MICROFINAN

CE
Jijo
Mathew
08BS00013
 Microfinance?
• “ A provision of financial services to
low income level clients mainly the
self employed & women with little or
no collateral”
• Poverty eradication
• Continual recycling of funds.
 Microfinance in India
• New generation microfinance moved
in late.
• Signs of change- Nationalization of
banks, creation of new RRB’s,
NABARD & NGO’s.
• Policy changes..
– Priority sector lending
– The National Microfinance Task force,
1999
Distribution of Indebted Rural
Households: Agency wise
 Self Help Groups
• "small, economically homogenous
affinity groups of rural poor,
voluntarily formed to save and
mutually contribute to a common
fund to be lent to its members as per
the group members' decision".
• How do they operate?
• SHGs-Bank linkage models by
NABARD:
– Model -1 Banks act as SHGPI (16%)
 Microfinance Models
• MFIs
– Not for profit MFIs
– For profit MFIs
– Mutual Benefit MFIs
• Bank Partership Model
• Banking correspondents
• Service company model
 Major players in
Microfinance
• ICICI (CMFR,Center for Microfinance
research, Chennai)
• Bandhan (Poverty eradication &
women empowerment)
• SKS Microfinance
• Grameen Bank
What's Exciting about Indian
Microfinance?
• Considerable untapped market
– 350 million Below Poverty Line
– 95 % have no access to microfinance
– 36 % people still borrow from informal
sources
– 70 % don't have any deposit account
– Annual credit demand is about
Rs.70,000 crore
– 95 % of the households are without any
kind of insurance
Thank You