We refuse to recognise the moneylender as a legitimate agent of economic activity and impose phenomenal restrictions on them since they are not legitimate in the eyes of our Anglo-Saxon financial system. For instance, they can lend but not borrow money from the public in carrying on their avocation. Under the current RBI regulations, a butcher or barber or baker can borrow money and all sorts of corporate tycoons and share market operators, but not a moneylender (section 45-S of the RBI Act). A moneylender can lend but not borrow, except from relatives. In the context of safeguarding the interest of depositors, we have gone to the other extreme, which has impact on the credit markets particularly pertaining to retail trade and restaurants and petty businesses, which are dependent on moneylenders for their business activities. We have an uncanny knack of turning our strengths into weaknesses and de-legitimising the role and contribution of significant segments of our economy. This has only pushed their activity underground, since they have extensive network and substantial credibility among their constituents both borrowers and lenders. They should have the flexibility to access deposits from the public like any other financial institution. Being a lender without being a borrower from the public is like asking a teacher to only teach (output) and not read anything (input). Unless an institution accesses funds using extensive network, it will not understand the magic of the lending market. A prudential lender is one who borrows efficiently. It is actually two sides of the same coin. The global institutions are encouraged to enter into the same money-lending business with modern acronyms of micro-financing. If Washington gives a nod, it becomes the current thinking, but not our own existing strength. Banks should treat moneylenders as channel partners and provide credit to them. They can license the regular moneylender, who has the tremendous advantage of the principle of know your customer, and integrate him into the banking sector. The tremendous contribution of moneylenders to the growth of our economy should not be underestimated just because they are dhoti-clad and English illiterate and pan-chewing. Recognise them, legitimise them and consider them a source of strength and opportunity for credit channel to reach the remote parts of the country in a systematic and orderly fashion. Therein would lie our ingenuity in realising a more-than-10% growth rate, and an inclusive one at that. vaidya@iimb.ernet.in