From Rediff, we read more on Yunus' comments.
"They (MCI) were created to fight the loan sharks and not to create one. There should be some regulatory authority when you have so many micro credit programmes running. It's time to have one for transparency purposes so that people are given out information in a transparent way," he said during a video conferencing session organised at IIM-A.
"Bangladesh has created a micro credit regulatory authority to address these issues because we have so many programmes in the country now. I think it would be a good idea for India to do that," he said.
Grameen Bank offers small loans for self-employment to some of the poorest people in Bangladesh, including beggars.
The bank, with 2,600 branches and total deposits of $1.5 billion - of which 46 per cent come from its borrowers - has 8.3 million borrowers, 97 per cent of them women.
"The bank lends over $120 million per month in Bangladeshi currency," said Yunus, who received Nobel Prize [ Images ] for peace in 2006. Yunus maintained that government should not be running the micro credit programmes. Instead, they must create some sort of fund so that there is an easy source of funding for the NGOs who want to start such programmes.
"The government should not be running the micro credit programmes. They should be run by other people," Yunus said in reply to a query.
The reason why I say government should not be lending money directly to the borrowers is that the moment they do that, politics gets involved into it," Yunus said.
"The government should stay away from the credit side so that quality of credit is good." Yunus' remarks on MFIs come in the backdrop of a controversy over alleged strong-arm tactis adopted by MFIs in loan recovery from poor farmers and charging exorbitant interest on loans.