India: Plea to redraft micro finance bill
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New Delhi, March, 07 2007 - Women's groups have asked the Centre to withhold the tabling of the Micro Finance Sector Development and Regulation Bill, 2007 (earlier known as NABARD Bill) slated to be tabled in the current session of Parliament.
The bill needs to go through a process of re-drafting after thorough consultation with all organisations, groups, activists, academics and experts working in the field so that the full implication and impact of it can be assessed from the point of view of the people that it will affect, they said in a memorandum to the Union Finance Minister.
The bill in its present form has certain fundamental flaws, which will put micro finance organisations (mostly comprising women's self-help groups) at the mercy of big corporate players in the sector. The exemption of micro financing institutions, non-banking financial organisations and non-profit Section 25 companies in the sector from the scope of regulation is unacceptable since the institutions are instrumental in channelling the savings of the poor into the hands of big players, the memorandum said.
Further, the whole issue of high interest rates charged by the micro finance institutions has also been left unaddressed. At present, the bill states that the market should determine the rates of interest and that no ceiling has been placed on how much interest can be charged. This is extremely detrimental to the interests of women.
Finally, the bill proposes NABARD rather than an independent body as the nodal authority without giving the federation of micro finance organisations any representation in the regulatory body.
The signatories are: All-India Democratic Women's Association, All-India Women's Conference, All-India Federation of Anganwadi Workers and Helpers Association, Centre for Women's Development Studies, FORCES, Guild of Services, Joint Women's Programme, Muslim Women's Forum, National Federation of Indian Women, Nirantar, All-India Coordination Committee of Working Women and Young Women's Christian Association.