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Tonoy Tarafdar MBA (3 Sem) Acharya'S Bangalore B-School

1. Microfinance involves providing small loans, savings, and other basic financial services to poor and low-income individuals. 2. Self-help groups are formed by 5-20 individuals from below poverty line backgrounds who make regular small savings deposits and can take loans from those savings. 3. The key goals of microfinance are to help lift over 500 million poor entrepreneurs and producers, mainly women, out of poverty and give them increased income, assets, security, and confidence for the future.

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136 views15 pages

Tonoy Tarafdar MBA (3 Sem) Acharya'S Bangalore B-School

1. Microfinance involves providing small loans, savings, and other basic financial services to poor and low-income individuals. 2. Self-help groups are formed by 5-20 individuals from below poverty line backgrounds who make regular small savings deposits and can take loans from those savings. 3. The key goals of microfinance are to help lift over 500 million poor entrepreneurs and producers, mainly women, out of poverty and give them increased income, assets, security, and confidence for the future.

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DotRev Ibs
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TONOY TARAFDAR MBA(3RD SEM) ACHARYAS BANGALORE B-SCHOOL

RISING INDIA

MICROFINANCE
Microfinance is the supply of loans, savings and other basic financial services to the poor. As the financial services of microfinance usually involve small amounts of money- small loans, small savings, etc- the term microfinance helps to differentiate these services from those which formal banks provide. Microfinance has been defined by RBI as provision of thrift, credit and other financial services and product of very small amount to the poor in a rural, semi-urban and urban areas for enabling them to raise their income levels and improve living standard.

This is a central government project which launched on 1.4.1999 main objective: to raise individual / groups of rural poor above 5 to10 persons doing same activities & poverty same line within 3 yrs & at least in the 3rd yr net income would be not less than SELF HELP standard form a joint liability is for GROUPS rupees 2000p.m. may features of the group are almost group same as this SHG here the of persons who in (below tiny business selfmembers the group will are come engaged from[SHG] the BPL poverty line) senses duly approved by gram 30% members mayliving come from APL employed persons or sabha marginal farmers in same ( above povert line) purpose of loan: economically viable & productive, area bank loan to this groups farm sector & non provide farm sector activities identified forNABARD each block with refinances 100% loan approval of panchayat samities at block.

Number of members can be between 10 to 20 but for irrigation projects minimum 5 members can form SHG. Members are the persons below poverty line. Their can be only one person from one family in one SHG. Group need to have a bank a/c. SWARNA There have to be regular fortnightly or monthly meetings. Members are toJOINT save regularly. JAYANTI Banks allow advance to SHG with repayment within 3 to 10 yrs savings are considered as LIABILITY GRAM margin and there is no requirement of collateral security. bank can also finance to the groups SWAJROJGAR GROUP through NGOs NABARD refinances 100% against this loans (national bank for rural YOGNA(SGSY) development).

MicroCredit Programme

1.

2.

3.
Better:

4.

Health 500 million poor entrepreneurs and producers, mainly women Microfinance: Lending Savings Insurance Housing Remittances Increases: Income Assets Security Confidence in future Population Education Community participation Banking for the majority

Promote microfinance as a key vehicle in tackling poverty, and as vital part of the financial system
Create policies, regulations and legal structures that encourage responsive, sustainable microfinance

Have government agencies provide retail microfinance

Encourage a range of regulated and unregulated institutions that meet performance standards
Encourage competition, capacity building and innovation to lower costs and interest rates in microfinance

Place interest rate ceilings on micro loans

Support autonomous, wholesale structures

Top five MFIs in Outreach.


Clients (Mn) 2008 2009 Growth rate % Loans (bn) 2008 2009 Growth rate %

SKS
Spandana

1.88
1.19

3.52
2.43

87
104

7.81
5.95

24.6
18.7

214
214

Share
Bandhan

1.29
0.76

1.50
1.45

16
91

7.28
2.78

12.2
5.3

67
91

Asmita

0.70

0.88

26

3.36

7.1

111

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