Brings to Fore Protracted Regulatory Issues in Tackling Borrower Debt Stress
Reports of growing debt stress among microfinance borrowers in Assam follows a similar path as those in AP. In this post we analysis this issue and provide possible solutions
Detecting Over-Indebtedness while Monitoring Credit Markets in India: An Approach
In this report we propose Monitoring and Detection Framework for OID with twin outcomes in mind, that of financial stability and financial consumer protection
Must the Most Vulnerable Bear the Highest Costs? The Case of Interest on Interest during the Debt Moratorium
In this post, we investigate the cost of Interest on Interest (IoI), that emerged out of the RBI’s policy to grant a 6-month debt moratorium
Needed, a modern personal insolvency regime
Personal insolvency needs to be treated as a social insurance option. A mechanism which relies on the interaction between creditors and borrowers must be put in place
A novel way for MSMEs to lower their risk profile and access funds
This problem can be solved by link-ups with large supply chains and networks that disperse risk and place small businesses in a better position to get loans and attract equity investors.
Estimating Eligibility for the Fresh Start Mechanism under IBC, 2016
The provisions for insolvency, bankruptcy and fresh start for natural persons as contained in the Insolvency and Bankruptcy Code (IBC) 2016 are expected to shift the paradigm of the Indian consumer credit market.
Let’s stop kicking the can down the road: Highlighting important and unaddressed gaps in microcredit regulations
Three issues that the RBI must prioritize as it seeks to revise MFI regulations. While the prescriptive nature of these regulations has helped by setting in place core systems, processes and an overall structure towards better compliance, there is a growing concern over the capability of the current regime to effectively protect borrowers from over-indebtedness.