RESEARCH PROPSAL:

Center of
Management Studies
Dharamsinh Desai
University

Management Research
Project

On

Guided by:
Prof. Falguni Pandya.

Prepared by: Submitted

To:
Mohil S. Jain (1233) CMS
MBA – 3RD SEM-Finance. Dharamsinh
Desai University.

TITLE OF THE PROJECT: From Microfinance to Micro insurance

“A new Approach to sustaining and Financing Rural Community.”

PROBLEM STATEMENT:

Will Microfinance and Micro insurance both be able to make sustainable growth in
rural-semi urban areas?
Find out the key challenging factors & opportunities and roll of NBFCS/NGOS and
GOVT. in both sectors.

RATIONAL FOR THE STUDY:

There is growing interest in microfinance as one of the avenues to enable

low income population to access financial services. India with a population of
around 300 million poor people has emerged as a large potential opportunity for
the microfinance sector. With only 48% of the population accessing financial
services, expanding the microfinance sector is also important from the perspective
of financial inclusion (World Bank, 2008). Since 2004, the Reserve Bank of India
(RBI) has emphasized financial inclusion as an important goal.

In spite of the impressive figures, the supply side of microfinance in

India is still presently grossly inadequate to fill the gap between demand and
supply but it holds the promise to act as a great opportunity for the financial sector
and the economy as a whole. Although some 10,000 organizations are involved in
microfinance already, they are not even close to meet the tremendous demand for
low scale financial services. This sector is still widely neglected by for profit
investors and traditional bankers.

According to India’s Insurance Regulatory and Development Authority, life

insurers sold 14.7 million micro-insurance policies in the 2008-2009 fiscal years.
This resulted $53 million in new business premium. But in a country with a
population of over 1.1 billion, there’s still a lot of the market to reach … and this is
true in many parts of the world. In India as well as parts of Africa, South America
and Asia, there is great demand for insurance in markets where there is limited
competition.

The 100 Country Landscape Report on micro-insurance estimates the micro-

insurance market is 1 billion people, with less than a 3 percent penetration. Micro-
insurance protects the assets of low-income individuals by insuring their lives and
means of livelihood. But it’s not a charity — it is a viable business opportunity for
insurers. With the margins from sale of unit linked insurance products (ULIP)
shrinking after the recent guidelines by the Insurance Regulatory and Development
Authority (IRDA), insurance companies might look at micro insurance as a
potential area for growth.

From today I am seeing a huge oppurnities in these two sectors so that I am

interested to do my MRP on these two sectors. I am sure that it will help me not
only getting a good job but also give me good experience and knowledge

OBJECTIVES:

The main objective of the study is to obtain a comprehensive knowledge of

the performance of MFIs, find out the social and economic benefits and the
downsides of MFIs being financed by Indian Bank. The aim is partly to find
out what is really happening at large level. It is also to try and look at what
can be done, exploring factors that contribute to positive and negative
outcomes, and to consider what can be done to optimize the benefits or to
avoid or mitigate the downsides.

1) How can the cost of regulation and supervision be minimized, and at the same
time high quality services be ensured?

2) Which types of institutions are favored or hindered by the present regulatory

Framework?

3) To find out success/failure of different models in Microfinance and future scope

of these models in India. How one model is different from other and how much
they are successful in the market & reasons for that.

4) In Micro insurance the overall in depth study of Health and Life Insurance
sector.

5) The roll of NBFCS and NGOS in both Microfinance and Micro Insurance sectors.

6) Co-relation of MFIS and Insurance cos. and their impact on rural and semi
urban area of India.

7) To find out what is the impact of The Govt. rules n regulation on MFIS and
micro insurance cos.

8) What is the Financing pattern and interest rates of different MFIS? Also how
they recover their money?

9) To find out the overall future growth/scope & sustainability in both sectors.

10) To find out new product development for microfinance: Evaluation and
preparation.

11) To identify issues that trigger transformation of microfinance organizations

(MFO) in India

LIMITATIONS:

1) Sample size is less

2) As my project is based on primary as well as secondary data its contains
limitation of both.

3) Time constraint is another limitation to the study.

SAMPLE SIZE:

20- MFIS and MICS.

100- Individuals Clients.

SELECTION OF MFIS AND MICROINSURANCE COS. ,APPROACH AND

METHODOLOGY

A random sampling technique was used to select MFIs. The study employed a
combination of qualitative methods and the data collected both from primary and
secondary sources

METHODOLOGY:

The sections in the pages overleaf describe the methodology for each key task that
will be undertaken to meet the requirements of the assignment.

1. Meeting with the officials of NBFCS, MFIS, MICS and CLIENTS of them.

In the inception phase, a meeting will be held with the key officials of all of the
above. In this meeting, I will discuss about the requirements for the assignment,
the work plan, the expected deliverables and the associated timelines, reporting
schedules, etc and finalized the same.

2. Secondary Research

Secondary data will be collected from the Reports and administrative guidelines of
the all above. Apart from these, books, journals, seminar papers, websites, etc.
also formed the sources for the collection of secondary data for the study. The
necessary primary and secondary data in respect of this study will be also collected
from the functionaries at various levels.

3. Survey Tool

Based on secondary research and interaction with key officials, the following data
collection tools are developed:
 1. Semi-Structured Interviews will conduct with the clients to find out how they
are satisfied with MFIS and MICS and their suggestions. ( Questionnaire )
2. Unstructured Interview Schedules will used to elicit information from the
MFIS,MICS,NBFCS officials

4. Familiarization Visits

Preliminary field visits to Rural Area with an objective to assess the SHG situation
and pilot test data collection formats. Based on the inputs from various
respondents, data collection formats were revised.

5. Primary Research

The primary data will be collected by personal interviews with key respondents.
The data collected with the help of schedules were separately compiled for every
information sought on various aspects of MFIS and MICS functioning, activities
undertaken, results produced, opinions held, etc. The opinion of Branch Manager of
the NBFCS and officials who will directly in contact with the SHG women with
regard to the choice of group / individual mode of financing was obtained through
a structured questionnaire.

ACTIVITY FIELDS:

This document ends by proposing five activity fields for the future:

(1) Development of a framework for micro insurance

(2) Analysis of lessons from microfinance

(3) Empirical analysis of regulatory environments and

(4) Networking.