Muthoot ties up with Accion of US to boost lending in micro-fin sector
Joe A Scaria, ET Bureau
Economic Times
December 6, 2010

THIRUVANANTHAPURAM: Financial services company Muthoot Fincorp has tied up with US-based ‘not-forprofit’ Accion International to boost its lending in the beleaguered micro-finance sector.

“We see a big opportunity in the MFI sector. In November alone, we added 8,095 customers, taking our total customer base across Kerala, Karnataka and Tamil Nadu to 28,219,” Muthoot Fincorp ED Thomas Muthoot said.

The MFI business is currently operating as a business vertical within Muthoot Fincorp, and the company has plans to make it a full-fledged subsidiary of Muthoot Fincorp when the business volume tops Rs 100 crore, Muthoot said.

In seven months since beginning to lend tiny sums, the company has lent Rs 27 crore, and is targeting Rs 50 crore by the end of this fiscal. Accion International will provide entrepreneurial training for women entrepreneurs in Kerala, Karnataka and Tamil Nadu, said Victoria White, vice-president, Accion International and programme manager for India.

US-based Accion International helps people out of poverty through micro loans, business training and other financial services. Until 2009, Accion had helped build 62 microfinance institutions in 31 countries over four continents, reaching 4.9 million clients.

India’s micro finance industry is in a crisis with banks reluctant to lend to them due to prospects of tight regulations. State governments are limiting the interest rates they charge and prescribing collection mechanism on complaints of usurious interest rates and suicides because of torture from company agents while recovering funds.

There had been issues in the industry in different countries at different times, including in Bolivia and Nicaragua, and that the issues were “less about industry and more about indebtednesss,” said Accion country manager H Siddhartha Chowdri. It was important to make capacity-based assessments of the beneficiaries in order to avoid repayment issues, he said.

Muthoot ties up with Accion of US to boost lending in micro-fin sector
Joe A Scaria, ET Bureau
Economic Times
December 6, 2010

THIRUVANANTHAPURAM: Financial services company Muthoot Fincorp has tied up with US-based ‘not-forprofit’ Accion International to boost its lending in the beleaguered micro-finance sector.

“We see a big opportunity in the MFI sector. In November alone, we added 8,095 customers, taking our total customer base across Kerala, Karnataka and Tamil Nadu to 28,219,” Muthoot Fincorp ED Thomas Muthoot said.

The MFI business is currently operating as a business vertical within Muthoot Fincorp, and the company has plans to make it a full-fledged subsidiary of Muthoot Fincorp when the business volume tops Rs 100 crore, Muthoot said.

In seven months since beginning to lend tiny sums, the company has lent Rs 27 crore, and is targeting Rs 50 crore by the end of this fiscal. Accion International will provide entrepreneurial training for women entrepreneurs in Kerala, Karnataka and Tamil Nadu, said Victoria White, vice-president, Accion International and programme manager for India.

US-based Accion International helps people out of poverty through micro loans, business training and other financial services. Until 2009, Accion had helped build 62 microfinance institutions in 31 countries over four continents, reaching 4.9 million clients.

India’s micro finance industry is in a crisis with banks reluctant to lend to them due to prospects of tight regulations. State governments are limiting the interest rates they charge and prescribing collection mechanism on complaints of usurious interest rates and suicides because of torture from company agents while recovering funds.

There had been issues in the industry in different countries at different times, including in Bolivia and Nicaragua, and that the issues were “less about industry and more about indebtednesss,” said Accion country manager H Siddhartha Chowdri. It was important to make capacity-based assessments of the beneficiaries in order to avoid repayment issues, he said.