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Sec Presentation Micro Finance

This document summarizes a report on the growth of microfinance in India. It outlines the objectives, contents and methodology of the report. The report finds that while microfinance has grown significantly, there remains a large unmet demand and potential for further growth. Specifically, over 70% of rural Indians lack access to basic financial services. The report concludes the potential for microfinance institutions in India is very high, with the sector expected to grow at 20% annually and increase its loan outstanding from Rs. 1600 crores currently to Rs. 42,000 crores in the next five years. It suggests the government promote awareness programs and provide tax incentives to further support the growth of the microfinance sector.

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200 views16 pages

Sec Presentation Micro Finance

This document summarizes a report on the growth of microfinance in India. It outlines the objectives, contents and methodology of the report. The report finds that while microfinance has grown significantly, there remains a large unmet demand and potential for further growth. Specifically, over 70% of rural Indians lack access to basic financial services. The report concludes the potential for microfinance institutions in India is very high, with the sector expected to grow at 20% annually and increase its loan outstanding from Rs. 1600 crores currently to Rs. 42,000 crores in the next five years. It suggests the government promote awareness programs and provide tax incentives to further support the growth of the microfinance sector.

Uploaded by

kaushik168
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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A Report on Growth of

Micro-finance Sector in
India

Given By
Prof. S.
Prakash

Presented By
Kaushik Dutta
OBJECTIVE
 The objective of this report is to analyze the
growth of Microfinance sector developed in
India and see the potential for the
upcoming new Microfinance institutions in
the market.
CONTENT
S
 INTRODUCTION
 EVOLUTION OF MICROFINANCE IN INDIA
 THE PROFILE OF MICROFINANCE IN INDIA
 METHODOLOGY
 FINDINGS
 CONCLUSIONS
 SUGGESTIONS
 BIBLIOGRAPHY



INTRODUCTIO
N
Micro-Finance is emerging as a powerful instrument
for poverty alleviation in the new economy. In India,
micro-Finance scene is dominated by Self Help
Groups (SHGs) - Banks linkage Programme, aimed
at providing a cost effective mechanism for
providing financial services to the 'unreached poor'.
Based on the philosophy of peer pressure and group
savings as collateral substitute, the SHG
programme has been successful in not only
designing financial products meeting peculiar needs
of the rural poor, but also in strengthening
collective self-help capacities of the poor at the
local level, leading to their empowerment
Evolution of
Microfinance in India
Microfinance has been in practice for ages ( though
190
informally).
4 Legal framework for establishing the co - operative
movement set up.
193
4 Reserve Bank of India Act provided for the
establishment of the Agricultural Credit
Department
196
.
9
Nationalisation of banks .
197
5 Regional Rural Banks created.
197
6 Grameen Bank , Mohhamad Yunus
NABARD established as an apex agency for rural
198
finance .
2

199 Passing of Mutually Aided Co - op . Act in AP in 1995.


5
The Profile of Microfinance in
India
The scenario

 Estimated that 350 million people live Below


Poverty Line in india.
 This translates to approximately 75 million
households.
 Annual credit demand by the poor in the country
is estimated to be about Rs. 60,000 crores.
 Cumulative disbursements under all microfinance
programmes is only about Rs. 5000 crores.(Mar.
04)
 Total outstanding of all microfinance initiatives in
India estimated to be Rs. 1600 crores. (March
04)
 Only about 5 % of rural poor have access to
microfinance.

 Government promoted microfinance programmes
(Rashtriya Mahila Kosh, Velugu Project, DPIP,
Swashakti)

ØLarge scale NGO initiatives (DHAN, Maryada, CARE)


ØFinancial sector initiatives – Commercial Banks


(ICICI,Oriental Bank of Commerce, ABN AMRO,
Canara Bank,etc.) and Development financial
institutions – (HDFC,SIDBI, NABARD, etc.)

Top MFIs by Number of Active
Borrowers in india
MFI* Total # of Active Borrowers (2007)**

Spandana 916,261

Share 826,517

SKS 513,108

Bandhan 449,304

AML 416,829

Micro credit Foundation of India (MFI) 410,329

KAS 410,329

Cashpor 201,692

BISWA 200,912
METHODOLOGY
 Data have been find out by googling in different
websites and searching in different magazines
and journals.
FINDING
S
 About 56 % of the poor still borrow from
informal sources.

 70 % of the rural poor do not have a deposit
account

 87 % have no access to credit from formal
sources.

 Less than 15 % of the households have any kind
of insurance.

 Negligible numbers have access to health
insurance (0.4 %) and crop insurance (0.2 %). 

FINDINGS
 Considerable gap between demand and supply
for all financial services

 Majority of poor are excluded from financial


services. This is due to, inter-alia, the following
reasons:

 Bankers feel that it is fraught with risks and


uncertainties.

 High transaction costs



CONCLUSION
 S The potential for growing micro finance
 institutions in India is very high.
 Major cross-section can have benefit if this
sector will grow in its fastest pace.
 Annual growth rate of about 20 % during the next
five year.
 The loan outstanding will consequently grow from
the present level of about 1600 crores to
about 42000 crores.
 Annual growth rate of about 20 % can be achieved
during the next five years.

SUGGESTIO
NS
 Government should give more relaxation in
levying taxes to Microfinance institutions
 Government as well as Microfinance
institutions should promote various
awareness programmes in rural areas.

BIBLIOGRAP
HY
 www.microfinance.com
 www.microfinanceinsights.com
 www.microfinanceinfo.com
 www.rbi.com
 www.nabard.com
 www.wikipedia.com
 www.google.com
 MAGAZINES are
 Yojna, Microfinance insights, Information for
development.

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