The Finance Ministry is averse to capping the interest rates in the Microfinance Regulatory Bill that it proposes to introduce in the Budget session of Parliament, reports CNBC-TV18.
Muhammad Yunus, is not glib or strident like many a social activist but his refreshing perspective on the concerns of the day and faith in ordinary people kept people glued to his talk in Delhi. Indebtedness has driven farmers to suicide in Maharashtra's Vidharba region, but the banker to the poor says faced with a similar predicament he would try a different track.
Muhammad Yunus, Chief Architect Grameen Bank and Nobel Laureate, says, "We will say that we are not there to protect the money but we are here to protect you."
Yunus believes that profit maximisation as the goal of a company limits the excitement of enterprise. He proposes that the greater good of society as the bottomline of social enterprises.
Yunus adds, "I would define it as a non-loss, non-dividend company."
Muhammad Yunus says there are two ways of doing the same business. Viewed as a profit maximising activity, Microfinance instititutions will charge a high rate of interest. But if the intention is social good, Yunus says the Finance Ministry should introduce a formula in the regulatory bill, to impose a ceiling on the interest rates that these agencies can charge.
States Muhammad Yunus, " Cost of funds plus 15 percent - that is what I would propose."
The conventional wisdom is that enterprises cannot win unless driven by fear or greed and that altruism has no place in business. But Yunus has made a 100 million poor people bankable, itself considered a crazy idea at one time. Yunus's ideas are radical, they may be practical as well.