Assocham wants strong capital base for MFIs

The Associated Chambers of Commerce and Industry of India (Assocham) has said the minimum capital requirement for setting up a micro finance institution (MFI) should be Rs 25 lakh and not Rs 5 lakh as proposed in the draft Micro Finance Institutions (Development and Regulation) Bill 2011.

This apart, the microfinance institutions should be backed with a strong technology intervention for adequate reporting, supervision and regulation, Assocham secretary general, DS Rawat, told mediapersons here on Wednesday.

According to Rawat, Assocham wanted the minimum capital requirement to be raised so as to discourage weaker and smaller players. He was expecting that the draft Bill would be adopted by Parliament during the winter session.

Replying to a question Rawat, however, disclosed that no microfinance institution has become a member of Assocham so far. Nevertheless, the industry body wanted the Reserve Bank of India to spell out minimum bench marks for healthy growth of microfinance institutions so that flow of funds from banks would increase substantially.