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Microfinance attracts renewed attention after RBI's interest rate cap move

Within months of the RBI lifting the interest rate cap on such loans, the industry is seeing a steady rise in borrowing, especially among women in some of India's poorest districts

Typical microfinance borrowers are families with monthly income of Rs 25,000 or less. (BS Photo)
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Typical microfinance borrowers are families with monthly income of Rs 25,000 or less. (BS Photo)

Subhomoy Bhattacharjee New Delhi
Mamta Devi, a resident of Ranti village in Madhubani, makes a living selling her paintings of the famous art synonymous with the name of the district. This morning she is sitting in a group of 10 women taking out a microfinance loan of Rs 25,000 to finance her work.
 
This is her second loan from the company, having paid off her first one. Mamta Devi, like the hundreds of thousands of women in north Bihar who take these loans, does not understand how interest rates work but knows that, somehow, it matters for the payout. “The first question they ask

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First Published: Jan 23 2023 | 6:21 PM IST

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