Helping themselves.

The article focuses on microcredit in India. A new report from the central bank, the Reserve Bank, argues that microcredit helps the poor and allows banks to increase their business, enhance their profit and spread the risk. Microcredit is already a flourishing business. "Self-Help Groups" (SHGs), supported by banks, bring together women who pool savings for a few months, allocate them to members who need small amounts temporarily, and are then eligible for a bank loan. The finance minister, Palaniappan Chidambaram, has promised to promote microfinance institutions and to help them to act as intermediaries between banks and borrowers. Despite its recent growth, however, microcredit is far less widespread in India than in neighbouring Bangladesh. Most of India's rural poor still do not have access to formal finance, a World Bank study found. Moneylenders are no longer as dominant as they were, but they still play an important role among the very poor. So there is a huge gap. Microcredit is a time-consuming business, where it is hard to achieve a big increase in market size without a commensurate increase in costs. Some see the solution in technology.