Date:19/03/2004 URL: http://www.thehindubusinessline.com/2004/03/19/stories/2004031900610400.htm

Back PlaNet to get Rs 45 lakh a year for micro-finance

Anna Peter

Mumbai , March 18

MICRO-FINANCING in the country is getting a leg up with more corporate entities and banks realising that empowerment at the grassroots level is a workable option.

One such institution, PlaNet Finance India, has just bagged Rs 45 lakh a year as funding for the next ten years. Last month, it signed an MoU with the Foundation for Sustainable Development, funded by an MNC consultancy firm, where the Foundation would "support the activities of PlaNet Finance India with an annual budget of Rs 45 lakh for the next 10 years." The first transfer will be made on April 1.

The common objectives will be poverty alleviation and entrepreneurship development.

According to Mr Haresh Shah, Trustee, PlaNet Finance India, existing funding agencies would be taught how to run micro-financing institutions (MFIs) and would also be rated on their performances. The funds would be disbursed through A-grade institutions and this activity would eventually provide a thrust to the development of rural finance in the informal sector.

According to PlaNet Finance statistics, there is likely to be a doubling of world production from $35 trillion to $70 trillion in less than 20 years and the numbers of those living on less than a dollar a day will double from one billion to two billion. Only 18 million people so far avail of micro-finance through 7,000 microfinance institutions, while worldwide those who need it number 500 million.

It believes that a combination of technology, knowledge empowerment, rating, and funding will develop the microfinance platform. It has also set up a rating system, called GIRAFE that evaluates and rates financial performance of MFIs. Donors, investment funds and other multilateral institutions seeking to finance MFIs can readily use this rating.

PlaNet Finance India is part of PlaNet Finance, a non-profit organisation, established in October 1998 to eradicate poverty. It also gets support from personalities — Mr Muhammad Yunus, Prof Amartya Sen, Mr Boutros Boutros-Ghali and Mr Shimon Peres.