Friday, April 29, 2016

Microfinance Institutions in India: Are They Reaching the Poorest of the Poor?

Microfinance institutions (MFIs) are losing the faith of poor and, particularly poor women, as they are progressively heading towards the commercialization of their operations. It is, therefore, immensely important that we measure social and financial efficiency of these institutions and analyse what went wrong with them.

In the News
Does it make sense for microfinance institutions or banks to open a branch to reach out to remote areas? What about the cost? Is technology the answer? What is the right model for financial inclusion in India that delivers value to the customer and manages the portfolio of the lender as well?
Some of the top leaders from the banking and microfinance sector brainstormed on these ideas during a panel discussion on “Inclusive Finance: Last Mile Connectivity is the Key” at the South India Banking Conclave organised byMint in Bengaluru on Friday. Read more
Live Mint, 29 April 2016 
With the increasing commercialization of microfinance, operations debate on sustainability and outreach of MFIs in India is also gaining ground. Financial sustainability approach or institutional approach focuses on the sustainable operation of MFI by charging reasonable rate of interest to cover the costs of lending. This approach emphasizes on increase in revenues from interest income and fee and cutting down the operational cost.


Institutional approach asserts financial sustainability holds the key to serve the large number of poor. On the other hand, the poverty lending or welfarist approach supports loans to the poor at the rate affordable to them. Lending to poor is a relatively costly affair, as they frequently need loan of small amounts. Thus, as per this approach, reaching the poorest of the poor, as better known as the depth of outreach and achieving sustainability goes against to each other.

Efficiency of production units lies in the judicious use of inputs to produce maximum output. Efficiency in microfinance as how well an MFI technically transforms inputs (such as assets, staff and subsidies) to produce the maximum outputs (such as number of loans, financial self-sufficiency and poverty outreach).

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Friday, April 22, 2016

Join hands on Earth Day to make our Earth a better place to live!

How Green are Our Hotels?

Environmental management remains a neglected area in the management of hotels. But it has been seen that hotels in Bangkok are practicing environmental management practices. However, at a point they also do not want to compromise with guest comfort. The idea of Green Leaf is very innovative and the hotels are trying their best to be a part of that.

According to the Tourism Authority of Thailand (TAT), they are ‘going green’, taking its environmental responsibilities seriously and developing a programme to maintain and improve the natural environment by reducing the carbon footprint. They promote the belief that tourism should be developed in a manner that minimizes negative impacts on local communities and negative impact on the environment.

TAT has identified four key Green Initiatives (TAT, 2009):
1. Promoting Thai ‘Green’ tourism by raising awareness of green tourism operators and service providers through the creation of a database of environmentally responsible tourism related businesses.
2. Recognizing, developing and rewarding green tourism role models.
3. Organizing green tourism conferences, meetings and educational seminars.
4. Implementing a ‘Seven Greens’ programme. They are Green Hearts, Green Logistics, Green Attractions, Green Community, Green Activities, Green Services and Green Plus.

Over the years, the number of star hotels has increased in all the cities of Asia. However, there is no exploration on the environmental management practices of these hotels. Though the concept of Ecotel hotel has emerged in India, not many hotels have this hallmark. Baring the few Ecotels in Delhi, Mumbai and other cities like Lonavala, Mahabaleswar, Jaipur and Kollam, others remain indifferent to the idea of being environment friendly. Therefore, there is an urgent need to find out how green our hotels are.

Monday, April 18, 2016

Universal Elementary Education in India: A Reality or Fantasy?

India adopted the National Policy on Education in 1986 marking a landmark moment in the education movement of our country.  Alongside the spirit of the education policy, in 2002, with the 86th Amendment Act, the Constitution of India inserted the provision of free and compulsory education for all children in the age group of 6–14 years as a fundamental right. In order to legislate this provision, the Right to Education (RTE) Act was formulated in 2009, while the Right to Education (RTE) Act has made progress in access to education; the delivery of education has worsened.

An article from Social Change analyses the reasons for this by using two main levers of the system: financial support and accountability. As far as support is concerned, three areas need attention, specifically, the low funding of education when compared with the global average; a mismatch between funds approved, actual funds available and funds spent; and inefficient, delayed and rushed expenditure. In terms of accountability, two main systemic gaps have been explored: accountability at the input level instead of the output level and accountability to funders instead of the community, with an emphasis on teachers’ accountability.

Education Policy was created with a national belief that education was ‘essentially for all’ and emphasised that education was a ‘unique investment’ for the present as well as for the future well-being of a nation. Almost 30 years later, we are still in the process of making this national perception a national reality.

Putting the Inputs in Place and Setting Inputs in Motion are the two essential steps to make ‘educated India’ a reality. Ensuring the accessibility of raw materials for education to the citizens—this would involve ensuring the presence of schools, classrooms, teachers and textbooks. This is the primary step on which the entire process is built. The second step is the one that makes the first step meaningful; over the years, we have been building a vast factory of education in our country, investing time, money, dreams and a lot of intellectual debates into it. Our expected product is an educated India, and we expect all the raw materials, mandated by the RTE Act, to actually churn out quality education. Herein lies the need for the second step. It is not really just one step, but more of a continuous effort of bringing the inputs in motion, making sure they are accessed and used, ensuring their effective and efficient functioning and thereby producing the output that this education factory was built to produce—Universal Elementary Education.


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