Job boom in micro credit
The micro finance sector is not only helping people get easy credit, it is playing a key role in employment generation as well. In the last three years, it has created about one lakh additional jobs in rural and semi-urban areas.business Updated: Mar 29, 2010 23:52 IST
The micro finance sector is not only helping people get easy credit, it is playing a key role in employment generation as well. In the last three years, it has created about one lakh additional jobs in rural and semi-urban areas.
In the next couple of years, it is likely to create several thousand more jobs, as steps to expand the scope of financial inclusion gain momentum.
“As we try to increase penetration of micro finance institutions (MFIs), many jobs would be created as there would be a strong requirement of additional workforce,” Mathew Titus, executive director, Sa-Dhan — an association of micro finance institutions — told HT.
Finance minister Pranab Mukherjee has underlined the need to aggressively expand the scope of financial inclusion to ensure that the economic growth is sustainable.
“As penetration deepens and the scope of micro credit and financial inclusion expands throughout the country, additional staff would be required and this would help in creating direct jobs,” a government official, who did not wish to be identified, said.
According to a Sa-Dhan report, which was recently released, the poorest of the poor districts are still not adequately covered by the MFIs and this would only create more jobs as micro-lending penetrates deeper into the market.
Though 71 per cent of the poorest districts of the country are covered by MFIs, the penetration in some of these regions is not adequate.
In 2007, only 58 per cent of the poorest areas were covered.
In 2009, there were a total of 180 lakh active borrowers and of these, seven per cent comprised men, the report showed.
The total loan portfolio in 2009 was estimated at Rs 11,734 crore compared to a little over Rs 6,000 crore in 2008, a whopping increase of 95 per cent, the report showed. Currently, about 50 per cent of the rural households are outside the ambit of institutional credit.