Micro finance has great potential, says SBI chief

NEW DELHI - Regulators should take steps to sort out the controversies surrounding micro finance institutions (MFI), as they play an important role in economic growth, State Bank of India (SBI) Chairman O.P. Bhatt said Saturday.

Controversies associated with MFIs should be sorted out. These institutions have immense potential. They have already lent Rs.20,000 crore to a diverse customer portfolio, Bhatt said at a conclave organised by the Indian Institute of Technology alumni group PanIIT.

Such institutions have tremendous potential to take financial inclusion to economic inclusion and beyond, he added.

Bhatt said an effective policy and regulatory framework is imperative towards a dynamic financial inclusion profile, apart from projects like the unique identification project, headed by Nandan Nilekani.

Government should also extend incentives to micro finance agents who put in extra effort in reaching out to customers, he said.

Bhatt, chairman of the country’s largest bank, said the concept of economic inclusion should be the priority of policy framework, as financial inclusion is just a micro determinant for ensuring sustainable livelihood.