Lok Sabha Question No. 581 (UNSTARRED), answered on 2016-11-18
Subject: MFIs
Ministry: FINANCE
Asked by: GOWDAR MALLIKARJUNAPPA SIDDESHWARA, E. T. MOHAMMED BASHEER, MALLIKARJUN  KHARGE, M. K. RAGHAVAN

## Govt. of India Ministry of Finance Department of Financial services

## LOK SABHA UNSTARRED QUESTION No. 581

## TO BE ANSWERED ON THE 18 th  November, 2016 / Kartika 27, 1938 (Saka)

## Micro-Finance Institutions

## QUESTION

581. SHRI G.M. SIDDESHWARA: SHRI E.T. MOHAMMED BASHEER: SHRI MALLIKARJUN KHARGE: SHRI M.K. RAGHAVAN

Will the Minister of FINANCE be pleased to state:

- (a) whether micro-finance sector has grown rapidly over the years on account of inadequate banking reach in various parts of the country;
- (b) if  so,  the  details  thereof  along  with the  number of  Micro-Finance Institutions (MFIs) registered with the Reserve Bank of India (RBI) as on date, State/UTwise;
- (c) whether  MFIs  have  reportedly  been  involved  in  charging  of  high  rate  of interest using coercive methods for recovery of loans and other irregularities and if so, the details thereof, including rate of interest allowed to them;
- (d) the  details  of  the  regulatory  framework  put  in  place  by  the  Government  for regulation of MFIs; and
- (e) the measures taken / proposed to be taken for the development of MFIs and also safeguarding the interest of the borrowers?

## ANSWER (MINISTER OF STATE IN THE MINISTRY OF FINANCE) (SHRI SANTOSH KUMAR GANGWAR)

(a)& (b): The number of bank branches in the country has  increased to 1,34,014 in June, 2016 from  60,220 in 1991 indicating improved banking reach in various parts of the country. The Micro Finance Institutions (MFIs) have also grown in the country which  has  further  supplemented  the  financial  services  across  the  country.  As  per Sa-Dhan Bharat Micro Finance Report 2016, number of MFI borrowers increased to 3.60 crore in 2016 from 0.03 crore in 2001. The report also states that the gross loan portfolio  of  MFIs  increased  to  Rs.63,853  crore  in  2016  from  Rs.  65  crore  in  2001. These data indicate the growth of micro finance sector over the years.

There are 71 Non Banking Financial Company-Micro Finance Institutions (NBFC MFIs)  registered  with  Reserve  Bank  of  India's  (RBI)  Regional  offices.  The  list  is attached at Annexure I.

(c): Complaints against NBFC-MFIs only are monitored by RBI. As per information furnished by RBI, a few complaints against NBFC-MFIs have come to notice which have been subsequently redressed.

RBI has advised the NBFC-MFIs that the interest rates charged by it to its borrowers will be the lower of the following:

- i. Cost of funds, plus margin (10%/12% based on size of NBFC-MFI); or
- ii.  The  average  base  rate  of  the  five  largest  commercial  banks  by  assets multiplied by 2.75.

(d) & (e): NBFC-MFIs are regulated by RBI under the provisions of Chapter IIIB of the RBI Act, 1934. RBI has issued regulatory guidelines and Fair Practice Code for these NBFC-MFIs. RBI has given recognition to two Self Regulatory Organisations (SROs). MFIs which are members of these Self Regulatory Organisations (SROs) also adhere to a voluntary industry Code of Conduct.

RBI has issued guidelines to NBFC-MFIs to ensure that a Board approved policy is in place with regard to Code of Conduct by field staff. The Code of Conduct inter-alia covers  recovery  procedures,  consumer  protection  and  grievance  redressal.  In addition MFIs which are members of SROs also adhere to a voluntary industry Code of  Conduct  for  greater  transparency,  grievance  and  dispute  redressal  by  their member MFIs.

Government of India has created 'India Microfinance Equity Fund' (IMEF) of Rs.100 crore with SIDBI with the primary emphasis of providing equity and quasi equity to smaller MFIs to help them maintain growth and achieve scale and efficiency in their operations. A further allocation of Rs.200 crore has been made to the IMEF in the budget  for  FY  2014.  Up  to  September  30,  2016  an  amount  of  Rs.182  crore  has already been committed under IMEF.

*****

## Annexure-I

| List of NBFC-MFIs registered with RBI as on October 15, 2016   | List of NBFC-MFIs registered with RBI as on October 15, 2016   | List of NBFC-MFIs registered with RBI as on October 15, 2016                                                    |
|----------------------------------------------------------------|----------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------|
| Sr. No.                                                        | Regional Office                                                | Company Name                                                                                                    |
| Ahmedabad (Gujarat)                                            | Ahmedabad (Gujarat)                                            | Ahmedabad (Gujarat)                                                                                             |
| 1                                                              | 1                                                              | SHROFF CAPITAL & FINANCE PVT. LTD.                                                                              |
| 2                                                              | 2                                                              | DISHA MICROFIN PRIVATE LIMITED                                                                                  |
| 3                                                              | 3                                                              | NAMRA FINANCE LIMITED                                                                                           |
| 4                                                              | 4                                                              | PAHAL FINANCIAL SERVICES PRIVATE LIMITED                                                                        |
| Bengaluru (Karnataka)                                          | Bengaluru (Karnataka)                                          | Bengaluru (Karnataka)                                                                                           |
| 5                                                              | 1                                                              | RORS FINANCE PRIVATE LIMITED (FORMERLY KNOWN AS PACE FINANCE PRIVATE LIMITED)                                   |
| 6                                                              | 2                                                              | IDF FINANCIAL SERVICES PRIVATE LIMITED                                                                          |
| 7                                                              | 3                                                              | NABARD FINANCIAL SERVICES LIMITED                                                                               |
| 8                                                              | 4                                                              | JANALAKSHMI FINANCIAL SERVICES LIMITED                                                                          |
| 9                                                              | 5                                                              | NAVACHETANA MICROFIN SERVICES PRIVATE LIMITED                                                                   |
| 10                                                             | 6                                                              | BSS MICROFINANCE PRIVATE LTD.                                                                                   |
| 11                                                             | 7                                                              | CHAITANYA INDIA FIN CREDIT PRIVATE LIMITED                                                                      |
| 12                                                             | 8                                                              | UJJIVAN FINANCIAL SERVICES PRIVATE LIMITED                                                                      |
| 13                                                             | 9                                                              | GRAMEEN KOOTA FINANCIAL SERVICES PRIVATE LIMITED (FORMERLY KNOWN AS GRAMEEN FINANCIAL SERVICES PRIVATE LIMITED) |
| 14                                                             | 10                                                             | SAMASTA MICROFINANCE LIMITED                                                                                    |
| 15                                                             | 11                                                             | NIRANTARA FINACCESS (PVT) LIMITED(FORMERLY SHRI SHIVGAYATRI INFIN PVT LTD)                                      |
| 16                                                             | 12                                                             | SHREE MARIKAMBA MICRO FINANCE PRIVATE LIMITED                                                                   |
| 17                                                             | 13                                                             | FUTURE FINANCIAL SERVICESS PRIVATE LIMITED                                                                      |
| Bhubaneswar (Odisha)                                           | Bhubaneswar (Odisha)                                           | Bhubaneswar (Odisha)                                                                                            |
| 18                                                             | 1                                                              | ADHIKAR MICROFINANCE LTD                                                                                        |
| 19                                                             | 2                                                              | SAMBANDH FINSERVE PRIVATE LIMITED                                                                               |
| 20                                                             | 3                                                              | ANNAPURNA MICROFINANCE PRIVATE LTD.                                                                             |
| Chandigarh (UT)                                                | Chandigarh (UT)                                                | Chandigarh (UT)                                                                                                 |
| 21                                                             | 1                                                              | MIDLAND MICROFIN LIMITED (FORMERLY KNOWN AS SAJAN HIRE PURCHASE LIMITED)                                        |
| Chennai (Tamil Nadu)                                           | Chennai (Tamil Nadu)                                           | Chennai (Tamil Nadu)                                                                                            |
| 22                                                             | 1                                                              | REPCO MICRO FINANCE LIMITED                                                                                     |
| 23                                                             | 2                                                              | MADURA MICRO FINANCE LIMITED                                                                                    |
| 24                                                             | 3                                                              | VARAM CAPITAL PRIVATE LIMITED                                                                                   |
| 25                                                             | 4                                                              | BELSTAR INVESTMENT AND FINANCE PRIVATE LIMITED                                                                  |
| 26                                                             | 5                                                              | S.M.I.L.E MICRO FINANCE LIMITED                                                                                 |
| 27                                                             | 6                                                              | MSM MICROFINANCE LIMITED                                                                                        |
| 28                                                             | 7                                                              | ESAF MICROFINANCE AND INVESTMENTS PRIVATE LIMITED                                                               |
| 29                                                             | 8                                                              | GROWING OPPORTUNITY FINANCE(INDIA) PVT LTD                                                                      |
| 30                                                             | 9                                                              | GRAMA VIDIYAL MICRO FINANCE PRIVATE LIMITED                                                                     |
| 31                                                             | 10                                                             | ASIRVAD MICRO FINANCE PRIVATE LIMITED                                                                           |
| 32                                                             | 11                                                             | VIRUTCHAM MICROFINANCE LIMITED                                                                                  |
| 33                                                             | 12                                                             | VIZHUTHUGAL DEVELOPMENT FINANCE PRIVATE LIMITED                                                                 |
| Guwahati (Assam)                                               | Guwahati (Assam)                                               | Guwahati (Assam)                                                                                                |
| 34                                                             | 1                                                              | RGVN (NORTH EAST)MICROFINANCE LTD.                                                                              |
| 35                                                             | 2                                                              | YVU FINANCIAL SERVICES PVT.LTD.(CHAND FAIRDEAL FINANCIERS PVT.LTD.)                                             |
| 36                                                             | 3                                                              | NIGHTINGALE FINVEST PVT. LTD.                                                                                   |

| 37                     | 4                      | GRAMEEN DEVELOPMENT & FINANCE PRIVATE LIMITED                                        |
|------------------------|------------------------|--------------------------------------------------------------------------------------|
| 38                     | 5                      | SATRA DEVELOPMENT FINANCE PRIVATE LIMITED(FORMERLY MULTIPLE FINANCE PRIVATE LIMITED) |
| Hyderabad (Telangana)  | Hyderabad (Telangana)  | Hyderabad (Telangana)                                                                |
| 39                     | 1                      | SHARE MICROFIN LTD                                                                   |
| 40                     | 2                      | ASMITHA MICROFIN LIMITED                                                             |
| 41                     | 3                      | SPANDANA SPHOORTY FINANCIAL LTD.                                                     |
| Jaipur (Rajasthan)     | Jaipur (Rajasthan)     | Jaipur (Rajasthan)                                                                   |
| 42                     | 1                      | DIGAMBER CAPFIN LTD.                                                                 |
| 43                     | 2                      | ARTH MICRO FINANCE (PRIVATE) LTD                                                     |
| Kanpur (Uttar Pradesh) | Kanpur (Uttar Pradesh) | Kanpur (Uttar Pradesh)                                                               |
| 44                     | 1                      | SONATA FINANCE PRIVATE LIMITED                                                       |
| 45                     | 2                      | MARGDARSHAK FINANCIAL SERVICES LIMITED                                               |
| 46                     | 3                      | UTKARSH MICRO FINANCE PVT. LTD.                                                      |
| Kolkata (West Bengal)  | Kolkata (West Bengal)  | Kolkata (West Bengal)                                                                |
| 47                     | 1                      | UNNATI TRADE & FINCON (P) LTD                                                        |
| 48                     | 2                      | VEDIKA CREDIT CAPITAL LIMITED                                                        |
| 49                     | 3                      | AROHAN FINANCIAL SERVICES PRIVATE LIMITED                                            |
| 50                     | 4                      | JAGARAN MICROFIN PRIVATE LIMITED (FORMERLY S B T CONSULTANTS (P) LTD)                |
| 51                     | 5                      | UTTRAYAN FINANCIAL SERVICES PRIVATE LIMITED                                          |
| 52                     | 6                      | VILLAGE FINANCIAL SERVICES PRIVATE LIMITED                                           |
| 53                     | 7                      | BANDHAN FINANCIAL SERVICES PRIVATE LIMITED                                           |
| Mumbai (Maharashtra)   | Mumbai (Maharashtra)   | Mumbai (Maharashtra)                                                                 |
| 54                     | 1                      | UNNATI MICROFIN PRIVATE LIMITED (FORMERLY SHREE OM CREDIT CO. PVT. LTD.)             |
| 55                     | 2                      | MUTHOOT MICROFIN LTD (FORMERLY KNOWN AS PANCHRATNA SECURITIES LIMITED)_MFI           |
| 56                     | 3                      | ANIK FINANCIAL SERVICES PVT. LTD.                                                    |
| 57                     | 4                      | INTREPID FINANCE & LEASING PVT. LTD.                                                 |
| 58                     | 5                      | HINDUSTHAN MICROFINANCE PVT. LTD.                                                    |
| 59                     | 6                      | MPOWER MICRO FINANCE PVT. LTD.                                                       |
| 60                     | 7                      | SVATANTRA MICROFIN PRIVATE LIMITED                                                   |
| 61                     | 8                      | AGORA MICROFINANCE INDIA LTD.(FORMERLY JAGDHAN FINANCE AND INVESTMENTS LIMITED)      |
| 62                     | 9                      | BHARAT FINANCIAL INCLUSION LIMITED( FORMERLY SKS MICROFINANCE LIMITED)               |
| 63                     | 10                     | SAHAYOG MICROFINANCE LIMITED                                                         |
| 64                     | 11                     | SURYODAY MICRO FINANCE LIMITED                                                       |
| New Delhi (UT)         | New Delhi (UT)         | New Delhi (UT)                                                                       |
| 65                     | 1                      | SHIKHAR MICROFINANACAE PRIVATE LIMITED(FORMERLY- ANUP LEASING PVT. LTD,)             |
| 66                     | 2                      | SAIJA FINANCE PRIVATE LIMITED                                                        |
| 67                     | 3                      | S.V.CREDITLINE PRIVATE LIMITED                                                       |
| 68                     | 4                      | SATIN CREDITCARE NETWORK LTD                                                         |
| 69                     | 5                      | LIGHT MICRO FINANCE PRIVATE LIMITED                                                  |
| 70                     | 6                      | FUSION MICROFINANCE PRIVATE LIMITED                                                  |
| 71                     | 7                      | ALTURA FINANCIAL SERVICES LIMITED                                                    |