We feature in this section our editorial columns that have been published in leading dailies.

Despite the best efforts by policy makers and state-owned banks, the last mile problem has been an insurmountable hurdle in the way of financial inclusion for the poor.
This single requirement was potentially a barrier for millions of migrant workers.
In this livemint article Bindu writes about Suitability being a shift to “seller be sure” from “buyer beware”; deriving from the KGFS experience on the ground.
There has been much discussion recently about the distorting nature of various indirect subsidies such as those being offered via price controls on fuel and fertiliser. There is a case to include in this important debate the subsidies implied via financial sector policies, in particular, priority sector lending (PSL) requirements that guide the allocation of 40% of net bank credit (NBC). One of the significant bottlenecks to the growth of the Indian economy has been the small size of the financial sector.
Future financial services providers will be akin to general physicians, who bear great responsibility for the health of their patients. Such a prescriptive approach would minimise instances of unsuitable advice.
Small enterprises are hit by poor access to funds. This can be overcome if financial institutions are able to assess firm-specific and general risks, and offer innovative products.
The burden of choosing the right product should shift from the user to the provider, who ought to equip a household with the right tools to enable informed decision-making.
If local revenue generation improves, it would widen the options to finance infrastructure. To tap the bond market, gram panchayats will require credit rating, which, in turn, would be determined by quality of administration.
Innovations in trading and finance need to benefit small farmers in particular. Warehouse-receipt financing and the introduction of options trading can help in this regard.
Low-income households need financial products that allow them to make frequent, low-value transactions. Transaction-size barriers should be as low as possible by reducing cost of service delivery.
Apart from investment products that help them achieve medium to long-term goals, low-income investors need advisors who can highlight the risks to their portfolio.
Financial inclusion is as much about convenient channels of delivery as it is about appropriate products.

Managing Risks in Microfinance

– February 2011

MFI operations, which involve under-writing by client groups and dealing in large amounts of cash outside branch locations, create specific risk management needs. MFI boards, lenders and investors should be cognisant of these.

Big concerns over small loans

– November 2010

Microfinance is an effective tool for financial inclusion. Bindu Ananth and Nachiket Mor talk about some elements of the recently embattled sector.
Bindu Ananth and Nachiket Mor talk about how financial products can address income fluctuations, protect savings from inflation, and provide support against economic shocks in IFMR’s fornightly column in the Hindu Business Line.