Small MFIs in Odisha battle credit crunch

MFI remains one of the costliest models of financial inclusion

Smaller Micro Finance Institutions (MFIs) in Odisha are grappling with capital crunch as credit from banks and financial institutions has tapered. While the larger MFIs across the country are adequately capitalised, the smaller, home-bred institutions in the state have been let down by fund scarcity.

"The state-based smaller MFIs face the scarcity of funds, shortage of skilled staff and a dearth of capital to build a quality team. The increase in recent fraudulent chit cases in the sector have made the situation even worse as new clients very often view MFIs as Ponzi organisations," said Mohammad Amin, secretary, Odisha State Association