Shubho Roy, Renuka Sane, Susan Thomas
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In response to the Second Micro Finance Crisis
in Andhra Pradesh, which took place in October
2010, the Ministry of Finance has pro- posed a new
Micro Finance Institutions (Development &
Regulation) Bill. This paper undertakes a detailed
analysis of the draft Bill in terms of both
economic policy and law. This analysis reveals
many weak links, including: a lack of clarity on
the objectives of the Bill; an insufficient focus
on protection of the rights of the micro-borrower;
lack of clarity about the definition of thrift;
the loss of accountability that comes with
multiple regulatory agencies; concerns about the
rule of law; and constitutional issues about
powers of the Centre versus the State Government. |