Former RBI Deputy Governor Usha Thorat says regulations will have to keep pace with the changes at the business end. "All this time, MFIs were doing many things that were not microfinance, like selling gold," she says, pointing to the practice of MFIs giving consumption loans even earlier. The RBI's December guidelines changed that by saying that at least 75% of an MFI's loans have to be income-generating ones. In this backdrop, MFIs are branching out into consumption loans. "There are new regulatory issues," says Thorat. The RBI declined to participate in this story.
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