Loading ...Microfinance firms may see better fund flow
The Budget 2011 has proposed to set up a Rs.10 crore equity fund for the microfinance sector, which has witnessed turbulence in the past few months. The India Microfinance Equity Fund will be administered by the Small Industries Development Bank of India (SIDBI).
The budget for 2011/12, which was tabled in parliament on Monday, also sought to allocate Rs 500 crore to SIDBI to refinance commercial banks’ lending to micro, small and medium enterprises (MSMEs). This move is also expected to benefit microfinance institutions (MFIs) as they fund micro enterprises.
The proposals are expected to help channel much-needed bank funds to MFIs, which have been witnessing a severe cash crunch ever since the Andhra Pradesh Microfinance Institutions Act came into effect.
Terming MFIs “an important means of financial inclusion,” Finance Minister Pranab Mukherjee also proposed a Rs.50 crore fund to promote women’s self-help groups.
Tags:
Budget 2011, India Microfinance Equity Fund, MFI, microfinance, Pranab Mukherjee, self-help groups, SIDBI, Small Industries Development Bank of India
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