The Microfinance Institutions Network is an association for the

microfinance Microfinance is a category of financial services targeting individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings ...

sector in

India India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...

Business model

The Microfinance Institutions Network was created to promote

. The network promotes responsible lending, client protection, good governance and a supportive regulatory environment. It was established in October 2009 as a society under the Andhra Pradesh Societies Registration Act 2001. According to its bylaws, all non-banking finance companies registered with the

Reserve Bank of India The Reserve Bank of India, chiefly known as RBI, is India's central bank and regulatory body responsible for regulation of the Indian banking system. It is under the ownership of Ministry of Finance, Government of India. It is responsible for ...

are eligible for membership in the society. The Reserve Bank of India accorded recognition to the network via a letter dated 16 June 2014. The Microfinance Institutions Network works actively with regulators and other key stakeholders. The Microfinance Institutions Network is organized into four verticals: self-regulation, advocacy and development, communications and marketing, and state initiatives. The self-regulatory function was part of the Reserve Bank of India's remit to the network to help supervise compliance on behalf of the regulator. Microfinance Institutions Network's internal

whistle-blowing A whistleblower (also written as whistle-blower or whistle blower) is a person, often an employee, who reveals information about activity within a private or public organization that is deemed illegal, immoral, illicit, unsafe or fraudulent. Whi ...

mechanism tries not to charge beyond rates suggested by the Reserve Bank of India from its member microfinance institutions. The Reserve Bank of India has set a cap on the lending rate of microfinance institutions at 26 per cent per year and a margin cap of 12 per cent over their cost of funds. Currently, the network member organizations consist of 55 of the leading non-banking financial companies and microfinance institutions, whose combined businesses constitute over 90% of the Indian microfinance sector, excluding SHGs.

Database of borrowers

The network tries to validate lending money beyond the client's (

borrower A debtor or debitor is a legal entity (legal person) that owes a debt to another entity. The entity may be an individual, a firm, a government, a company or other legal person. The counterparty is called a creditor. When the counterpart of this ...

) capability to pay back by finding the existing borrowings of the client through dedicated microfinance credit bureaus.http://www.highmark.in Only two microfinance institutions can lend to one borrower, and together, they cannot provide loans beyond ₹100,000. The network has facilitated setting up a database of the borrowers, which confirms the necessary validation. The database consists of over 30 million microborrowers and about 60 million loan accounts. When a person applies for the loan, the network checks for the loan history and verifies the Reserve Bank of India benchmark with the

credit report :''This article deals with the general concept of the term credit history. For detailed information about the same topic in the United States, see Credit score in the United States.'' A credit history is a record of a borrower's responsible repay ...

s. The

credit reports :''This article deals with the general concept of the term credit history. For detailed information about the same topic in the United States, see Credit score in the United States.'' A credit history is a record of a borrower's responsible repay ...

are around 80–90% accurate.

References

External links

Official siteMember List
{{Authority control Microfinance organizations Financial services companies of India