MICRO FINANCE: Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers

and the self-employed, who traditionally lack access to banking and related services. More broadly, it is a movement whose object is "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers."[1] Those who promote microfinance generally believe that such access will help poor people out of poverty. Poor people borrow from informal moneylenders and save with informal collectors. They receive loans and grants from charities. They buy insurance from state-owned companies. They receive funds transfers through formal or informal remittance networks. It is not easy to distinguish microfinance from similar activities. It could be claimed that a government that orders state banks to open deposit accounts for poor consumers, or a moneylender that engages in usury, or a charity that runs a heifer pool are engaged in microfinance. Ensuring financial services to poor people is best done by expanding the number of financial institutions available to them, as well as by strengthening the capacity of those institutions. In recent years there has also been increasing emphasis on expanding the diversity of institutions, since different institutions serve different needs. Some principles that summarize a century and a half of development practice were encapsulated in 2004 by Consultative Group to Assist the Poor (CGAP) and endorsed by the Group of Eight leaders at the G8 Summit on June 10, 2004:[5] 1. Poor people need not just loans but also savings, insurance and money transfer services. 2. Microfinance must be useful to poor households: helping them raise income, build up assets and/or cushion themselves against external shocks. 3. "Microfinance can pay for itself."[8] Subsidies from donors and government are scarce and uncertain, and so to reach large numbers of poor people, microfinance must pay for itself. 4. Microfinance means building permanent local institutions. 5. Microfinance also means integrating the financial needs of poor people into a country's mainstream financial system. 6. "The job of government is to enable financial services, not to provide them."[9] 7. "Donor funds should complement private capital, not compete with it."[9] 8. "The key bottleneck is the shortage of strong institutions and managers."[9] Donors should focus on capacity building. 9. Interest rate ceilings hurt poor people by preventing microfinance institutions from covering their costs, which chokes off the supply of credit. 10. Microfinance institutions should measure and disclose their performance ± both financially and socially. Microfinance is considered as a tool for socio-economic development,and can be clearly distinguished from charity. Families who are destitute, or so poor they are unlikely to be able to

Low Cost/Cheap Products: This is a common strategy widely adopted by manufacturing and marketing concerns wherein the price can be kept low by low unit packing like paisa pack of tea. thus expanding its market . prioritize and tackle the problems they face in their socio economic environment. SHGs comprise homogeneous groups of poor people who have voluntarily come together mainly with the idea of overcoming their common problems of low social and economic status. 1. PRICING STRATEGIES: Pricing strategies are linked to product strategies. as many as 458591 groups were credit linked. which is called credit linkage. E. Refill Packs/Reusable Packaging: Health drinks available in the urban areas. coffee & many other consumer goods re available in refill or reusable packages. NABARD's SHG Bank Linkage Programme boasts of over 26 lakh SHGs and 3. The containers can be put to multipurpose uses. By pooling their meager resources and using them for lending among themselves. the SHG Bank linkage programme started as a pilot project in 1992 with 500 SHGs. before getting mature enough to access a loan from banks. they develop the habit of thrift and the skill of credit appraisal. Self Help Groups (SHGs): One of the major success stories of NABARD.9 crore households influencing the lives of over 16 crore poor population. which can have a significant impact in the rural market. Today. to collectively identify. Soya protein is being used instead of milk protein.generate the cash flow required to repay a loan. Others are best served by financial institutions. shampoo sachets. Starting with small loans for consumption they soon graduate to bigger loans for setting up of income generating microenterprises. Milk protein is expensive whereas Soya protein is cheaper.g. The product packaging and presentation also keeps the price low to suit the rural consumer. etc. tea. The nutrition content of both being the same. The basic aim being to reduce the value of the product so it becomes affordable to a larger segment. During the year 2006-07 alone. SHGs enable the poor. 3. should be recipients of charity. 2. Application of Value Engineering: In the food industry. especially the women from the poor households.

Kacha roads become unserviceable during the monsoon and interior villages get isolated. ITC aims to confer the power of expert knowledge on even the smallest individual farmer.000 ‡ Farmers to be e-empowered: 10 million Through the e-Choupal initiative. The presence of too many tiers in the distribution system increases the cost of distribution.India average of 52%. Seasonal Demand Demand for goods in rural markets depends upon agricultural situation. Transportation Many rural areas are not connected by rail transport. The literacy level is as low (36%) when compared to all. Thus enhancing his .at a glance Milestones Commencement of initiative: 2000 ‡ States covered: 9 ‡ Villages covered: 40. Agriculture to a large extent depends upon monsoon and.level wholesaler or preferred dealer.000 ‡ e-Choupals to be installed: 20. the demand or buying capacity is not stable or regular. distributor or stockiest at district level and company-owned depot or consignment distribution at state level. as agriculture is the main source of income.Challenges in Rural Marketing Though rural markets are a huge attraction to marketers.000 ‡ e-Choupal installations: 6500 ‡ Empowered e-farmers: 4 million Agenda for 2012 ‡ States to be covered: 15 ‡ Villages to be covered: 1. therefore. it is not easy to enter the market and take a sizeable share of the market. Mandal/ Taluka. Distribution An effective distribution system requires village-level shopkeeper. Low Literacy There are not enough opportunities for education in rural areas.00. in the short time due to the following reasons. Communication Problems e-Choupal .

excessive dependence on the monsoon. making it difficult for the farmer to sell his produce in the world market. in the process facilitating access to higher quality farm inputs at lower costs for the farmer. variations between different agro-climatic zones. In the very first full season of e-Choupal operations in Madhya Pradesh. The immense potential of Indian agriculture is waiting to be unleashed. the lead farmer of the village. Given the low levels of literacy in the rural sector.5 million farmers. browsing the eChoupal website. productivity and improved price discovery. which has more than doubled since then. By 2012. Farmers now log on to the site through Internet kiosks in their villages to order high quality agri-inputs. get information on best farming practices. The result marks the beginning of a transparent and cost-effective marketing channel. thereby better aligning farm output to market demands. prevailing market prices for their crops at home and abroad and the weather forecast ± all in the local language. The unfortunate result is inconsistent quality and uncompetitive prices. Online transactions are captured to reward farmers for volume and value of usage. The e-Choupal initiative also creates a direct marketing channel. numerous intermediaries. These pose their own challenges to improving productivity of land and quality of crops.000 villages.000 tons of their produce through the e-Choupal Internet platform. ITC¶s trail-blazing answer to these problems is the e-Choupal initiative. Transforming the Indian farmer into a progressive knowledge-seeking netizen.com website. The model helps aggregate demand in the nature of a virtual producers' co-operative. elevating him to a new order of empowerment. thus reducing transaction costs and making logistics efficient. the e-Choupal network will cover over 100. the single-largest information technology-based intervention by a corporate entity in rural India. For the first time. Bringing prosperity to the farmers' doorstep. e-Choupal delivers real-time information and customised knowledge to improve the farmer's decisionmaking ability. in facilitating physical interface between the computer terminal and the farmers is central to project e-Choupal. Linking farmers to remunerative markets . the role of the Choupal Sanchalak. The e-Choupal project is already benefiting over 3. A digital transformation ITC began the silent e-volution of rural India with soya growers in the villages of Madhya Pradesh. soya farmers sold nearly 50. the stereotype image of the farmer on his bullock cart made way for the e-farmer. and create more than 10 million e-farmers. among many others. The endemic constraints that shackle this sector are well known ± fragmented farms. weak infrastructure. securing better quality. eliminating wasteful intermediation and multiple handling.competitiveness in the global market. representing 1/6th of rural India. Smart Cards enable farmer identification to provide customised information on the echoupal. Enriching the farmer with knowledge.

They were haunted by the nightmare of contaminated soil. Enter ITC's eChoupal intervention. The new storage and handling system preserves the identity of different varieties right through the 'farm-gate to dinner-plate' supply chain. any of which could wipe out an entire shrimp crop. Thereafter. Making it economically much more attractive. benefiting hundreds of aqua farmers. Though these grades had the potential to meet diverse consumer preferences. Managing risks through technology The whats and ifs in the aqua farmers' life posed daunting odds. the benefit never trickled down to the farmers. Its sophisticated laboratory detects the deadly White Spot virus in the shrimp seed and advises farmers on appropriate remedial action. ITC has set up VSAT links to overcome connectivity problems. has revolutionised the concept of shrimp seed testing. All these factors help to neutralise the risks involved in aqua farming. Andhra Pradesh. sanitised dressing and air-tight packing. The site also provides farmers with specialised knowledge for customising their produce to the right consumer segments. producing grains of varying grades. Encouraging the farmers to raise their quality standards and attract higher prices. Information equips farmers with comprehensive know-how to keep abreast of food safety norms to compete in the international market. ITC provides the farmer appropriate documentation which records the quantity and quality of his output. hygienic washing.Farmers grow wheat across several agro-climatic zones. Information includes parameters for antibiotic usage. wrong levels of salinity in the water or the killer White Spot virus. . until the e-Choupal site provided them the support and the know-how to cope with and manage such risks. Payment is instant. The e-Choupal site is now helping the farmers discover the best price for their quality at the village itself. virtual helpdesks enable the farmer to find solutions to his problems through online interactions. ITC¶s Aqua Care Centre in Kakinada. because all varieties were aggregated as one average quality in the mandis. ITC's mobile vans take the message of e-Choupal to new villages.

A dependable knowledge partner Coffee planters in India have for years been tossed between the highs and lows of the international coffee market. 'Parity Chart' and the 'Calculator' on the site convert the coffee prices quoted in international auctions into raw coffee equivalent for the benefit of the small growers in India. This success has encouraged ITC to plan its extension.com has equipped India's coffee planters with appropriate knowledge base and risk management tools. Tradersnet. price updates and prevalent trends in coffee trading were just not available to them. the wealth of information provided by aquachoupal. . a special link on the site. echoupal.In the high-risk business of shrimp farming. The site arms them with the latest prices posted on commodity exchanges like CSCE in New York and LIFFE in London. thereby enabling them to face global competition. ITC empowers Indian coffee growers with expert knowledge in logistics and risk management. Planters have access to technical analysis by experts to help them comprehend trends. traders and roasters. trading ranges and chart patterns in simple language. creating a virtual market for transparent price discovery.com has become popular among coffee growers as an effective platform for global trade. The information needed to manage risks in the volatile global coffee market. brings together a large number of coffee planters. Launch of eChoupal.com has proved a great boon for farmers in Andhra Pradesh.

as they have for thousands of years. farmers grow soyabeans. quality policy etc. one of India's largest consumer product and agribusiness companies. created by ITC. In these villages. The farmers are largely illiterate and have never seen a computer. In addition to assisting with knowledge management through the website. grading standards. ITC provides on-ground inputs to farmers on best practices." A quiet digital revolution is reshaping the lives of farmers in remote Indian villages. . A typical village has no reliable electricity and has antiquated telephone lines. wheat and coffee in small plots of land. But farmers in these villages are conducting ebusiness through an initiative called e-Choupal.

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