•Microfinance has been the hottest economic innovation of the past few years — even Natalie Portman and Benetton evangelise it. When you started PlaNet Finance in 1998, did you think it would be so universally applauded?

Well, I’m obviously a firm believer in the power of microfinance. PlaNet Finance has grown spectacularly in the last decade. And this is just the beginning. Unfortunately, poverty is growing and the numbers of the poor are growing, so we have a lot of work ahead of us.

•What are the hurdles along the way?

Well, there is so much bureaucracy and mismanagement that is dangerous, it can push people into debt. We need proper credit bureaus, capacity building, equity funding, improved credit lines. Microfinance needs very wealthy people to commit to it. As India develops, the wealthy in India need to do much more for their country.

•What’s your reaction to the idea that what poor countries need is more salaried jobs, more small and medium enterprises rather than microloans which miss a lot of this vital middle? Not everyone’s an entrepreneur, and many of these loans are simply consumed rather than pumped into any generative activity, so perhaps what poor countries need is more small and middle businesses, more paychecks?

I don’t think it’s a microfinance ‘or’ salaried jobs and more SMEs, it’s ‘and’, you need both efforts simultaneously and they are complementary efforts. You can’t provide salaries for 500 million people immediately.

•Do you think microfinance has drifted from its mission with commercial players stressing more on profits rather than poverty relief?

... contd.