MFIs need to rebuild credibility and  confidence to achieve sustainable growth: Study

KOLKATA, Nov 15: Microfinance institutions (MFIs) need to rebuild credibility and confidence to achieve sustainable growth, a joint study by consultancy firm PwC and Sa-Dan, a self-regulatory organisation (SRO) of the sector, said. Microfinance, which is principally underpinned by trust among the stakeholders, who are the borrowers, field officers and lending institutions, has become more transactional, the study said. Major setbacks like demonetisation and the Covid pandemic have further exacerbated the decline in group culture in microfinance, which has had a widespread impact on repayment discipline and public confidence, the study pointed out. “Rebuilding credibility and confidence remains a major challenge to achieving sustainable growth”, the study said, adding that empowering