"Based on the interim report, we have decided to set up two funds - Financial Inclusion Fund and Financial Inclusion Technology Fund of Rs 500 crore each," finance minister P Chidambaram said at a conference on microfinance.

The government will implement the recommendations of the committee, when it submits the final report, he added.

The government has already set up a Rs100-crore microfinance development fund, the finance minister said, adding, there is no clarity on the government''s role in microfinance.

"It is not yet clear what the government should do, what the government shouldn''t do, what should the government regulate and what it shouldn''t regulate," he said.

The government has introduced a micro finance bill in parliament to regulate non-profit microfinance institutions.

Chidambaram also said that although the goal of all microfinance institutions is the same - that to provide credit to the poor, organisations operate on different principles.

Organisations which operate for profits want interest rates to be higher so as to recover the costs, he specified.
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