A much deeper structural change that is sweeping the microfinance landscape is the transformation of NGOs into lending institutions. There is strong movement towards the transformation of NGOs’ promotional work in dealing with poor into commercial microfinance operations through variety of means. One such transformation is the conversion of MFI to NBFC.

On the technology front, use of handheld devices, varieties of smart cards and mobile phone-based collection and payment processes have been experimented. Web-based initiatives that connect the funders with the recipients and individual lenders with individual borrowers have also been designed.

Also significant initiatives on financial inclusion have been announced with the setting of two funds in the hands of NABARD. The Financial Inclusion Fund and Financial Inclusion Technology Fund would support the different institutions with funding for expanding access. Although the announced size of funds is of the order of Rs 500 crores each, the actual annual flow would be smaller.

The apex development banks have continued with their intensive work in the sector. The refinance flow from NABARD to SBLP increased to Rs 1874 crores in year 2007-2008 from Rs 1292 crores in the previous year. NABARD has moved to embrace all segments of the microfinance sector over the last two years shedding the image of SHG only bank. Even SIDBI has also recorded considerable growth in its loan portfolio. Its outstanding loans to MFIs reached at a level of Rs 958 crores in 2007-2008 from Rs 548 crores be the end of March 2007.