It was set-up in 2010, to review the definition of ‘microfinance’ and ‘Micro Finance Institutions (MFIs)’ for the purpose of regulation of non-banking finance companies (NBFCs) undertaking microfinance by the Reserve Bank of India and make appropriate recommendations.
Not less than 90% of its total assets (other than cash and bank balances and money market instruments) are in the nature of “qualifying assets.
For the purpose of above, a “qualifying asset” shall mean a loan which satisfies the following criteria:
the loan is given to a borrower who is a member of a household whose annual income does not exceed Rs. 50,000;
the amount of the loan does not exceed Rs. 25,000 and the total outstanding indebtedness of the borrower including this loan also do not exceed Rs. 25,000. the loan is without collateral;
the aggregate amount of loans given for income generation purposes is not less than 75% of the total loans given by the MFIs; the loan is repayable by weekly, fortnightly, or monthly installments at the choice of the borrower.
Malegam Committee