Extending access to savings accounts via MFIs

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Ziv on the India Development Blog makes the case:

While having MFIs hold deposits may be too drastic of a change to their business model for now, and it would introduce too much risk too soon, allowing them to offer a basic BC [business correspondent] service is an easy step that would have a large positive impact. As for accountability concerns, banks can use their discretion in selecting MFIs as BCs, working only with those having good track-records on process control. NBFCs are already entrusted with handling a large amount of bank cash through the SHG linkage framework, and misconduct has not emerged as a major interference.

Also see a related post on the PSD Blog about the efforts of the Gates Foundation to solve the microfinance savings riddle.


Ryan Hahn

Operations Officer

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