Explain the term ‘microfinance.’ How will the new microfinance regulations announced by the RBI make the sector stronger?
Answer: Microfinance is a form of financial service which provides small loans and other financial services to poor and low-income households. It is an economic tool designed to promote financial inclusion.
RBI released following guidelines for microfinance institutions (MFIs):
- RBI has set a common household limit of Rs. 300,000 for loans to qualify as microfinance.
- For entities to qualify for an NBFC-MFI licence, they should have at least 75% of assets in microfinance.
- The cap on NBFCs increased to 25% of assets as against 10% earlier.
- Maximum possible indebtedness per borrower increased to Rs 240,000.
- 10% spread cap that was applicable to ....
Do You Want to Read More?
Subscribe Now
To get access to detailed content
Already a Member? Login here
Take Annual Subscription and get the following Advantage
The annual members of the Civil Services Chronicle can read the monthly content of the magazine as well as the Chronicle magazine archives.
Readers can study all the material since 2018 of the Civil Services Chronicle monthly issue in the form of Chronicle magazine archives.
General Studies Mains Questions And Answers
- 1 Digital transformation holds immense potential for bringing about rapid socio-economic development of rural India. Discuss.
- 2 Discuss the contribution of moderates in the Indian freedom movement by describing the various methods adopted by them.
- 3 Give an account of the evolution of the relationship between the British power and the Indian princely states during the British rule, mentioning the key developments.
- 4 Describing the importance of big dams in India, throw light on the problems associated with them. Discuss the efforts made for dam safety in the country.
- 5 Urbanization is a double-edged sword for women. Discuss the challenges faced by women in cities and describe the measures to overcome them.
- 6 What is the Model Code of Conduct? Describe the importance and challenges of Model Code of Conduct.
- 7 Discuss the functions and role of the Election Commission of India. How does the Election Commission ensure free and fair elections in India?
- 8 BIMSTEC is an important organization to strengthen India's position in South-East Asia. Mention the major obstacles to the integration of BIMSTEC.
- 9 India and the US have agreed to move forward in the field of space cooperation. Discuss the limiting factors in the path of space cooperation between the two countries and suggest ways to solve them.
- 10 The Nuclear Non-Proliferation Treaty is considered important to prevent the spread of nuclear weapons; yet India is opposed to this treaty. Explain.
