Asia Microfinance Forum 2010 concludes in Sri Lanka

Microfinance Focus, Oct 15, 2010: The Asia Microfinance Forum 2010 which gathered more than 450 experts from over 50 countries was concluded today in Colombo, Sri Lanka.  Convened by the Banking With the Poor Network (BWTP) and organised by the Foundation for Development Cooperation (FDC), the three day forum brought together industry experts to brainstorm on the role of microfinance in achieving financial inclusion in Asia.

Over the three days period, experts discussed and debated over major issues facing the industry including financial inclusion, portfolio risk management, social performance, regulatory framework, financial literacy, human resource, client protection and investment landscape among others.

Giving away his concluding remark, Mr. Craig Wilson, Executive Director FDC (The Foundation for Development Corporation) thanked all the participants saying, “Over the last three days many interesting ideas and views have emerged and it was a great learning experience for all of us. I hope that we have done justice to all the issues that we discussed and I am happy that today we have the opportunity to come together and set the agenda for achieving Asia’s financial inclusion potential”.

Giving audience food for thought Mr. Rolando Victoria, Executive Director of ASKI, said, “We have talked of all sorts of crisis but maybe we are facing a crisis of values. It is time for us to rethink how to balance profitability and sustainability. At the same time we need to support each other and our networks and address the issues to  bring world transformation with the poor”.

Chandula Abeywickrema, Chairman, BWTP Network said, “In the last few days of discussion we have identified that microfinance industry is an evolving industry and it is in need of evolving regulations. We should learn from history and create our own history.  We are representing 2 billion people who are at the bottom of the pyramid in Asia and I hope that the last three days will leave certain things for us to do. Our proactive decisions will determine the destiny of these 2 billion people”.

Suggesting the gathering that microfinance needs to slow down its growth to rethink about strategies and engage with regulators and policy makers, Mr. Sanjay Sinha,  Managing Director of M-CRIL said, “We are so busy chasing money in order to grow fast that we are not able to take care of policies and regulations”

“Somehow microfinance has come to an age where it is over achieving and the growth is running beyond the level it ought to be.  Giving M-CRIL India Indices of microfinance he said, “India is experiencing exponential growth and doubling almost every year. Similarly the growth is more than 5 times the size it was 6 years ago for the entire Asian region” he said.

However he pointed out that there is a significant upsurge in problems due to lack of internal controls and also because of huge monolithic organizations. In his opinion, MFIs are offering loans that are too small. “When you give a loan which is not sufficient for meeting the need of  poor they take multiple loans and you start to have repayment problems which is causing the problems in Andhra today, the centre of Indian microfinance”, he said.  

He emphasized on offering right products to the clients based on their needs and added, “Instead of chasing commercial capital we should be chasing regulators to be allowed to accept deposits and serve the needs better”.

“In perfect competition what you expect is to see some organizations going bust. All these lessons that we have discussed during the forum will not be learnt by any regulator until few MFIs go bust. It is only a young industry and maybe few MFIs will collapse and will make us understand things”, he remarked.

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