Days 55-62 March End Break

I had taken all of the last week as a a break from the Shodh Yatra, to be in Delhi, Mumbai and  Hyderabad, to attend to work related to “year closing” since the fiscal year ends on March 31.

As it is, all along the Shodh Yatra, in the months of February and March, I had to spend a fair amount of time on the mobile phone and on e-mail, to attend to the microfinance crisis, in my capacity as MFIN President.  During this period, we had formulated our written response to the Malegam Committee’s recommendations on a new regulatory framework for microfinance institutions and submitted those to the Reserve Bank of India  (RBI).

In response, the RBI had called a meeting in Mumbai on March 24.  As MFIN President, I presented the view of the 45 NBFC MFI members of MFIN to  the RBI Deputy Governors, Dr KC Chakrabarty and Smt Shyamala Goipnath.  Later. on Mar 28  we met Mr Malegam  and Dr KC Chakrabarty in two different meetings.

We urged them to notify quickly, whatever  of the Malegam recommendations the RBI accepts, and implored them to give MFIs some time to adapt to the new regime  I also met the CEOs of several banks, giving them an update on the ground situation and urging them to start lending to MFIs who have little or no exposure in AP.  On the whole the meetings were positive but one has to wait with baited breath as to what comes.

The Finance Minister at an ASSOCHAM Roundtable in Mumbai on March 27

I also had the opportunity to attend a policy round table in Mumbai with the Finance Minister, organised by ASSOCHAM. Could not really get through to him due to  there being so many people. But if I had his ear, here is what I would have said.  Here is a video link to a statement on this issue at an important policy forum.

But what bothered me was that no one was willing  to address the main issue, that of widespread default persisting in AP, which has already jeopardized MFI (and thus bank) loans worth Rs 10,000 crore (USD 2.2 billion). More importantly, the damage to credit discipline that has been caused by over 10 million low-income households being encouraged to default, will lead to any sensible lenders turning away from this segment and in the end, it will make access to credit more difficult and costlier to the poor, which is exactly opposite of the intent of the AP Government.The media highlighted my views as follows:

On a despairing evening when I wrote a mail to my son, he composed a poem and sent it to me. This has restored my resolve to fight anyone fomenting mass default. Here it is

Chale Chalo – Poem by Chirag Mahajan


About vijaymahajan

Educated at St XaviersSchool, Jaipur; IIT Delhi; IIM Ahmedabad and Woodrow Wilson School, Princeton University, USA; Co-founder of several development organisations - BASIX (, PRADAN (, Development Finance Forum (, Andhra Pradesh Mahila Abhivruddhi Society (, Sa-Dhan ( and the Microfinance Institutions Networrk ( Chair of CGAP Excom; BASIX Boards; DSC Board; Board member of MSSRF, ASSEFA, Gram Vikas Honours - WEF Davos Schwab Social Entrepreneur; Ashoka Global Fellow; IIT Delhi Distinguished Alumni Award; HSBC-Access Award for Outstanding Contribution to Microfinance in India; listed among India's top 50 most powerful people in India by BusinessWeek, Asia edition, 2010 Married to Savita, Deputy Dean, ISB, Hyderabad; two children, Chirag and Chandni
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One Response to Days 55-62 March End Break

  1. pradeep kumar mahajan says:

    I am not wlking with u but i am still watching u there are several yatri in this country but u r different from all. Chirag has also become so big that he has also started walking with u. Take care of ur health because this nation needs many more like u.

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