The contents of this circular are not new, but I had hoped that the final rules would clarify the following questions.

As they stand, the rules merely offer room for evasion and uncertainty; lawyers and ill-intentioned people thrive on uncertainty, but honest institutions and above all needy clients do not.

1. How can an MFI know what a household's income or it's indebtedness is ? Many households themselves don't know, here in UK and in Indian slums and villages too.

2. Money is fungible; hence how can a lender be sure as to the purpose to which his (or her) loans will be put ?

3. Multiple membership of SHGs; this is normal in AP, common elsewhere, and perhaps regrettable, but how and by when are people expected to extricate themselves from SHGs, how are their SHGs to cope with members' departures ?

Malcolm Harper