'Microfinance to benefit 48 mn households'

Current demand for microfinance is over Rs 2.4 lakh crore.

Around 48 million households are expected to avail micro credit in the next four years from the current 8 million. Currently, there is a mismatch in terms of demand and supply of credit, according to experts.

The current demand for microfinance is over Rs 2.4 lakh crore, whereas banks and other financial institutions are lending to the tune of around Rs 20,000 crore, said PN Vasudevan, managing director, Equitas Micro Finance India.

Speaking on the sidelines of a management summit organised by Anna University here on Tuesday, he said the microfinance industry at present was bigger than the automobile industry in terms of value.

However, there was a big gap between the supply and demand, which was resulting in institutions charging higher interest rate while offering poor services.

Experts, however, agreed that as more people enter this industry the mindset will gradually change.

National Bank for Agriculture and Rural Development (Nabard)’s deputy general manager Mythili Babu said that data availability was a great challenge for the industry and others include splitting of the group by institutions including NGOs and microfinance institutions.