Tuesday, January 30, 2007

Reliance Retail, Bharti likely to enter microfinance sector

Reliance Retail and Bharti Enterprises are looking towards the micro-credit sector as part of their efforts to set up rural supply chains for their retail initiatives. The Economic Times reports that according to sources Reliance will be seeking permission from the RBI so that it can set up an NBFC arm that will operate a microfinance institution (MFI). The micro-finance sector is estimated to be worth Rs 7,000 crore, for both the rural and urban poor. Reliance Retail might also be interested in the venture as another target for its mass consumption goods. Both companies are said to be attending a micro finance summit next month being hosted by the Women’s World Banking (WWB) in Mexico.
While Reliance has already made its first moves in tapping the potential and is said to be in early-stage talks with some leading MFIs based in Andhra Pradesh, rival Bharti has also shown interest in exploring the MFI route for supporting the retail supply chain, contract farming operations and dairy sourcing.

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