Microfinance institutions (MFIs) provide vital financial services to the economically deprived members of the society.  Microfinance sector is a growing industry with many MFIs operating in the country. Large amount of grants and funds entering the microfinance sector and involvement with the poor and their money, warrant a high level of transparency of operations of MFIs by way of sound accounting and financial reporting by MFIs. Therefore, to address this need, the Research Committee of the Institute of Chartered Accountants of India has issued a new publication ‘Technical Guide on Accounting for Microfinance Institutions’. The publication primarily provides an accounting and financial reporting framework for the presentation of true and fair view of the state of affairs and the operating results of the activities of MFIs in their financial statements.

In this publication, guidance has been provided regarding the application of the Accounting Standards formulated by the Institute of Chartered Accountants of India. It has also recommended the formats of financial statements for MFIs and the disclosures of relevant non-financial information by MFIs.

The preparers and the auditors of financial statements of MFIs would find this publication useful for addressing the accounting issues involved in the microfinance sector.