"There are risks in every action. Every success has the seed of some failure. But it doesn't matter. It is how you go about it. That is the real challenge" – Ela R. Bhatt

Dr.Ela Bhatt, a Gandhian and lawyer, and referred to as the Mother of Microfinance (she founded Self Employed Women’s Association or SEWA in 1972), was recently appointed to the Board of Reserve Bank of India, the country’s central bank.

Post-crisis, this is a significant development for the microfinance sector in India and her appointment could not have been timelier. Dr.Bhatt has had, and continues to have profound impact on the financial sector not only in India but also globally. There is no one more deserving of this honour than she and no one better suited to champion the cause of financial inclusion.

SEWA is one of the most successful organizations for the economic empowerment of women in India. She also established SEWA Cooperative Bank in 1974. Mrs. Ela Bhatt is also a founding member of Women's World Banking, which was set up in 1979. In 1989, she was the first woman appointed to the Planning Commission in India. Mrs. Bhatt's many awards include the Right Livelihood Award and the Ramon Magsasay Award and she was named to the Elders Project by Nelson Mandela in 2007.

Here’s an excerpt from a recent interview with her.

The RBI estimates that about 50% of Indian households do not have bank accounts. Do you think this is because they do not have access or do not feel that they need accounts?
It’s a question of access and also acceptance. Formal banks are not keen to have accounts of the illiterate and semi-literate, of those small, small amounts. And it’s too much work. It’s also accessibility. There is a total lack of financial literacy.

Was the backlash against microfinance in Andhra Pradesh and in Bangladesh justified?
In many ways, it was. So far as the future is concerned, I don’t see any other way. The future of microfinance sector, as such, is not dark. One, because of women – amongst the poor, women are a big part of it. They have proved themselves everywhere.

What lessons has the sector learned and how has it changed as a result of its crises?
The poor need a full package of financial services, savings, credit, insurance — I also add housing — social security, financial literacy, pensions and counselling. If the purpose is poverty reduction, that whole package of financial services is needed.
Making profit and surplus is acceptable. It has proved that it can stand on its own. The other lessons that they have learned is that they have to think about the desired impact. They have started judging themselves in terms of impact, growth and outreach.

Read the complete interview in The New York Times