PRESENTED BY:

Praveen Srivastav (11300029)

Manisha Gautam (11300444)
Pankaj Attri (11300645)

FEATURES
Credit To Rural Poor
Poverty Alleviation:
Women Empowerment
Economic Growth
Mobilisation Of Savings
Development Of Skills
Social Welfare

Other Features:
It is an essential part of rural finance.
It deals in small loans.
It basically caters to the poor households.
It is one of the most effective and warranted Poverty
Alleviation Strategies.
It supports women participation in electronic activity.
It provides an incentive to grab the self employment
opportunities.
It is more service-oriented and less profit oriented.
It is meant to assist small entrepreneur and producers.
Poor borrowers are rarely defaulters in repayment of loans
as they are simple and God-fearing

CHANNELS OF MICRO FINANCE

SELF HELP GROUP -Bank Linkage
Programme:
Group Formation
Savings
Lending
Meetings
Record

 MICRO FINANCE INSTITUITION:

MFIs include NGOs, trusts, social and
economic entrepreneurs, these lend small,
sized loans to individuals or SHGs. They also
provide other services like capacity building,
training, marketing of products etc
Bank Partnership Model
Banking Facilitators

TOP 25 MFIS:

Adhikar Microfinance Pvt Ltd

ASA International India Pvt Ltd
Belstar Investment & Finance Pvt Ltd
Chaitanya India Fin Credit Pvt Ltd
Future Financial Services Ltd
Growing Opportunity Finance (India)
Pvt Ltd
Humana People to People India
IDF Financial Services Pvt Ltd
Indian Cooperative Network for
Women Ltd
M Power Micro Finance Pvt Ltd
Mahasemam Trust
Margdarshak Financial Services Ltd
Pahal Financial Services Pvt Ltd
Rashtriya Seva Samithi
Sahara Utsarga Welfare Society

Sahayog Microfinance Ltd

Saija Finance Pvt Ltd
Samhita Community Development
Services
Sanghamitra Rural Financial
Services
Sarala Women Welfare Society
Shikhar Microfinance Pvt Ltd
Uttrayan Financial Services Pvt
Ltd
Vedika Credit Capital Ltd
Village Financial Services Pvt Ltd
YVU Financial Services Pvt Ltd

PRODUCTS OF MICRO FINANCE:

MICRO SAVING
MICRO CREDIT
MICRO INSURANCE
REMITTANCES

AREA

COMMERCIAL BANKS

MICRO FINANCE INSTITUTION

Focus

Profitability , Market Share , All

segment of customer

A sustainable credit system for

economically disadvantaged
people.

Customer
Acquisition

Banks mostly enroll customer through

branches.

MFIs have stage-wise strategyvillage meetings, formal groups,

training of member of groups on
financial management and then
providing credit-line.

Products

Banks have a basket of retail product

that cover savings, credit remittance
etc. Credit from banks for BPL-like
families is predominantly of INR
25,000 and above; other features are
varied rate of interest and varied
repayment period.

MFIs specialize in credit .The

product is predominantly a
graduated credit line with
recovery by 50 week EMI.MFI
credit is predominantly an
average of INR 15,000 minimum
of INR 3,000 to maximum of INR
50,000 (housing loan up to INR
1.25 lacs.)

Cost of Capital

Average cost of Capital for

Bank is 8 percent

Average cost of capital for

MFIs is 14 %

Cost of Operation

Banks have mechanism

that cross subsidies
operating cost of several
sets of services and
products.Branch viability
and business per staff is
the strategy area of focus.
Cost-income ratio of Banks
is about 42 %.

MFIs incur high costs on

manpower. Business per
staff cannot grow beyond a
point because the quality
of customer contact is the
key to the high repayment
rate in micro-credit.MFI
operations on customer
servicing mechanisms are
reflected in cost-income
ratio of MFIs that is around
62%

Nature of Institution

Financial Institution

Service Institution

Financial Goal

Profit maximization

Surplus to sustain

COMPARISION
LOAN
INSURANCE

Bhandhan loan

ANNAPURNA MICRO FINANCE

DISHA INSURANCE

GROUP TERM LIFE INSURANCE

TATKAL BIMA

 Minimum Entry Age: 18, Maximum Entry Age:

65
Minimum Policy Term: 5 years, Maximum
Policy Term: up to 70 years of age

PERFORMACE:

FINDING
Providing microfinance may lead to high NPA.
The most common method of availing
microfinance is through forming SHG.
The normal rate of interest is higher on loan
provided by MFI.
It helps in eliminating poverty and helps poor
households to meet basic needs .

Recommendation
Try to get education loan from MFI as the rate of
interest is low .
The product of MFI cannot be directed to any
person particularly as it depends upon the need
of the person.
There should be a interest rate cap to avoid high
interest rate.
There is huge demand and supply gap in money
demand by the poor and supply by the MFI so
they need to be an active participation by private
sector industries.

THANKYOU