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"The World Bank is lending $407 million to India to scale up microfinance services in unbanked areas and improve capacity to generate quality statistics.
"The objective of the project is to scale up access to sustainable microfinance services to the financially excluded, particularly in under-served areas of India," The government said in a statement.
The funding, among other things, will enable MFIs to leverage private commercial funds to on-lend larger amounts to the under-served.
While $ 100 million is a credit from World Bank's concessionary lending arm International Development Association, the remaining $ 200 million is a loan from the International Bank for Reconstruction and Development.
Further, the second project has been formulated by Indian government to support statistical reforms in the country.
The main policy reform areas include strengthening institutions of leadership and coordination of the national statistical system, and increasing the support provided by the Central government and the Ministry of Statistics and Programme Implementation (MoSPI) to the statistical systems of states and union territories.
The other two reform areas are strengthening the capacity and performance of the statistical systems, and improving the coverage, quality, timeliness and credibility of statistics generated by the states and UTs in India.
The World Bank said India's rapid economic and social transformation over the past decade has brought to the fore a need for better and timelier statistical information."
It is encouraging to see the World Bank step on to progress microfinance in such a large way. As China has the second-largest population of rural poor after India, we wonder if similar support is viable in the near term to strengthen China's microfinance infrastructure, which is significantly less developed than India's or Bangladesh's.
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