Co-authored with Vinod Kothari; MicrofinanceFocus, 6 July 2010
The Reserve Bank of India (RBI) recently promulgated proposed guidelines for securitization by non-banking finance companies that if implemented, would essentially gut the widespread Indian MFI practice of selling (assigning) and securitizing portions of their portfolios. One of us has already described these consequences in detail. Not surprisingly, this proposal caused alarm in the microfinance community and has generated intensive lobbying efforts with the RBI to modify the ruling. As the RBI considers their case, it should bear in mind another distinguishing characteristic that sets microfinance securitizations apart. more →