Practice Questions & Answers :: eLitmus

 The most avid users of social-networking websites may be exhibitionist teenagers, but when it comes to more grown-up use by business people, such sites have a surprisingly long pedigree. LinkedIn, an online network for professionals that signed up its ten-millionth user this week, was launched in 2003, a few months before MySpace, the biggest of the social sites. Consumer adoption of social networking has grabbed most attention since then. But interest in the business uses of the technology is rising. Many companies are attracted by the marketing opportunities offered by community sites. But the results can be painful. Pizza Hut has a profile on MySpace devoted to a pizza-delivery driver called Ted, who helpfully lets friends in on the chain's latest promotional offers Dude, I just heard some scoop from the Hut, ran one recent post). Wal-Mart started up and rapidly closed down a much-derided teenage site called The Hub last year. Reuters hopes to do better with its forthcoming site for those in the financial-services industry. Social networking has proved to be of greatest value to companies in recruitment. Unlike a simple jobs board, social networks enable members to pass suitable vacancies on to people they know, and to refer potential candidates back to the recruiter. So employers reach not only active jobseekers but also a much larger pool of passive candidates through referrals. LinkedIn has over 350 corporate customers which pay up to $250,000 each to advertise jobs to its expanding network. Having lots of people in a network increases its value in a super-linear fashion, says Reid Hoffman, LinkedIn's founder. He says corporate use of his service is now spreading beyond recruiters: hedge funds use it to identify and contact experts, for example. Jobster, a Seattle-based social-networking site, is entirely devoted to recruitment. Jobseekers can post their own profiles and tag their skills; these tags are then used to match candidates against jobs posted by employers. Unlike on LinkedIn, companies can set up private networks to ensure that the right kinds of people are alerted to openings and that the data they post remain under their control. Information needs to stay behind when a user leaves the company, argues Jason Goldberg, Jobster's founder. Where LinkedIn emphasises scale and Jobster emphasises specialisation, Visible Path, a startup based in New York, focuses on the strength of individual relationships. The firm analyses email traffic, calendars and diary entries to identify the strongest relationships that exist inside and outside a company. An obvious application is to generate leads: a salesman can use the service to identify who within his network has the closest links to a prospect, and request an introduction. Such techniques are also gathering momentum in knowledge management. IBM recently unveiled a social-software platform called Lotus Connections, due out in the next few weeks, that lets company employees post detailed profiles of themselves, team up on projects and share bookmarks. One manufacturer testing the software is using it to put in experienced members of its customer-services team in touch with the right engineers. It can also be used to identify in-house experts. Software firms will probably start bundling social features of this kind into all sorts of business software. To work well in the business world, social networking has to clear some big hurdles. Incentives to participate in a network have to be symmetrical, for one thing. The interests of MySpace members and of jobseekers and employers may be aligned, but it is not clear why commission-hungry salespeople would want to share their best leads with colleagues. Limiting the size of the network can reduce its value for companies, yet confidentiality is another obvious concern for companies that invite outsiders into their online communities. Social networking sounds great in theory, but the business benefits are still unproven, says Paul Jackson of Forrester, a consultancy. But if who you know really does matter more than what you know, it has obvious potential.

 The most avid users of social-networking websites may be exhibitionist teenagers, but when it comes to more grown-up use by business people, such sites have a surprisingly long pedigree. LinkedIn, an online network for professionals that signed up its ten-millionth user this week, was launched in 2003, a few months before MySpace, the biggest of the social sites. Consumer adoption of social networking has grabbed most attention since then. But interest in the business uses of the technology is rising. Many companies are attracted by the marketing opportunities offered by community sites. But the results can be painful. Pizza Hut has a profile on MySpace devoted to a pizza-delivery driver called Ted, who helpfully lets friends in on the chain's latest promotional offers Dude, I just heard some scoop from the Hut, ran one recent post). Wal-Mart started up and rapidly closed down a much-derided teenage site called The Hub last year. Reuters hopes to do better with its forthcoming site for those in the financial-services industry. Social networking has proved to be of greatest value to companies in recruitment. Unlike a simple jobs board, social networks enable members to pass suitable vacancies on to people they know, and to refer potential candidates back to the recruiter. So employers reach not only active jobseekers but also a much larger pool of passive candidates through referrals. LinkedIn has over 350 corporate customers which pay up to $250,000 each to advertise jobs to its expanding network. Having lots of people in a network increases its value in a super-linear fashion, says Reid Hoffman, LinkedIn's founder. He says corporate use of his service is now spreading beyond recruiters: hedge funds use it to identify and contact experts, for example. Jobster, a Seattle-based social-networking site, is entirely devoted to recruitment. Jobseekers can post their own profiles and tag their skills; these tags are then used to match candidates against jobs posted by employers. Unlike on LinkedIn, companies can set up private networks to ensure that the right kinds of people are alerted to openings and that the data they post remain under their control. Information needs to stay behind when a user leaves the company, argues Jason Goldberg, Jobster's founder. Where LinkedIn emphasises scale and Jobster emphasises specialisation, Visible Path, a startup based in New York, focuses on the strength of individual relationships. The firm analyses email traffic, calendars and diary entries to identify the strongest relationships that exist inside and outside a company. An obvious application is to generate leads: a salesman can use the service to identify who within his network has the closest links to a prospect, and request an introduction. Such techniques are also gathering momentum in knowledge management. IBM recently unveiled a social-software platform called Lotus Connections, due out in the next few weeks, that lets company employees post detailed profiles of themselves, team up on projects and share bookmarks. One manufacturer testing the software is using it to put in experienced members of its customer-services team in touch with the right engineers. It can also be used to identify in-house experts. Software firms will probably start bundling social features of this kind into all sorts of business software. To work well in the business world, social networking has to clear some big hurdles. Incentives to participate in a network have to be symmetrical, for one thing. The interests of MySpace members and of jobseekers and employers may be aligned, but it is not clear why commission-hungry salespeople would want to share their best leads with colleagues. Limiting the size of the network can reduce its value for companies, yet confidentiality is another obvious concern for companies that invite outsiders into their online communities. Social networking sounds great in theory, but the business benefits are still unproven, says Paul Jackson of Forrester, a consultancy. But if who you know really does matter more than what you know, it has obvious potential.

 The most avid users of social-networking websites may be exhibitionist teenagers, but when it comes to more grown-up use by business people, such sites have a surprisingly long pedigree. LinkedIn, an online network for professionals that signed up its ten-millionth user this week, was launched in 2003, a few months before MySpace, the biggest of the social sites. Consumer adoption of social networking has grabbed most attention since then. But interest in the business uses of the technology is rising. Many companies are attracted by the marketing opportunities offered by community sites. But the results can be painful. Pizza Hut has a profile on MySpace devoted to a pizza-delivery driver called Ted, who helpfully lets friends in on the chain's latest promotional offers Dude, I just heard some scoop from the Hut, ran one recent post). Wal-Mart started up and rapidly closed down a much-derided teenage site called The Hub last year. Reuters hopes to do better with its forthcoming site for those in the financial-services industry. Social networking has proved to be of greatest value to companies in recruitment. Unlike a simple jobs board, social networks enable members to pass suitable vacancies on to people they know, and to refer potential candidates back to the recruiter. So employers reach not only active jobseekers but also a much larger pool of passive candidates through referrals. LinkedIn has over 350 corporate customers which pay up to $250,000 each to advertise jobs to its expanding network. Having lots of people in a network increases its value in a super-linear fashion, says Reid Hoffman, LinkedIn's founder. He says corporate use of his service is now spreading beyond recruiters: hedge funds use it to identify and contact experts, for example. Jobster, a Seattle-based social-networking site, is entirely devoted to recruitment. Jobseekers can post their own profiles and tag their skills; these tags are then used to match candidates against jobs posted by employers. Unlike on LinkedIn, companies can set up private networks to ensure that the right kinds of people are alerted to openings and that the data they post remain under their control. Information needs to stay behind when a user leaves the company, argues Jason Goldberg, Jobster's founder. Where LinkedIn emphasises scale and Jobster emphasises specialisation, Visible Path, a startup based in New York, focuses on the strength of individual relationships. The firm analyses email traffic, calendars and diary entries to identify the strongest relationships that exist inside and outside a company. An obvious application is to generate leads: a salesman can use the service to identify who within his network has the closest links to a prospect, and request an introduction. Such techniques are also gathering momentum in knowledge management. IBM recently unveiled a social-software platform called Lotus Connections, due out in the next few weeks, that lets company employees post detailed profiles of themselves, team up on projects and share bookmarks. One manufacturer testing the software is using it to put in experienced members of its customer-services team in touch with the right engineers. It can also be used to identify in-house experts. Software firms will probably start bundling social features of this kind into all sorts of business software. To work well in the business world, social networking has to clear some big hurdles. Incentives to participate in a network have to be symmetrical, for one thing. The interests of MySpace members and of jobseekers and employers may be aligned, but it is not clear why commission-hungry salespeople would want to share their best leads with colleagues. Limiting the size of the network can reduce its value for companies, yet confidentiality is another obvious concern for companies that invite outsiders into their online communities. Social networking sounds great in theory, but the business benefits are still unproven, says Paul Jackson of Forrester, a consultancy. But if who you know really does matter more than what you know, it has obvious potential.

 The most avid users of social-networking websites may be exhibitionist teenagers, but when it comes to more grown-up use by business people, such sites have a surprisingly long pedigree. LinkedIn, an online network for professionals that signed up its ten-millionth user this week, was launched in 2003, a few months before MySpace, the biggest of the social sites. Consumer adoption of social networking has grabbed most attention since then. But interest in the business uses of the technology is rising. Many companies are attracted by the marketing opportunities offered by community sites. But the results can be painful. Pizza Hut has a profile on MySpace devoted to a pizza-delivery driver called Ted, who helpfully lets friends in on the chain's latest promotional offers Dude, I just heard some scoop from the Hut, ran one recent post). Wal-Mart started up and rapidly closed down a much-derided teenage site called The Hub last year. Reuters hopes to do better with its forthcoming site for those in the financial-services industry. Social networking has proved to be of greatest value to companies in recruitment. Unlike a simple jobs board, social networks enable members to pass suitable vacancies on to people they know, and to refer potential candidates back to the recruiter. So employers reach not only active jobseekers but also a much larger pool of passive candidates through referrals. LinkedIn has over 350 corporate customers which pay up to $250,000 each to advertise jobs to its expanding network. Having lots of people in a network increases its value in a super-linear fashion, says Reid Hoffman, LinkedIn's founder. He says corporate use of his service is now spreading beyond recruiters: hedge funds use it to identify and contact experts, for example. Jobster, a Seattle-based social-networking site, is entirely devoted to recruitment. Jobseekers can post their own profiles and tag their skills; these tags are then used to match candidates against jobs posted by employers. Unlike on LinkedIn, companies can set up private networks to ensure that the right kinds of people are alerted to openings and that the data they post remain under their control. Information needs to stay behind when a user leaves the company, argues Jason Goldberg, Jobster's founder. Where LinkedIn emphasises scale and Jobster emphasises specialisation, Visible Path, a startup based in New York, focuses on the strength of individual relationships. The firm analyses email traffic, calendars and diary entries to identify the strongest relationships that exist inside and outside a company. An obvious application is to generate leads: a salesman can use the service to identify who within his network has the closest links to a prospect, and request an introduction. Such techniques are also gathering momentum in knowledge management. IBM recently unveiled a social-software platform called Lotus Connections, due out in the next few weeks, that lets company employees post detailed profiles of themselves, team up on projects and share bookmarks. One manufacturer testing the software is using it to put in experienced members of its customer-services team in touch with the right engineers. It can also be used to identify in-house experts. Software firms will probably start bundling social features of this kind into all sorts of business software. To work well in the business world, social networking has to clear some big hurdles. Incentives to participate in a network have to be symmetrical, for one thing. The interests of MySpace members and of jobseekers and employers may be aligned, but it is not clear why commission-hungry salespeople would want to share their best leads with colleagues. Limiting the size of the network can reduce its value for companies, yet confidentiality is another obvious concern for companies that invite outsiders into their online communities. Social networking sounds great in theory, but the business benefits are still unproven, says Paul Jackson of Forrester, a consultancy. But if who you know really does matter more than what you know, it has obvious potential.

 The most avid users of social-networking websites may be exhibitionist teenagers, but when it comes to more grown-up use by business people, such sites have a surprisingly long pedigree. LinkedIn, an online network for professionals that signed up its ten-millionth user this week, was launched in 2003, a few months before MySpace, the biggest of the social sites. Consumer adoption of social networking has grabbed most attention since then. But interest in the business uses of the technology is rising. Many companies are attracted by the marketing opportunities offered by community sites. But the results can be painful. Pizza Hut has a profile on MySpace devoted to a pizza-delivery driver called Ted, who helpfully lets friends in on the chain's latest promotional offers Dude, I just heard some scoop from the Hut, ran one recent post). Wal-Mart started up and rapidly closed down a much-derided teenage site called The Hub last year. Reuters hopes to do better with its forthcoming site for those in the financial-services industry. Social networking has proved to be of greatest value to companies in recruitment. Unlike a simple jobs board, social networks enable members to pass suitable vacancies on to people they know, and to refer potential candidates back to the recruiter. So employers reach not only active jobseekers but also a much larger pool of passive candidates through referrals. LinkedIn has over 350 corporate customers which pay up to $250,000 each to advertise jobs to its expanding network. Having lots of people in a network increases its value in a super-linear fashion, says Reid Hoffman, LinkedIn's founder. He says corporate use of his service is now spreading beyond recruiters: hedge funds use it to identify and contact experts, for example. Jobster, a Seattle-based social-networking site, is entirely devoted to recruitment. Jobseekers can post their own profiles and tag their skills; these tags are then used to match candidates against jobs posted by employers. Unlike on LinkedIn, companies can set up private networks to ensure that the right kinds of people are alerted to openings and that the data they post remain under their control. Information needs to stay behind when a user leaves the company, argues Jason Goldberg, Jobster's founder. Where LinkedIn emphasises scale and Jobster emphasises specialisation, Visible Path, a startup based in New York, focuses on the strength of individual relationships. The firm analyses email traffic, calendars and diary entries to identify the strongest relationships that exist inside and outside a company. An obvious application is to generate leads: a salesman can use the service to identify who within his network has the closest links to a prospect, and request an introduction. Such techniques are also gathering momentum in knowledge management. IBM recently unveiled a social-software platform called Lotus Connections, due out in the next few weeks, that lets company employees post detailed profiles of themselves, team up on projects and share bookmarks. One manufacturer testing the software is using it to put in experienced members of its customer-services team in touch with the right engineers. It can also be used to identify in-house experts. Software firms will probably start bundling social features of this kind into all sorts of business software. To work well in the business world, social networking has to clear some big hurdles. Incentives to participate in a network have to be symmetrical, for one thing. The interests of MySpace members and of jobseekers and employers may be aligned, but it is not clear why commission-hungry salespeople would want to share their best leads with colleagues. Limiting the size of the network can reduce its value for companies, yet confidentiality is another obvious concern for companies that invite outsiders into their online communities. Social networking sounds great in theory, but the business benefits are still unproven, says Paul Jackson of Forrester, a consultancy. But if who you know really does matter more than what you know, it has obvious potential.

 The most avid users of social-networking websites may be exhibitionist teenagers, but when it comes to more grown-up use by business people, such sites have a surprisingly long pedigree. LinkedIn, an online network for professionals that signed up its ten-millionth user this week, was launched in 2003, a few months before MySpace, the biggest of the social sites. Consumer adoption of social networking has grabbed most attention since then. But interest in the business uses of the technology is rising. Many companies are attracted by the marketing opportunities offered by community sites. But the results can be painful. Pizza Hut has a profile on MySpace devoted to a pizza-delivery driver called Ted, who helpfully lets friends in on the chain's latest promotional offers Dude, I just heard some scoop from the Hut, ran one recent post). Wal-Mart started up and rapidly closed down a much-derided teenage site called The Hub last year. Reuters hopes to do better with its forthcoming site for those in the financial-services industry. Social networking has proved to be of greatest value to companies in recruitment. Unlike a simple jobs board, social networks enable members to pass suitable vacancies on to people they know, and to refer potential candidates back to the recruiter. So employers reach not only active jobseekers but also a much larger pool of passive candidates through referrals. LinkedIn has over 350 corporate customers which pay up to $250,000 each to advertise jobs to its expanding network. Having lots of people in a network increases its value in a super-linear fashion, says Reid Hoffman, LinkedIn's founder. He says corporate use of his service is now spreading beyond recruiters: hedge funds use it to identify and contact experts, for example. Jobster, a Seattle-based social-networking site, is entirely devoted to recruitment. Jobseekers can post their own profiles and tag their skills; these tags are then used to match candidates against jobs posted by employers. Unlike on LinkedIn, companies can set up private networks to ensure that the right kinds of people are alerted to openings and that the data they post remain under their control. Information needs to stay behind when a user leaves the company, argues Jason Goldberg, Jobster's founder. Where LinkedIn emphasises scale and Jobster emphasises specialisation, Visible Path, a startup based in New York, focuses on the strength of individual relationships. The firm analyses email traffic, calendars and diary entries to identify the strongest relationships that exist inside and outside a company. An obvious application is to generate leads: a salesman can use the service to identify who within his network has the closest links to a prospect, and request an introduction. Such techniques are also gathering momentum in knowledge management. IBM recently unveiled a social-software platform called Lotus Connections, due out in the next few weeks, that lets company employees post detailed profiles of themselves, team up on projects and share bookmarks. One manufacturer testing the software is using it to put in experienced members of its customer-services team in touch with the right engineers. It can also be used to identify in-house experts. Software firms will probably start bundling social features of this kind into all sorts of business software. To work well in the business world, social networking has to clear some big hurdles. Incentives to participate in a network have to be symmetrical, for one thing. The interests of MySpace members and of jobseekers and employers may be aligned, but it is not clear why commission-hungry salespeople would want to share their best leads with colleagues. Limiting the size of the network can reduce its value for companies, yet confidentiality is another obvious concern for companies that invite outsiders into their online communities. Social networking sounds great in theory, but the business benefits are still unproven, says Paul Jackson of Forrester, a consultancy. But if who you know really does matter more than what you know, it has obvious potential.

 The most avid users of social-networking websites may be exhibitionist teenagers, but when it comes to more grown-up use by business people, such sites have a surprisingly long pedigree. LinkedIn, an online network for professionals that signed up its ten-millionth user this week, was launched in 2003, a few months before MySpace, the biggest of the social sites. Consumer adoption of social networking has grabbed most attention since then. But interest in the business uses of the technology is rising. Many companies are attracted by the marketing opportunities offered by community sites. But the results can be painful. Pizza Hut has a profile on MySpace devoted to a pizza-delivery driver called Ted, who helpfully lets friends in on the chain's latest promotional offers Dude, I just heard some scoop from the Hut, ran one recent post). Wal-Mart started up and rapidly closed down a much-derided teenage site called The Hub last year. Reuters hopes to do better with its forthcoming site for those in the financial-services industry. Social networking has proved to be of greatest value to companies in recruitment. Unlike a simple jobs board, social networks enable members to pass suitable vacancies on to people they know, and to refer potential candidates back to the recruiter. So employers reach not only active jobseekers but also a much larger pool of passive candidates through referrals. LinkedIn has over 350 corporate customers which pay up to $250,000 each to advertise jobs to its expanding network. Having lots of people in a network increases its value in a super-linear fashion, says Reid Hoffman, LinkedIn's founder. He says corporate use of his service is now spreading beyond recruiters: hedge funds use it to identify and contact experts, for example. Jobster, a Seattle-based social-networking site, is entirely devoted to recruitment. Jobseekers can post their own profiles and tag their skills; these tags are then used to match candidates against jobs posted by employers. Unlike on LinkedIn, companies can set up private networks to ensure that the right kinds of people are alerted to openings and that the data they post remain under their control. Information needs to stay behind when a user leaves the company, argues Jason Goldberg, Jobster's founder. Where LinkedIn emphasises scale and Jobster emphasises specialisation, Visible Path, a startup based in New York, focuses on the strength of individual relationships. The firm analyses email traffic, calendars and diary entries to identify the strongest relationships that exist inside and outside a company. An obvious application is to generate leads: a salesman can use the service to identify who within his network has the closest links to a prospect, and request an introduction. Such techniques are also gathering momentum in knowledge management. IBM recently unveiled a social-software platform called Lotus Connections, due out in the next few weeks, that lets company employees post detailed profiles of themselves, team up on projects and share bookmarks. One manufacturer testing the software is using it to put in experienced members of its customer-services team in touch with the right engineers. It can also be used to identify in-house experts. Software firms will probably start bundling social features of this kind into all sorts of business software. To work well in the business world, social networking has to clear some big hurdles. Incentives to participate in a network have to be symmetrical, for one thing. The interests of MySpace members and of jobseekers and employers may be aligned, but it is not clear why commission-hungry salespeople would want to share their best leads with colleagues. Limiting the size of the network can reduce its value for companies, yet confidentiality is another obvious concern for companies that invite outsiders into their online communities. Social networking sounds great in theory, but the business benefits are still unproven, says Paul Jackson of Forrester, a consultancy. But if who you know really does matter more than what you know, it has obvious potential.

 The most avid users of social-networking websites may be exhibitionist teenagers, but when it comes to more grown-up use by business people, such sites have a surprisingly long pedigree. LinkedIn, an online network for professionals that signed up its ten-millionth user this week, was launched in 2003, a few months before MySpace, the biggest of the social sites. Consumer adoption of social networking has grabbed most attention since then. But interest in the business uses of the technology is rising. Many companies are attracted by the marketing opportunities offered by community sites. But the results can be painful. Pizza Hut has a profile on MySpace devoted to a pizza-delivery driver called Ted, who helpfully lets friends in on the chain's latest promotional offers Dude, I just heard some scoop from the Hut, ran one recent post). Wal-Mart started up and rapidly closed down a much-derided teenage site called The Hub last year. Reuters hopes to do better with its forthcoming site for those in the financial-services industry. Social networking has proved to be of greatest value to companies in recruitment. Unlike a simple jobs board, social networks enable members to pass suitable vacancies on to people they know, and to refer potential candidates back to the recruiter. So employers reach not only active jobseekers but also a much larger pool of passive candidates through referrals. LinkedIn has over 350 corporate customers which pay up to $250,000 each to advertise jobs to its expanding network. Having lots of people in a network increases its value in a super-linear fashion, says Reid Hoffman, LinkedIn's founder. He says corporate use of his service is now spreading beyond recruiters: hedge funds use it to identify and contact experts, for example. Jobster, a Seattle-based social-networking site, is entirely devoted to recruitment. Jobseekers can post their own profiles and tag their skills; these tags are then used to match candidates against jobs posted by employers. Unlike on LinkedIn, companies can set up private networks to ensure that the right kinds of people are alerted to openings and that the data they post remain under their control. Information needs to stay behind when a user leaves the company, argues Jason Goldberg, Jobster's founder. Where LinkedIn emphasises scale and Jobster emphasises specialisation, Visible Path, a startup based in New York, focuses on the strength of individual relationships. The firm analyses email traffic, calendars and diary entries to identify the strongest relationships that exist inside and outside a company. An obvious application is to generate leads: a salesman can use the service to identify who within his network has the closest links to a prospect, and request an introduction. Such techniques are also gathering momentum in knowledge management. IBM recently unveiled a social-software platform called Lotus Connections, due out in the next few weeks, that lets company employees post detailed profiles of themselves, team up on projects and share bookmarks. One manufacturer testing the software is using it to put in experienced members of its customer-services team in touch with the right engineers. It can also be used to identify in-house experts. Software firms will probably start bundling social features of this kind into all sorts of business software. To work well in the business world, social networking has to clear some big hurdles. Incentives to participate in a network have to be symmetrical, for one thing. The interests of MySpace members and of jobseekers and employers may be aligned, but it is not clear why commission-hungry salespeople would want to share their best leads with colleagues. Limiting the size of the network can reduce its value for companies, yet confidentiality is another obvious concern for companies that invite outsiders into their online communities. Social networking sounds great in theory, but the business benefits are still unproven, says Paul Jackson of Forrester, a consultancy. But if who you know really does matter more than what you know, it has obvious potential.

 The impressive recent growth of certain sectors of the Indian economy is a necessary but insufficient condition for the elimination of extreme poverty.

In order to ensure that the poorest benefit from this growth, and also contribute to it, the expansion and improvement of the microfinance sector should be a national priority. Studies suggest that the impact of microfinance on the poorest is greater than on the poor, and yet another that non-participating members of communities where microfinance operates experience socio-economic gains ? suggesting strong spillover effects. Moreover, well-managed microfinance institutions (MFIs) have shown a capacity to wean themselves off of subsidies and become sustainable within a few years.

Microfinance is powerful, but it is clearly no panacea. Microfinance does not directly address some structural problems facing Indian society and the economy, and it is not yet as efficient as it will be when economies of scale are realized and a more supportive policy environment is created.

Loan products are still too inflexible, and savings and insurance services that the poor also need are not widely available due to regulatory barriers.

Still, microfinance is one of the few market-based, scalable anti-poverty solutions that is in place in India today, and the argument to scale it up to meet the overwhelming need is compelling. According to Sa-Dhan, the overall outreach is 6.5 million families and the sector-wide loan portfolio is Rs 2,500 crore.

However, this is meeting only 10% of the estimated demand. Importantly, new initiatives are expanding this success story to the some of the country's poorest regions, such as eastern and central Uttar Pradesh.

The local and national governments have an important role to play in ensuring the growth and improvement of microfinance. First and foremost, the market should be left to set interest rates, not the state. Ensuring transparency and full disclosure of rates including fees is something the government should ensure, and something that new technologies as well as reporting and data standards are already enabling.

Furthermore, government regulators should set clear criteria for allowing MFIs to mobilize savings for on-lending to the poor; this would allow for a large measure of financial independence amongst well-managed MFIs. Each Indian state could consider forming a multi-party working group to meet with microfinance leaders and have a dialogue with them about how the policy environment could be made more supportive and to clear up misperceptions.
There is an opportunity to make a real dent in hard-core poverty through microfinance. By unleashing the entrepreneurial talent of the poor, we will slowly but surely transform India in ways we can only begin to imagine today.

 The impressive recent growth of certain sectors of the Indian economy is a necessary but insufficient condition for the elimination of extreme poverty.

In order to ensure that the poorest benefit from this growth, and also contribute to it, the expansion and improvement of the microfinance sector should be a national priority. Studies suggest that the impact of microfinance on the poorest is greater than on the poor, and yet another that non-participating members of communities where microfinance operates experience socio-economic gains ? suggesting strong spillover effects. Moreover, well-managed microfinance institutions (MFIs) have shown a capacity to wean themselves off of subsidies and become sustainable within a few years.

Microfinance is powerful, but it is clearly no panacea. Microfinance does not directly address some structural problems facing Indian society and the economy, and it is not yet as efficient as it will be when economies of scale are realized and a more supportive policy environment is created.

Loan products are still too inflexible, and savings and insurance services that the poor also need are not widely available due to regulatory barriers.

Still, microfinance is one of the few market-based, scalable anti-poverty solutions that is in place in India today, and the argument to scale it up to meet the overwhelming need is compelling. According to Sa-Dhan, the overall outreach is 6.5 million families and the sector-wide loan portfolio is Rs 2,500 crore.

However, this is meeting only 10% of the estimated demand. Importantly, new initiatives are expanding this success story to the some of the country's poorest regions, such as eastern and central Uttar Pradesh.

The local and national governments have an important role to play in ensuring the growth and improvement of microfinance. First and foremost, the market should be left to set interest rates, not the state. Ensuring transparency and full disclosure of rates including fees is something the government should ensure, and something that new technologies as well as reporting and data standards are already enabling.

Furthermore, government regulators should set clear criteria for allowing MFIs to mobilize savings for on-lending to the poor; this would allow for a large measure of financial independence amongst well-managed MFIs. Each Indian state could consider forming a multi-party working group to meet with microfinance leaders and have a dialogue with them about how the policy environment could be made more supportive and to clear up misperceptions.
There is an opportunity to make a real dent in hard-core poverty through microfinance. By unleashing the entrepreneurial talent of the poor, we will slowly but surely transform India in ways we can only begin to imagine today.