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Submitted by Ashim on
I believe that we need to analyse the whole issue from the perspective of the State, Market and Third sector. Microfinance today is a culmination of these three dimensions. Initially it was started as a developmental intervention, when both State and Market interventions were found to be inadequate to provide finance to the poor. But three decaded of effort to provide financial services to the poor has built a robust model, and it is now being considered as more of a financial asset class. This has attracted the attention of Market and State, which could see an opportunity to reach the poor and make an impact. I believe that everyone of us (Be it State, Market and Third Sector) has a pivotal role to play here, though the orientation may be different. Certain elements of cost(technology, infrastructure) which may have an impact on profitablity of MFI, could be absorved by both Markets and State, while the third sector could focus more on reaching the poorest segment of population. MFIs can provide a whole gamut of services to the poor, only when they could do so on sustainable basis ( though regular profit). But profitablity not at the cost of increasing burden on the poor.