Sa-dhan seeks new MFI refinance body, calls for more equity support

Sa-dhan has urged the government to set up a dedicated MFI refinance body and increase flexibility in the India Microfinance Equity Fund to address funding challenges in the microfinance sector

Sa-dhan, the self-regulatory organisation for microfinance institutions (MFIs), has sought the setting up of a new refinancing body and greater flexibility in the India Microfinance Equity Fund (IMEF).

 

“We have sought a deepening of the current funding architecture available to the sector. As on date, we are dependent on banks for our funding needs, and equity is not easily available,” said a senior Sa-dhan official.

 

As on date, the Micro Units Development and Refinance Agency Bank (MUDRA Bank) lends at low interest rates to MFIs and non-banking financial institutions (NBFCs), which, in turn, finance small businesses. A suggestion has been