Commercial banks have not done enough in extending small credit to needy borrowers in the country, Naina Lal Kidwai, chief executive officer, HSBC India said on Monday.
“Banks have done a lousy job of financial inclusion. About 60 per cent of the population in the country does not have a bank account. Microfinance institutions have filled up that gap,” Kidwai said at the inaugural session of the Microfinance India Summit here.
At the end of March 2009, microfinance constituted 1.29 per cent of the gross credit of scheduled commercial banks, an increase of only 0.27 per cent over the previous year.
Microfinance institutions added 8.5 million customers and Rs 5,780 crore to outstanding loans in 2008-09. Princess Maxima of Netherlands, who is United Nation secretary-general’s special advocate on inclusive finance for development, said the microfinance sector has seen a good growth in India.
She hopes that microfinance institutions all over the world would keep the interest rates reasonable to take credit to the unbanked sector.
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