Categories: Business

MFI should get permission to deposit public money in India, Nobel laureate Muhammad Yunus demands

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MFIs in India should be allowed to accept deposits from public, says Yunus

Kolkata. Nobel laureate economist Muhammad Yunus said that micro finance institutions (MFIs) in India should be allowed to accept deposits from the public. He said in the PanIIT Global e-conclave that at this time MFIs have to go to banks for funds. Younus, the founder of Bangladesh-based Grameen Bank, said on Sunday evening that my appeal to the Indian government was that MFIs should be allowed to accept deposits from the public. Right now they go to banks for money.

He said the Reserve Bank of India (RBI) has given permission to open small finance banks, which are capable of accepting deposits. Significantly, many MFIs like Ujjivan and Jana have transformed themselves into small finance banks after getting license from RBI. He said that finance is the economic oxygen for the people. The banking system is not keen on lending money to the poor, so an alternative banking channel has to be developed for them.

MFIs are not allowed to accept deposits at this time. In such a situation the cost of money becomes higher for the beneficiaries as they borrow money from banks. Yunus said that the MFI sector should be defined as a social business. He also emphasized on the creation of organizations that work without profit. Yunus was awarded the Nobel Prize in 2006 for his work in the field of micro finance.

This post was published on July 20, 2020 1:34 pm

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