New Delhi, Oct 9: Highlighting the phenomenal contribution being made by Self-Help Groups to achieve financial inclusion, Finance Minister P Chidambaram today made out a case for bringing next profit-making Micro Finance Institutions under the ambit of regulation.
''A Bill has been introduced to regulate non-profit making Micro Finance Institutions (MFIs) under regulation. The government will consider favourably any suggestions for also bringing profit-making MFIs under regulation,'' Mr Chidambaram said inaugurating the Fourth Microfinance India Conference here.
The Finance Minister said just because the attempt has been made to regulate so far the non-profit making MFIs, it does not mean that the proposed legislation lacks credibility.
Mr Chidambaram said bringing the non-profit making institutions under regulation will provide them legitimacy.
In this regard, he said the government will carefully consider for implementation the findings of the Report of the Conference relating to regulation of the sector.
The Finance Minister spoke in glowing terms about the success of the 'Grameen Bank' in Bangladesh and sought the views of the experts on whether that experiment can be emulated in part or in full and with what changes in India.
He attributed the success of the 'Grameen Bank' largely to the contribution of one individual, Nobel Laurete Muhammad Yunus.
Mr Chidambaram said the government will implement the recommendations of the Rangarajan Committee on financial inclusion, after it receives its report.
He was of the view that the Palghat experiment relating to achieving 100 per cent financial inclusion in a district needs to be replicated all over the country.
Mr Chidambaram said Palghat in Kerala was the first district in the country to achieve financial inclusion and since then many other districts have followed suit.
He noted that providing finance to the poor was achieved laregly by the public sector banks and said various sources should contribute to achieving this goal, ''I welcome a multi-pronged, diversified and multi sourced approach to achieving financial inclusion,'' Mr Chidasmbaram said.
In the last few years, the microfinance sector has been growing rapidly by about 40 per cent annually. In addition to the public sector banks, social venture capitalists, new generation micro finance institutions as well as international retail MFIs have been attracted to the sector.
''In our quest to grapple with the growth pangs in the sector, the government is keen on working towards developing the level of microfinance vision in the sector,'' Mr Chidambarm said.
The two-day conference which has brought together 600 experts from India and abroad has its theme 'Formal Financial Institutions and Microfinance -- the challenges of depth and breadth.' The event will focus on the unique success of the Indian microfinance sector in providing financial services to the poor. It will bring to light case studies in this regard.