How micro-finance institutions beat nationalized banks

S A Aiyar Sunday July 26, 2009 In his Budget speech, the FM hailed bank nationalization as visionary and revolutionary. Yet, nationalized banks have, by and large, not reached the poor. However, micro-finance is now reaching people whom nationalized banks could not.

Households getting micro-credit now outnumber poor households. Outstanding micro-finance loans total 80 million. Some borrowers have multiple loans, so net beneficiaries may total 60 million households. This is more than the 55 million poor households, and more than a quarter of India’s 220 million households.

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2 thoughts on “How micro-finance institutions beat nationalized banks”

  1. Hi, I’m Kim, Dohyun. Now, I’m working as a Korea’s financial policy promoter of FinPol, the official English blog the FSC (Financial Services Commission, South Korea). As I read the article, it is very interesting on that issue. Meanwhile, we’ve also dealt with diverse financial issues throughout the official blog, FinPol.

    In this respect, I want to share some ideas each other. If you have a time, I hope you will visit FinPol, (

    Well, thanks for your time and best regards. ^____^

  2. India generally has a pretty well setup banking sector, thanks to the Reserve Bank of India. It is still surprising to see the poor performance of nationalized banks in the area of micro finance and it is probably because they fail to see the opportunity, considering more than 300 million people in India live below the poverty line.

    My blog is about micro finance and I am now following you. Hope to read some great posts in the future. Thanks

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