Articles by Tara S Nair

The pattern of funds fl ow during 2006-10 to self-help groups and microfi nance institutions - the two competing institutional arrangements of microfi nance delivery in India - reveals that the commercial banking system had steadily shifted its patronage to large MFIs from the mid-2000s. Increased access to equity capital helped these MFIs improve their capital adequacy, which, in turn, helped them leverage the domestic debt market. They also resorted to newer ways of raising capital through product structuring and introduction of innovative debt instruments. MFIs thus played a signifi cant role in linking the processes of neo-liberal restructuring and fi nancialisation with the daily lives of local communities.

Working within the logic of maximising investor returns, the strategic focus of Indian microfinance institutions seems to have shifted from serving the poor borrowers to chasing profits. The commercial transformation of MFIs has been accompanied by changes in the structure of ownership, management and nature of their stakeholder commitment. This essay discusses some of the critical inadequacies in the approaches advocated and currently practised by the commercial MFIs in order to restore the sector's focus on poor borrowers.

In India the process of democratisation has been a dominant force in shaping the press. The process has, between the 1960s and the 1990s, seen the movement of politics away from the centre to the states, where negotiations between various class and group interests are most effectively conducted. An important aspect of this transition that saw the rise of dominant local interests has been the changing role of language. This paper attempts to relate the structural transformation of the industry in this period to the large socio economic and political changes.

There has been an increasing tendency to use the term microfinance - seen to be the most effective intervention towards poverty alleviation, to refer solely to formalised institutions - leaving aside a large informal section, that could include individuals and informal associations as well. Current efforts to mainstream microfinance operations in the non-financial sector of the country, while acknowledging the failure of state-owned credit institutions, should also take into account, among others, the programmatic success of several intermediary developmental institutions like the small savings and credit groups that have proved not only profitable but an effective poverty alleviation measure.

While the latest budget makes grand pronouncement about expanding the availability of housing finance, it shows little comprehension of the difficulties of creating and strengthening participatory mechanisms in this area.