Following a cabinet decision last August, 45,139 women beneficiaries from 12 districts were selected through microfinance companies – not from a grassroots-level process – to have their loans written off. 1.2 billion in write-off capital for some 37 microfinance companies to whom the nominated women were indebted, with the institutions agreeing to bear Rs. Treasury stated in a circular it would reimburse the microfinance companies for the loss incurred due to writing off capital. Even after the Microfinance Act was passed in 2016, making it mandatory for microfinance institutions to register with the Central Bank, none of the unregistered companies have registered to date. The Central Bank, the apex institution in the financial sector, admitted it did not carry out any regulatory or supervisory action against unregistered microfinance companies operating in the country.
Source: Sunday Times June 15, 2019 19:06 UTC