Cabinet nod to controversial Micro-finance Bill

New Delhi, Feb 22 (UNI) The Union Cabinet today approved the introduction in Parliament of the micro-finance Bill, aimed at facilitating the flow of micro financial services to the un-banked population of the country.

The legislation on the Micro Financial Sector (Development and Regulation) will provide a legal framework for the entities engaged in micro-finance and facilitate an environment for development of such services in the country with greater transparency, effective management and better governance, Information and Broadcasting Minister Priya Ranjan Dasmunsi told reporters after the Cabinet meeting.

The enactment of the legislation is subject to amendments of drafting or of a consequential nature, if any, in consultation with the legislative department.

Women and Child Development Minister Renuka Chowdhury has reportedly expressed concern to Prime Minister Manmohan Singh over the adverse impact the proposed Bill would have on women and the marginalised section in society.

At the group of ministers (GoM), Ms Chowdhury had voiced concern over the high interest rates that unorganised groups such as women and minorities would be forced to pay if the Bill was passed.

According to sources, the Ministry had recommended a cap on the rate of interest charged by micro-finance institutions that handle the bulk of micro-finance activity.

UNI