Self Help India: Lessons from Bangladesh and Malaysia
Peerzada Shah Faisala and J. A. Arul Chellakumara

Abstract
Indian microfinance industry is flourishing and spreading very fast. Recently some top MFIs have shown massive growth. Some of these MFIs have shown 100 per cent returns from the loans disbursed. The growth rate of 100 per cent to 421 per cent was recorded with at least 14 MFIs. The reason behind their rapid growth and development is associated with SHGs, which have resulted as the backbone for MFIs. Heavy interest rates charged on loans by MFIs is the primary reason for their unprecedented growth, as the targeted people mostly belong from the poor and low-income class of society, who have no other means of accessing finance facility through proper channels from scheduled banks. This article makes an attempt to analyze interest rates of MFIs in India and Bangladesh. A significant difference in interest rates of MFIs within India and Bangladesh is also calculated. It is found that MFIs in Bangladesh are charging lower interest rates on loans as compared to Indian MFIs. An attempt is made study the micro financial system of Malaysia where AIM is studied and observed to be an alternative for Indian microfinance institutions with respect to their rates of Interest, which can help Indian poor, Underprivileged and unemployed people a chance to raise their living standard from existing.

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