Unlike in rural area where it’s easy to find people with similar social and economic backgrounds -- an important requirement for group formation -- urban settings for microfinance are characterised by people who have migrated from various regions and states of the country.
In fostering a joint liability group (JLG), MFIs want to make sure that all members are comfortable with each other and will stick together for a reasonably long duration of time.
Group formation also requires conducive laws such as mutually-aided cooperative society Act.
Development institutions that earlier helped MFIs develop their lending model have now shifted their agenda to issues like transparency and social performance. ACCESS Development Services intends to take an initiative to ascertain and publish pricing, shareholding and profitability of various MFIs. So the market itself is responding to some of the problems.
Comprehensive economic inclusion, which will integrate finance, livelihoods, legal rights and social security, is a great idea. Currently there is no coordination between various governmental and non-governmental agencies that are working on a wide variety of development themes.