Prime Minister’s Economic Advisory Council Chairman C Rangarajan today said the business model of microfinance institutions (MFIs) is faulty and they should charge interest rates, which small borrowers are able to pay.
“The business model of microfinance institutions is faulty. They must revisit the model to support the income earning ability of the borrower,” he said.
Rangarajan said multiple lendings done by the MFIs were inconsistent with the repayment capacity of the borrower.
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