Microfinance: Balancing Financial Inclusion with Responsible Lending

Microfinance institutions are vital for financial inclusion but should avoid reckless lending practices, warned Financial Services Secretary M Nagaraju. He emphasized the importance of empowering limited financial literacy groups through responsible lending. The SHG-Bank Linkage Programme greatly benefits millions, with a focus on women empowerment through initiatives like the Lakhpati Didi Yojana.

Microfinance institutions have been pivotal in enhancing financial inclusion, but caution against reckless lending is paramount, according to Financial Services Secretary M Nagaraju. Speaking at a Sa-Dhan event, he emphasized the need for careful lending practices.

Emphasizing the need to protect sectors from harmful lending practices, Nagaraju highlighted the importance of empowering borrowers with limited financial literacy. He stressed providing necessary finance and support without capitalizing on their financial limitations.

Nagaraju pointed out that the SHG-Bank Linkage Programme significantly benefits 10 crore poor households, with JLGs complementing these efforts. Initiatives like the Lakhpati Didi Yojana aim to transform women into entrepreneurs, fostering women's empowerment and economic growth.

(With inputs from agencies.)