Micro finance firms in India with banking license need to be careful as to not service the rich now: Muhammad Yunus

Muhammed Yunus , founder and managing director of Grameen Bank said that the youth of today aided with technology should make the social impact that the previous generations could not. Yunus said that unemployment is no longer a worry of the developing nations as countries like large chunk of youth in Italy and Greece too are suffering from joblessness.

ET asked him on the sidelines of One Young World what are the challenges faced in microfinance where one hand you have banking licenses rolled out and on another , ponzy scams are preventing many from investing in them. Yunus said that often there are some who start micro-financing thinking of it as another business where they need to rake in the profits and then get greedy. He said the Reserve Bank of India granting licenses to some of the micro-finance institutes was a step in the right direction , but cautioned that those banks now need to be careful that they should stop lending the poor and go back serving the rich.

India rolled out banking licenses to Ujjivan financial Services and Janalakshmi amongst others this year. There were 6 other micro finance were given in principal licenses .