The JPC Scam

For the last few months parliamentary democracy in India has been brought to a dead standstill by what can only be called the JPC scam. In the season of scams, this is the mother of them all.

Our honorable Parliamentarians will now waste more of the nations time on issues such as the size of the committee, who should be on it, proportional representation etc. Hopefully by the time all these serious issues are debated and compromised on, the original scams will no longer excercise the public outrage.

What makes them think that any of them have the competence, leave alone the credibility to sit in judgement on anybody?  They all had their hands in the jar at some time or the other, and now they point those soiled fingers and wave their criminal hands on prime time TV, in indignation at being left out of the current orgies.

Their solution? Start a new orgy. Call it the JPC. Which will be nothing but a legitimate forum for sharing the spoils of all previous scams, and some meaningful flogging of dead horses and horse trading of the rest. Then there will be some public hand wringing, and some insignificant scape goat will be named and life will go merrily on.

Havent we learnt anything? From our past experiences with JPC's? Do we need any further insult to our intelligence as a nation? Why cant we disqualify the entire lot of them from any public office for ever? Even if they did not partake in the feast, they were party to it, or at the very least turned a blind eye to the loot of a nation.

We dont need another JPC. Let us at least nip this scam in its bud.

CONTACT:                                                                                  RELEASE

Rhea Rakshit                                                                                                                    24 Jan 2011

Micro Housing Finance Corporation          

Email: rhea.rakshit@mhfcindia.com

http://www.mhfcindia.com

Micro Housing Finance Corporation (“MHFC”) touches 500 loans,

crosses Rs. 20 cr in sanctions

Mumbai, India – Micro Housing Finance Corporation (“MHFC”), a housing finance company that is focused on financially excluded urban lower income families, has crossed 500 loans in sanctions, aggregating Rs. 20 cr. MHFC’s customers include mostly individuals employed in the informal sector, ranging from self employed vegetable vendors and barbers to salaried employees like housemaids, drivers and security guards.

According to Madhusudhan Menon, Chairman – “20 cr in loan sanctions is a key milestone as it represents the reinforcement  of an idea which has not been tested by any financial institution till date. These numbers, and the fact that we have no past dues on our portfolio, establish a strong case for lending to this segment and that customers who have adequate but undocumented incomes are good credit risks for secured mortgage lending. Most importantly, from a social perspective, we believe that every MHFC loan has improved the quality of life of large families currently living in deplorable urban conditions.”

MHFC received its license from the National Housing Bank in February 2009 and began operations in June 2009. Its first Rs 10 cr in sanctions took a little over a year with the second Rs 10 cr being sanctioned in just over 4 months. Loan amounts are usually around Rs. 5 lakhs (not exceeding 80% of the cost of the house) for a period not exceeding 15 years, with the house serving as security for the loan. Its rate of interest is currently between 12% and 14% per annum.

MHFC has a project-led approach and ties up with developers, both public and private, who have a similar focus on urban affordable housing (as defined as being in a price range not exceeding Rs 10 lakhs). Partnerships include tie-ups with builders like Tata Housing, Poddar Developers and Usha-Breco Realty in Mumbai. MHFC also has an active presence in Pune, Ahmedabad and Kolkata, and is currently operational in over 25 low-income housing projects across the country. The company plans to expand its outreach to Chennai, Bengaluru, Meerut and the NCR over the coming year.

About MHFC

MHFC, incorporated in May 2008, aims to fill a major need - long term housing finance - for urban lower income families, particularly those who lack documentation and thus cannot access mainstream banks and housing finance companies. According to the Chairman of MHFC, Mr. Madhusudan Menon, “This underserved segment is estimated to represent more than 90% of the workforce, but has almost no financial institution catering to its housing finance needs. Microfinance has paved the way to lend to this segment in an economically sustainable way, but its focus is on short term loans. We hope that MHFC will be able to take this process further and move towards supporting longer term financing requirements, especially for an important basic need like housing.”

MHFC received its license from the regulator, the National Housing Bank (“NHB”) in Feb 2009 and started sanctioning loans in June 2009. It lends to those who want to buy a home for use as a primary residence and cannot get loans for a variety of reasons, but especially due to the lack of documentary evidence of income (e.g. vendors, tradesmen, drivers, etc who do not have salary certificates).

For more information on MHFC, please visit http://www.mhfcindia.com

Mumbai marathon

Friends,
           After a break of two years, I have decided to run the
marathon in January. And this time it is the half marathon, just to
prove that I am not yet too old. Frankly it is the opportunity to run
over the sea link that is driving me this time, apart from a desire to
maintain domestic harmony and peace by raising some money for
Childline India, with which as all of you know Kajol is deeply
involved.

           Since I have spared you of the effort to reach for your
wallets, for two years now, I am sure you will be generous this time.
You will all have the dual privilege of making me run 21 km while at
the same time contributing to a  worthwhile cause, fully subsidised
through tax exemptions by the Government of India. You cannot get a
better deal than  appearing to be socially conscious, and obliging a
friend, while getting the Government to pay for it.

          .I am attaching info on Childline and also how to go about
contributing..



CHILDLINE 1098 is the largest national, 24x7, emergency, toll-free
phone and outreach service for children in distress. Once a call is
made on 1098, a rescue team reaches a child within 60 minutes. And
because it’s free, children of all ages from the poorest situations
can pick up the phone at any corner, any time, and say, ‘Hello
Childline?’ knowing that help, if they need it will reach them within
an hour


Currently in 82 cities across 25 states of the country,  Childline has
responded to  over 18 million calls.There is a perceived need to
extend this service to every district in the country. By the end of
March 2011, Childline will be expanding to 80 more cities, and
continue to grow. To know more youcan log on to
www.childlineindia.org.in


I am using this opportunity to raise funds for the work being done by
CHILDLINE and would like to seek your support for this cause. Any
amount, big or small (preferably big) can help change lives. You will
be surprised at how little it takes to make a mammoth difference.


 Donations can be made by cheque in favour of 'Childline India
Foundation' . Please mail the cheques to the attention of:


Madhusudhan Menon, 1802, Marathon Heights, P.B. Marg, Mumbai 400013.

................................

Alternatively, you may give online through my iGive page -




http://www.unitedwaymumbai.org/index.php?option=com_content&view=article&id=146&popup=1&template_id=280


 All donations by check directly to 'Childline India Foundation' are
eligible for 100% Tax exemption under 35AC of the IT Act.



Make sure you donate generously.



madhu

Reply

Forward

grab grab grab

There used to be a time when people got in to public life, both politics and administration to provide public service. I remember my dad who used to proudly call himself a Government servant.Public service was considered the highest possible career option, and I still recollect spending months learning European history, so I too could become an IAS officer. Thank God I did not make the cut.

The politicians used to be outstanding examples of public probity, and were poorly paid but richly respected for the sacrifices they made to be of service to the people.

In less than 20 years how things have changed.

Politicians are now grabbing everything they can get, and the most passionately debated subject in parliament revolves round their own salaries and perquisites. Their cost to the exchequer is now well over 100 times our per capita income. And this does not include the much larger rewards in terms of bribes and other unmentionable fringe benefits. And they want more..All the time.

The so called Government servants are now masters of the universe, and command and get privileges that the common man can only dream about. Little does the common man know that he is paying for all of this. Whether it is bending the rules on coastal construction, Floor space Index, security, you name it, they have bent it like Beckham, either for money or to acccomodate themselves in sylvan surroundings. The Adarsh controversy in Mumbai, and the latest proposal to allot the CWG flats to themselves are but tips of the iceberg of corruption, which we all tolerate.

And shamelessly they grab more for themselves.And helplessly we watch this pillaging and looting of our country.

microfinance muddle

A few weeks ago they were saviours of the poor, reaching where no bank had reached before, providing credit to the unbankable and changing the rules of the game. Today they are reverse Robin Hoods who steal from the poor to incredibly enrich themselves. All it took was a successful IPO, a CEOs sacking, a scorned wife and a few probably unrelated suicides to reverse public opinion about Indias micro finance industry so dramatically.

Everything that went before, 70 million customers, almost 5 billion dollars in loans to the poor, high profitability, near zero debt defaults and of course 100% + growth rates, attracted a huge amount of professional institutional capital to this industry. The management which was initially fired by the social impact they could make, got carried away by commercial motivations and what we now have is a real threat of a regulatory response which can kill the industry.

It is useful to understand that the Government of India and various State Governments (notably in Andhra Pradesh, which is considered the micro finance capital of India) have been attempting various versions of microfinance with very limited success for many years. In fact the earliest attempts at financial inclusion for the poor in India predates even Prof. Mohammed Yunus's efforts with Grameen Bank in Bangladesh. Sadly, as is the case with most well meaning but poorly executed policies of the State, they failed to make any significant impact anywhere.
It took the private sector micro finance industry less than 10 years to grow to its present size and in the process help millions of poor families out of abject poverty.

How did that happen? State sloth is squarely responsible for its inability to capitalize on the opportunity that the private micro finance industry has successfully demonstrated in a few years. Early social sensitivity, access to serious capital and talent all helped the industry to grow the way it did. They developed relatively sophisticated systems and implemented a vision with a passion that the State can never muster.

And now the same State which failed miserably, despite a three decade head start, continues to be a competitor, but is now taking on the role of judge, jury and executioner. With the press fishing in muddy waters, the muddle can kill the industry and simultaneously kill the hopes of millions of the urban and rural poor to find a route out of poverty.

The intention here is not to make a case for apathy towards the sensitive issue of financial inclusion. Market practices will evolve, and competition will ensure that the weak and expensive players will be acquired by stronger players or eliminated by customer choice. But for the State to presume it knows best, especially when they blew their own chance at doing what the micro finance industry did, is questionable if not downright dangerous.

SKS and the IPO

The SKS IPO has been controversial for many reasons. The core issue was if it was ethically right to privately profit from serving the poor. This debate has raged in the front pages of the pink papers and the international press and everything ranging from the methods used, the interest rates charged and the marital status of the promoters have been scrutinised and criticised.

The fact is that the issue was a huge success and heavily oversubscribed. It listed at a premium and closed the first day of trading at a premium of over 10% to issue price. After a long time an Indian IPO generated profits for flippers who borrow and subscribe to IPOs and sell on listing. Needless to say original investors and promoters who cashed out made huge profits. All in all the market has pronounced its verdict and it is indeed OK to profit from the poor.

The fact that the market now views this segment as investment worthy has huge implications. Every investment manager round the globe will now look to allocate a percentage of the portfolio and large capital flows will reduce cost of capital to this segment and the ensuing competition will eventually result in lowering the cost of borrowing to the poor. With over 300 million of our population not having any access to formal credit markets, for productive, consumptive or housing needs the importance of formal capital cannot be overemphasised. Over 1 trillion dollars of capital is required of which at least $250billion has to be in equity form.

So let us not waste our breath debating ethics but laud SKS for unlocking a new source of much needed capital.

the underbelly of delhi

12000crores being spent on the common wealth games? Did I hear right? In a country where between 30 to 40% earn less than $2 a day. And what do we get for it? I am told prestige.
Of course prestige is priceless, but only if we have something to be proud about.

If we spend 12000 crores and create ugly non functional monstrosities, and do not win a single medal, will that still be prestigious?And who is paying for this anyway? and who gets the so called prestige? the politicians? the sports officials? In any case the politicians are the sports officials , and get not only the prestige but also, as i understand, most of the money.

Then someone told me that Delhi in the process will get some world class infrastructure. Now, I have been in and out of Delhi for quite a few years now, and happen to believe that Delhi relatively speaking has the best infrastructure in the country..be it the broad roads, a swanky airport, a metro system that compares favourably with any that I have used anywhere in the world. So why take money from the rest of the country which is literally crying for some decent infrastructure spend and create more in Delhi? Just so that our worthy netas can feel proud? And get richer?

Any why are our regional Netas not crying hoarse at this daylight robbery to feed Delhis underbelly? Do they get to share in the prestige and the loot too?