‘MFIs freed 9 mn households from poverty’

Microfinance institutions have helped households by offering credit to them,says a report.

Microfinance institutions (MFIs) have helped as many as 9 million households come out of poverty in the last two decades in India by offering credit to them,says a report.

Nearly 9 million Indian households,or about 45 million family members,involved in micro finance,saw their daily income rise above the threshold of USD 1.25 between 1990 and 2010,according to a report released by Micro-credit Summit Campaign.

The campaign is a programme of the American advocacy group Results Educational Fund.

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“(The survey) found that a dramatic number of families move out of poverty between 1990 and 2010,” according to a statement distributed by ASIANET.

“Nearly 9 million Indian households involved in micro finance rose above the USD 1.25 a day threshold between 1990 and 2010,” it added.

The survey was conducted on more than 15,000 households and was concluded before the crisis in Andhra Pradesh faced by the micro finance industry.

The report,the release said,comes in the wake of a successful Initial public offer (IPO) by India’s SKS Microfinance in 2010.

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“SKS did micro finance and low income households a major disservice… Multiple lending was inevitable and over-indebtedness followed,” MicroCredit Ratings International Ltd Managing Director Sanjay Sinha said.

Further,IDF Lead Researcher Shubhashis Gangopadhyay said,”…it is clear that changes are needed in Indian micro finance…Families in rural communities need access to financial services from micro finance institutions that know their clients and are committed to improvements in their lives”.