This article was written after attending the hearing where Amicus Harish Salve suggested that the Supreme Court direct the Centre to set up one or more statutory authorities to ensure the country’s forest policy is implemented “in letter and spirit”.
If Mr Salve’s suggestion is accepted by the bench, it would represent nothing less than the apex court returning administrative power over forests to the executive. Fourteen years ago, unhappy with how states and centre were managing forests, the apex court had stepped in. Over the past few weeks, the forest bench, comprising Chief Justice SH Kapadia and Justices Aftab Alam and K S Radhakrishnan, has been rethinking its role.
More details, here.
The Microfinance Institutions Network (MFIN), a self-regulatory body of a clutch of 44 NBFC MFIs, has asked for Rs 1,000 crore in the form of business continuity facility, an euphemism for emergency money, to ensure survival. In an email to fellow MFIN members, Vijay Mahajan, the president of the NBFC-MFI association, said the loan has been sought from SIDBI, SBI , ICICI and other major banks.“This will be used for tiding over liquidity crisis for any MFI, to obviate default, as well as to permit token disbursements in non-AP states, so that recoveries continue there,” the email, a copy of which is with ET, said.
MFIs come under pressure after the Andhra Pradesh government issued an ordinance last month to regulate the industry’s money lending operations. The complete story, here.
a few months ago, papers and tv channels in andhra pradesh began reporting that women who had taken loans from microfinance companies were killing themselves. after 2005-06, when there had been similar reports of suicides amongst MFI borrowers back in 2005-06 (see this), this was the second such outbreak.
the whole thing was surprising. while media reports were blaming multiple borrowings and rising indebtedness, both have been around in the state for a while now. For instance, the 2009 State of the Sector report for microfinance had pegged the penetration of microfinance loans among poor households in the state at an astounding 823%. So, why this sudden rash of suicides and the distress they suggest? Had some tipping point been reached? Or was there some external shock?
In my chats with the borrowers and others, I found that the immediate trigger seemed to be a slowdown in labour markets — heavy rains hurt agri employment, NREGA (a national rural employment scheme) employment was hit due to a Central government missive that resulted in Andhra capping NREGA at 100 days, etc. But also that the crisis itself is not wholly of the MFIs’ making. What Andhra has is a wider failure in credit delivery (leave alone financial inclusion), and both Serp and the banks are to blame as well. Essentially, the banks lent far less than what the groups were entitled to, the MFIs proliferated, this explosion in credit delivery resulted in a fraying of relations amongst village women, and some women, given no support for livelihood building, resorted to NREGA to keep up with repayments. When NREGA was capped, and labour markets slowed overall, matters spilled out of control.
This, of course, is journalistic research. Anecdotal in parts and nowhere as detailed a scrutiny as is needed. We urgently need to understand, I think, both the linkages between labour markets and MFIs, and the impact of microfinance on the women — as anti-caste writer Kancha Illiah says in the story, rural communities are changing in ways that we have not grasped yet.
Anyway, the full story here. Take a look.