Good and Bad News for Indian Microfinance

It appears that the microfinance sector in India has received a mixed bag of news recently. First, the good news is that investment in the sector continues to appear robust. According to Microcapital.org, the The Michael and Susan Dell Foundation has taken an undisclosed equity stake in “BASIX Sub-K iTransactions Limited, the mobile payments unit of BASIX Group, an Indian entity providing services to poor people including microfinance, health insurance and agricultural and business development services.” In addition to this announcement, Microcapital.org has also reported that the State Bank of India (SBI) plans to increase its microfinance portfolio by 50% during its fiscal 4th quarter. This increase would mean that the bank;s portfolio would grow to 1,400 crore by March of this year.

Not all is rosy, however, as SKS Microfinance has stated that it will continue to downsize its workforce in response to Regulation of Microlending Act, which requires that every loan be approved by the government. These contradictory events suggest an industry still struggling to fully navigate a complex regulatory and economic landscape.