A

SYNOPSIS

ON

MICROFINANCE

AT

AXIS BANK LTD

A Project report submitted to Osmania University

In partial fulfillment for the Award of the Degree of

MASTER OF BUSINESS ADMINISTRATION

Submitted by

MALREDDYGARI HARIKA

HT NO: 2121-19-672-105

UNDER THE GUIDANCE OF

---------------------------------------

ARISTOTLE PG COLLEGE

(Affliated To Osmania University,Hyderabad)

Recognized By UGC under section 2(f) of UGC Act 1956

Beside Moinabad Police Station,

Chilkur, Moinabad ,Ranga Reddy District, Telangana.

2019-2021
INTRODUCTION:

Microfinance, as a concept and service offering many products has seen many changes in the
development which can be traced back to 1970 and 1980. After independence and until late
70‘s, Financial assistance to the borrowers in unorganized sector inclusion was a business
only by government through subsidised schemes for rural development. It became very
famous during 80‘s only when the Grameen Bank proved that companies can also be
profitable by giving out the loans and other financial services to the poor women, but now, it
has become the world‘s biggest mechanism in disbursing the loan and credit services to the
poor. It can also be understood that the MFIs emergence as a service-market offering
financial products profitably are in line with the works by Praha lad who emphasises the size
of market at the bottom of pyramid. It was only credit synonym with ―Microfinance, during
1970‘s but now it is a combination of credit, services, insurance, skill upgradation, training
and other financial and non-financial services is brought under the brand umbrella of MFIs.
Microfinance is defined as any activity that includes the provision of financial services such
as credit, savings, and insurance to low income individuals which fall just above the
nationality defined poverty line, and poor individuals which fall below that poverty line. With
the goal of creating social value. The creation of social value includes poverty alleviation and
the broader impact of improving livelihood opportunities through the provision of capital for
micro enterprise, and insurance and savings for risk mitigation and consumption smoothing.
A large variety of sectors provide microfinance in India, using a range of microfinance
delivery methods. Since the ICICI Bank in India, various actors have endeavoured to provide
access to financial services to the poor in creative ways. Governments also have piloted
national programs, NGO’s have undertaken the activity of raising donor funds for on-lending,
and some banks have partnered with public organizations or made small inroads themselves
in providing such services. This has resulted in a rather board definition of microfinance as
any activity that targets poor and low-income individuals for the provision of financial
services. The range of activities undertaken in microfinance include group lending, individual
lending, the provision of savings and insurance, capacity building, and agricultural business
development services. Whatever the form of activity however, the overarching goal that
unifies all actors in the provision of microfinance is the creation of value.
MF loans in India range in size from $100 to $500 per loan with interest rates typically
between 18% and 25% annually by MFIs and much below by banks i.e. 15 to 20%. The MF
model is designed specifically to help the low income population overcome typical
challenges such as illiteracy, lack of financial knowledge and deficiency of collateralizable
assets. At the same time, the model takes advantage of existing community support systems
and networks to encourage financial discipline and ensure high repayment rates with an aim
of creating social value. The creation of social value includes poverty alleviation and the
broader impact of improving livelihood opportunities through the provision of capital for
microenterprise, and insurance and savings for risk mitigation and consumption smoothing.

A large variety of actors provide MF in India, using a range of MF delivery methods.

Governments have piloted national programs, NGOs have undertaken the activity of raising
donor funds for on-lending, and some banks have partnered with public organizations or
made small inroads themselves in providing such services.

The range of activities undertaken in microfinance include group lending, individual lending,
the provision of savings and insurance, capacity building, and agricultural business
development services. Whatever the form of activity however, the overarching goal that
unifies all actors in the provision of microfinance in the creation of social value.

Microfinance Definition:

According to labour organization [LIO], “MICROFINANCE IS AN ECONOMIC

DEVELOPMENT APPROACH THAT INVOLVES PROVIDING FINANCIAL
SERVICES THROUGH INSTITUTIONS TO LOW INCOME CLIENTS”.

In India, microfinance has been defined by “The National Microfinance Taskforce, 1999” as
“provision of thrift, credit and other financial services and products and of very small
amounts to the poor in rural, semi-urban or urban areas for enabling them to raise their
income levels and improve living standards” .

“The poor stay poor, not because they are lazy but because they have no access to capital”.

The dictionary meaning of ‘finance ‘is management of money. The management of money
denotes acquiring & using money. Microfinance is buzzing word, used when financing for
micro entrepreneurs. Concept of Microfinance is emerged in need of meeting special goal to
empower under- privilege class of society, women, and poor, downtrodden by natural reasons
or men made; caste, creed, religion or otherwise. The principal of microfinance are founded
on the philosophy of cooperation’s and its central values of equality, equity and mutual self-
help. At the heart of these principles are the concept of human development and the
brotherhood of man expressed through people working together to achieve a better life for
themselves and their children.

Traditionally microfinance was focused on providing a very standardized credit product. The
poor, just like anyone else, [in fact need like thirst] need a diverse range of financial
instruments to be able to build assets, stabilize consumption and protect themselves against
risks. Thus, we see a broadening of the concept of micro finance--- our current challenge is to
find efficient and reliable ways of providing a richer menu of microfinance products. Micro
Finance is not merely extending credit, but extending credit to those who require most for
their and family’s survival. It cannot be measured in term of quantity, but due weightage to
quality measurement. How credit availed is used to survive and grow with limited means.

The definitions of Microfinance have seen changes from various institutions and authors in
the time line. Microcredit and microfinance are often confused. Because the MFIs in the early
stages offered micro credit, but later they have seen the development in offering more
services. The paradigm has been changing rapidly because of the commercial nature of
industry and competition. All the services of MFIs are today extended to a new group of
people who belong to the lower income group.
CHAPTER-II
REVIEW OF LITERATURE:

The basic idea of microfinance is to provide credit to the poor people who otherwise
would not have access to credit services. Micro-credit programme extend small loans to very
poor people for self-employment projects that generate income and allow them to take care
for themselves and their families. This programme is working in many developing countries.
There is no dearth of literature related to microfinance. In order to find the impact of
microfinance programme, impact assessment studies have been done by many authors in
different countries like Bangladesh, India, Pakistan, Nepal, Thailand, Ghana, Rwanda, Peru
and many other countries of South Asia and Africa. The literature on microfinance offers a
diversity of findings relating to the type and level of impact of the programme. There are
various studies which confirm that microfinance programme has a significant positive impact
in increasing employment and reducing poverty. A number of studies show that the
participant households enjoy higher standard of living as compared to the non-participants.
The programme reduces consumption as well as income vulnerability among its beneficiaries.
Some of the studies also confirm that the programme is helpful in attaining millennium
development goals by reducing poverty, hunger, infectious diseases and through women
empowerment. There are a number of studies which explain that participation in the
programme has led to greater levels of women empowerment in terms of increase in
knowledge, self-confidence, economic, social and political awareness, mobility, development
of organisational skills etc.

However, some of the studies show that the programme is not reaching the bottom
poor people and the group loans are utilised for non-income generating activities such as
consumption and other emergency needs. The studies also show that the women participants
have limited control over the use of group loans, therefore, the programme results in limited
empowerment of women participants. Thus the literature on microfinance provides mixed
results about the impact of microfinance programme on the programme participants. The
review of impact assessment studies provides valuable insights into the benefits and
drawbacks associated with microfinance programme. Some important studies which are
relevant to the present study have been discussed below:
 Sheokand (2000) discussed the evolution of Indian banking and its failure to provide
credit facilities to poor people. NABARD started Self Help Group – Bank Linkage
Programme in 1992, which was considered as a landmark development in banking with the
poor. It was observed that Regional Rural Banks’ security-oriented individual banking system
was replaced by the delivery of credit to focused groups. According to him the government
sponsored programmes had occupied much of the economic space but did not achieve the
objective of alleviating poverty. Self Help
Group- Bank Linkage Programme had been proved very successful for the socio-economic
empowerment of hard core poor, providing financial services to them and preparing them to
take up economic activities for poverty alleviation. Although this programme was not a
panacea for the problems of rural poverty, yet it had the potential for becoming a permanent
system of rural lending in the country with full participation from the formal banking system
and without any interference from the government.

Gurumoorthy (2000) explained the Self Help Group (SHG) as a viable alternative to achieve
the objectives of rural development and to get community participation in all rural
development programmes. It was an organised set up to provide micro-credit to the rural
women on the strength of the group savings without insisting on any collateral security for
the purpose of encouraging them to enter into entrepreneurial activities and for making them
enterprising women.

Rutherford (2000) and Armendariz & Morduch (2005) explained the difference between
microfinance and micro-credit. Micro-credit referred specifically to small loans given to the
poor people but microfinance was a broader term embraced efforts to collect savings from
low-income households, provide consumption loans and insurance along with micro-credit. It
also helped in distributing and marketing clients’ output. Microfinance embraced a range of
financial services that seek to meet the needs of poor people, both protecting them from
fluctuating incomes and other shocks and helping to promote their incomes and livelihood.
Fisher and Sriram (2002) explained that the financial sector developed in India by the end
of 1980s was largely supply and target driven. The government sponsored poverty alleviation
schemes experienced poor recovery rates with miss-utilisation of subsidy and lack of
observation of repayment ethics. The repayment rate under the Integrated Rural Development
Programme (IRDP) remained less than one-third and the programme created about 40 million
bank defaulters. In 1989, with the first official loan waiver, credit discipline was thrown to
the wind. This created cynicism amongst bankers about the credit worthiness of poor people.
Also, a dominant perspective was developed that the finance for rural poor people was a
social obligation and not a potential business opportunity. Gaiha et al. (2001) in a study
concluded that larger sections among the poor were not covered in the two major anti-poverty
programmes (Rural Public Works and IRDP) in India and the impact of these programmes
was limited due to their gross miss-targeting and selection of non-poor as participants.
CHAPTER-II

RESEARCH METHODOLOGY
NEED OF THE STUDY:

“The study of Microfinance in India with special reference to Share Microfin”.

India is one of the highly populated countries in the world currently. Reason being
unawareness, illiteracy, avoidance or disinterest; in turn leading to economic downfall and
almost 30-35% of the people are under the Below Poverty Line (BPL). These people are not
even able to meet their consumption need. Therefore there is a need of a tool that not only
serves them but also make them self capable, Microfinance is such an approach that would
result in the better standard of living for them.

SCOPE OF THE STUDY:

The present research was to study the critical study of self-help groups. Hence it is necessary
to work in this area. This would be of great help to the the overall empowerment of women
& men. The knowledge on these aspects could be used to develop strategies to motivate self-
help group members for their enhanced participation in the group. The outcome of the study
would suggest the factors that are responsible for the good performance of self-help groups
formed by Government and Non-Government organization. Further the study would highlight
the role and importance of micro-credit, microfinance institution; role of government and
self-help groups in offering micro-credit. The results of this study would offer important
input to planners, policy maker, Non-governments organizations for framing policies to
empower the women through self-help groups. The success of the programmes depends upon
its critical study of self-help group. Hence attempts have also been made to find out the
benefits attained after implementation of self-help groups and effectiveness made under this
study. The study also surveys the problem faced by the members of the groups. The findings
of which can be used for planning programmes and better strategies can be evolved based on
the results for the effective functioning of self-help groups.
OBJECTIVES OF THE STUDY:

1. To study the concept and importance of micro finance

2. The objective of this study is to an overview of Microfinance Industry in India.

3. To study the microfinance services offered by AXIS bank.

4. To know the different Products and Services offered by the AXIS BL

5. Need of microfinance services, different types of micro financial products that are
available in India and supply and demand of services
METHODOLOGY OF THE STUDY:

The methodology adopted to study and collect information regarding the study is as follows:
Sources of Data
I. Primary Data
II. Secondary Data

❖ Primary Data
a) The primary data is collected by the personal discussion with head of the
planning department in SBL
❖ Secondary Data
The Secondary Data was collected from the different sources. Which are as follows :
➢ Company profile/ reports/ records.
➢ Website
➢ Books, journal’s & other materials

The study is purely theoretical; no primary data collection was required for the project.

LIMITATIONS OF THE STUDY:

➢ The data is collected for calendar year not for financial year.
➢ The data for the study considered is for the 4 years, so analysis is restricted to the
period only
➢ Major limitation is for the time duration of the project that is 45 days.
➢ Study was focused mostly on SBL.
 CHAPTER-IV
COMPANY PROFILE

Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire
spectrum of financial services to customer segments covering Large and Mid
Corporates, SME, Agriculture and Retail Businesses.

The Bank has a large footprint of 1887 domestic branches (including extension
counters) and 10,363 ATMs spread across 1,139 centres in the country as on 31st
December 2012. The Bank also has 7 overseas branches / offices in Singapore, Hong
Kong, Shanghai, Colombo, Dubai, DIFC - Dubai and Abu Dhabi.

Axis Bank is one of the first new generation private sector banks to have begun
operations in 2094. The Bank was promoted in 2093, jointly by Specified
Undertaking of Unit Trust of India (SUUTI) (then known as Unit Trust of India),Life
Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC),
National Insurance Company Ltd., The New India Assurance Company Ltd., The
Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The
shareholding of Unit Trust of India was subsequently transferred to SUUTI, an entity
established in 2003.

With a balance sheet size of Rs.2,85,628 crores as on 31st March 2012, Axis Bank is
ranked 9th amongst all Indian scheduled banks. Axis Bank has achieved consistent
growth and stable asset quality with a 5 year CAGR (2007-12) of 31% in Total
Assets, 30% in Total Deposits, 36% in Total Advances and 45% in Net Profit.

The Corporate Office of Axis Bank is located at Axis House Mumbai. Axis House has
received the ‘Platinum’ rating awarded by the US Green Building Council for its
environment friendly facilities and reduction of carbon emission.

SUBSIDIARIES

The Bank has set up six wholly-owned subsidiaries:

 Axis Securities and Sales Ltd. (Since renamed Axis Capital Ltd.) 
 Axis Private Equity Ltd
 Axis Trustee Services Ltd.
 Axis Asset Management Company Ltd. 
 Axis Mutual Fund Trustee Ltd. 
 Axis U.K. Ltd.

PROMOTERS:

UTI Bank Ltd. has been promoted by the largest and the best Financial Institution of
the country, UTI. The Bank was set up IN 2093 with a capital of Rs. 116crore, with

 UTI contributing Rs. 100crore,

 LIC - Rs. 7.5 crore
 GIC and its four subsidiaries contributing Rs. 1.5 crore each.
Axis Bank is today one of the most competitive and profitable banking franchisein
India. Which can be clearly seen by an analysis of its comprehensive portfolio of
banking services including Corporate Credit, Retail Banking, and Business Banking,
Capital Markets, Treasury and International Banking.

CAPITAL STRUCTURE

The Bank has authorized share capital of Rs. 500 crores comprising 500,000,000
equity shares of Rs.10/- each. As on 31st March, 2012 the Bank has issued,
subscribed and paid-up equity capital of Rs. 413.20 crores, constituting 413,203,952
shares of Rs. 10/- each. The Bank’s shares are listed on the National Stock Exchange
and the Bombay Stock Exchange. The GDRs issued by the Bank are listed on the
London Stock Exchange (LSE).

DISTRIBUTION NETWORK

The Bank has a network of 1887 domestic branches (including extension counters)
and 10,363 ATMs across the country, as on 31st December 2012, the network of Axis
Bank spreads across 1,139 cities and towns, enabling the Bank to reach out to a large
cross-section of customers with an array of products and services. The Bank’s
overseas network consists of 4 branches in Singapore, Hong Kong, 

DIFC – Dubai and Colombo and 3 Representative offices at Shanghai, Dubai, and
Abu Dhabi.
BUSINESS DESCRIPTION

The Bank's principal activities are to provide commercial banking services which include
merchant banking, direct finance, infrastructure finance, venture capital fund, advisory,
trusteeship, forex, treasury and other related financial services.

CORPORATE PROFILE

Axis Bank is the third largest private sector bank in India. Axis Bank offers the entire
spectrum of financial services to customer segments covering Large and Mid Corporates,
SME, Agriculture and Retail Businesses.

The Bank has a large footprint of 1787 domestic branches (including extension counters) and
10,363 ATMs spread across 1,139 centres in the country as on 31st December 2012. The
Bank also has 7 overseas branches / offices in Singapore, Hong Kong, Shanghai, Colombo,
Dubai, DIFC - Dubai and Abu Dhabi.

Axis Bank is one of the first new generation private sector banks to have begun operations in
1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of
India (SUUTI) (then known as Unit Trust of India),Life Insurance Corporation of India
(LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The
New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India
Insurance Company Ltd. The shareholding of Unit Trust of India was subsequently
transferred to SUUTI, an entity established in 2003.

With a balance sheet size of Rs.2,85,628 crores as on 31st March 2012, Axis Bank is ranked
9th amongst all Indian scheduled banks. Axis Bank has achieved consistent growth and stable
asset quality with a 5 year CAGR (2007-12) of 31% in Total Assets, 30% in Total Deposits,
36% in Total Advances and 45% in Net Profit.

The Corporate Office of Axis Bank is located at Axis House Mumbai. Axis House has
received the ‘Platinum’ rating awarded by the US Green Building Council for its
environment friendly facilities and reduction of carbon emission.
 CHAPTER-V

CHAPTERIZATION
CHAPTERIZATION
CHAPTER-1
INTRODUCTION
CHAPTER-2
REVIEW OF LITERATURE
CHAPTER-3
RESEARCH METHODOLOGY
 NEED OF THE STUDY
 OBJECTIVES OF THE STUDY
 SCOPE OF THE STUDY
 DATA COLLECTION
 LIMITATIONS
 STATISTICAL TOOLS
CHAPTER-4
INDUSTRY/COMPANY PROFILE
CHAPTER-5
DATA ANALYSIS
CHAPTER-6
FINDINGS
CHAPTER-7
SUGGESTION & CONCLUSION
BIBLIOGRAPHY
ANNEXURES