MFIs need a separate regulator: Yunus
"It is not about more or less regulation. What your microfinance sector needs is a separate set of regulations because the area they operate in is different from the area of commercial banks and other lending bodies," Yunus told PTI on the sidelines of a CSR summit organised by the Wockhard Foundation here on Saturday.
He was answering the question whether the Indian MFI sector needed more regulation.
Demanding that the MFIs like SKS and others of the ilk, who have turned "loan-sharks" overnight by commercialising, should stop calling themselves microfinanciers, he said that is the best service they can do to the "real micro-lenders".
"If you want to commercialise, please choose a different name, and not micro-financiers. Real microfinanciers are not commercially minded. Ours is not a commercial enterprise but a social business," the professor said.
He further pointed out that "the ultimate objective of MFIs is to ensure financial inclusion and not making profit.
So long as they work towards this objective, they are microfinance companies and when they start looking at profit they become loan-sharks or commercial entities."
To a question whether government should interfere in MFIs, the professor said ad-hoc government intervention and regulations can only harm this much-needed sector.
When sought his opinion on SKS Microfinance controversy, he wondered how its promoter Vikram Akula could change the way he did. Prof Yunus recalled the early years of Akula and said, "He was a nice person when he launched an NGO after visiting many of my social businesses in Bangladesh. He interacted with me many a time in the past."
On some of his recent social businesses, the professor said he had roped in the global foods and dairy goods major Danon to launch Grameen Danon Company to manufacture and sell yogurt to the malnourished kids in his country.
"The motive is to ultimately eradicate malnutrition in Bangladesh," he said, adding that second yogurt plant will be set up by this year and he and Danon want to cover the entire country by setting up 50 such plants.
With the premium footwear and sport goods major Adidas, he has set up Grameen Adidas Company to offer shoes to rural people for under one euro.
The professor noted that both these social business enterprises set up by multinational corporations are doing brisk business.
And so is his solar power business, which within the first few years has sold over 5 lakh home solar sets and has set a target of selling 1 million units by 2020 and 10 million by 2050. The company sells one solar set for 32,000 takas (local currency), and extends financing facility too, Prof Yunus added.