SlideShare une entreprise Scribd logo
1  sur  13
Microfinance
         in India
Its Challenges and Opportunity

                    By: Sheetal Agarwal
                         10808702
Introduction
According to International Labor Organization (ILO),
 “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 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”.
When and how was it started
It is safe to assume that current day microfinance started in
India sometime around 1980. It started as small groups
formed to help themselves or the self help groups (SHG).
Slowly the movement picked up momentum and national
bodies like the Small Industries Development Bank of India
(SIDBI) and the National Bank for Agriculture and Rural
Development (NABARD) jumped into the band wagon.
They have been devoting significant time and financial
resources to microfinance.
Its Objective
Microfinance offers financial services to underprivileged
 people.
Encourage Entrepreneurship and Self-Sufficiency
Manage Risk
Empower Women
Micro finance sector in 2011-12
Both SHG- Bank linkage program model (SBLP) and MFIs put
 together, achieve an outreach of 83.4 million clients
Saving linked SHGs increased to 7.96 million with estimated
 member base of 104 million
Credit linked SHGs were 4.36 million - 9% less than the
 previous year.
Client outreach of MFIs - 26.6 million (decline of 16 %) with
 a gross loan portfolio of Rs.209.13 billion (decline of 3%)
The average loan size of SHGs- Rs.6420; an increase of
 Rs.1527 over last year.
Average MFI loan increased by 15% over last year to Rs.7803
Development Initiatives
Focus turned towards governance and responsible finance
 practices.
Risk management becomes a post-crisis priority.
Taking advantage of technological and market
 developments.
Series of Regulatory initiatives by RBI
Greater emphasis on community based organizations
Financial Inclusion
RBIs Financial Inclusion Plan gathers momentum (99,800
 villages).
103 mn No Frill Accounts – Doubled compared to
 previous year.
Quality of inclusion a concern – compliance with RBI
 guidelines - not business interest, drives banks.
Mobile banking gaining momentum.
21.76 mn - likely to improve services on the ground.
Examples:
 The process of transformation:
 The microfinance is seen targeting the poor women who
need the funds to establish in their chosen fields. Pottery,
Agriculture and the like have women who can perform
better with a little financial assistance. They have defaulted
much lesser than their male counterparts.
 In Bangladesh, for example, it has been proved that
women default on loans less often. The credit extended to
women has a positive impact on household consumption
thereby improving the quality of life for children.
Micro finance
Challenges
• Perceived high risk of microfinance entrepreneurship and
  small business.
• High cost involved in small transaction.
• Lack of debt and equity funds for MFI to pass on to poor.
• Difficulty in measuring the social performance of MFIs
• The poor’s inability to offer marketable collateral for
  loans
• Poor institutional viability of micro enterprises
• Lack of knowledge about microfinance services
• Shortage of Financial Capital – Or Misallocation?
Opportunity
• BOP(Bottom of Pyramid).
• Innovation.
• Day to day money management.
• Building long term saving.
Recommendations
• Innovative saving products – location and client specific.
• Awareness.
• Relaxation in provisioning norms for MFIs.
• Converting No Frill Account to normal banking account.
• UID
Micro finance

Contenu connexe

Tendances

microfinance in India
microfinance in Indiamicrofinance in India
microfinance in Indiajalpanpatel
 
A Strategic Perspective of the Indian Micro Finance Sector 2015
A Strategic Perspective of the Indian Micro Finance Sector 2015A Strategic Perspective of the Indian Micro Finance Sector 2015
A Strategic Perspective of the Indian Micro Finance Sector 2015Chandrasekhar Poduri
 
IMPACT OF MICROFINANCE ON THE RURAL DEVELOPMENT IN ASSAM ABSTRACT
IMPACT OF MICROFINANCE ON THE RURAL DEVELOPMENT  IN ASSAM ABSTRACTIMPACT OF MICROFINANCE ON THE RURAL DEVELOPMENT  IN ASSAM ABSTRACT
IMPACT OF MICROFINANCE ON THE RURAL DEVELOPMENT IN ASSAM ABSTRACTPriyabrata Bhattacharjee
 
Microfinance An Introduction
Microfinance An IntroductionMicrofinance An Introduction
Microfinance An IntroductionKabare Piyush
 
The future of microfinance in india
The future of microfinance in indiaThe future of microfinance in india
The future of microfinance in indiasatrujeetsahoo
 
FINANCIAL PERFORMANCE OF MICROFINANCE INSTITUTIONS
FINANCIAL PERFORMANCE OF MICROFINANCE INSTITUTIONSFINANCIAL PERFORMANCE OF MICROFINANCE INSTITUTIONS
FINANCIAL PERFORMANCE OF MICROFINANCE INSTITUTIONSRupa R
 
Microfinance in india
Microfinance in indiaMicrofinance in india
Microfinance in indiaMalko29
 
48947731 a-project-report-on-microfinance-in-india
48947731 a-project-report-on-microfinance-in-india48947731 a-project-report-on-microfinance-in-india
48947731 a-project-report-on-microfinance-in-indiaAnil Kumar
 
micro finance institution analysis in india
micro finance institution analysis in indiamicro finance institution analysis in india
micro finance institution analysis in indiarohitsethi69
 
Microfinance annie
Microfinance annieMicrofinance annie
Microfinance anniesnb9899
 
Role of ngo in microfinance
Role of ngo in microfinanceRole of ngo in microfinance
Role of ngo in microfinanceVIPIN KP
 
The impact of microfinance on living standards, empowerment and poverty allev...
The impact of microfinance on living standards, empowerment and poverty allev...The impact of microfinance on living standards, empowerment and poverty allev...
The impact of microfinance on living standards, empowerment and poverty allev...Alexander Decker
 
IMPACT OF MICRO FINANCE THROUGH SELF HELP GROUPS IN PUDUKOTTAI DISTRICT
IMPACT OF MICRO FINANCE THROUGH SELF HELP GROUPS IN PUDUKOTTAI DISTRICTIMPACT OF MICRO FINANCE THROUGH SELF HELP GROUPS IN PUDUKOTTAI DISTRICT
IMPACT OF MICRO FINANCE THROUGH SELF HELP GROUPS IN PUDUKOTTAI DISTRICTIAEME Publication
 
Problems and Prospects of Micro-finance in India.
Problems and Prospects of Micro-finance in India. Problems and Prospects of Micro-finance in India.
Problems and Prospects of Micro-finance in India. Akash Saha
 
Is Microfinance Investible?: A Tanzanian Perspective
Is Microfinance Investible?: A Tanzanian PerspectiveIs Microfinance Investible?: A Tanzanian Perspective
Is Microfinance Investible?: A Tanzanian PerspectiveAbdurahman Suddy
 
micro finance - synopsis
micro finance - synopsismicro finance - synopsis
micro finance - synopsisRavi Shankar
 
Contribution of microfinance and women empowerment
Contribution of microfinance and women empowermentContribution of microfinance and women empowerment
Contribution of microfinance and women empowermentkayirangad
 

Tendances (20)

microfinance in India
microfinance in Indiamicrofinance in India
microfinance in India
 
Microfinance in India
Microfinance in India Microfinance in India
Microfinance in India
 
A Strategic Perspective of the Indian Micro Finance Sector 2015
A Strategic Perspective of the Indian Micro Finance Sector 2015A Strategic Perspective of the Indian Micro Finance Sector 2015
A Strategic Perspective of the Indian Micro Finance Sector 2015
 
IMPACT OF MICROFINANCE ON THE RURAL DEVELOPMENT IN ASSAM ABSTRACT
IMPACT OF MICROFINANCE ON THE RURAL DEVELOPMENT  IN ASSAM ABSTRACTIMPACT OF MICROFINANCE ON THE RURAL DEVELOPMENT  IN ASSAM ABSTRACT
IMPACT OF MICROFINANCE ON THE RURAL DEVELOPMENT IN ASSAM ABSTRACT
 
Microfinance An Introduction
Microfinance An IntroductionMicrofinance An Introduction
Microfinance An Introduction
 
The future of microfinance in india
The future of microfinance in indiaThe future of microfinance in india
The future of microfinance in india
 
FINANCIAL PERFORMANCE OF MICROFINANCE INSTITUTIONS
FINANCIAL PERFORMANCE OF MICROFINANCE INSTITUTIONSFINANCIAL PERFORMANCE OF MICROFINANCE INSTITUTIONS
FINANCIAL PERFORMANCE OF MICROFINANCE INSTITUTIONS
 
Microfinance in india
Microfinance in indiaMicrofinance in india
Microfinance in india
 
Microfinance agriculture
Microfinance agricultureMicrofinance agriculture
Microfinance agriculture
 
48947731 a-project-report-on-microfinance-in-india
48947731 a-project-report-on-microfinance-in-india48947731 a-project-report-on-microfinance-in-india
48947731 a-project-report-on-microfinance-in-india
 
micro finance institution analysis in india
micro finance institution analysis in indiamicro finance institution analysis in india
micro finance institution analysis in india
 
Microfinance annie
Microfinance annieMicrofinance annie
Microfinance annie
 
Role of ngo in microfinance
Role of ngo in microfinanceRole of ngo in microfinance
Role of ngo in microfinance
 
The impact of microfinance on living standards, empowerment and poverty allev...
The impact of microfinance on living standards, empowerment and poverty allev...The impact of microfinance on living standards, empowerment and poverty allev...
The impact of microfinance on living standards, empowerment and poverty allev...
 
IMPACT OF MICRO FINANCE THROUGH SELF HELP GROUPS IN PUDUKOTTAI DISTRICT
IMPACT OF MICRO FINANCE THROUGH SELF HELP GROUPS IN PUDUKOTTAI DISTRICTIMPACT OF MICRO FINANCE THROUGH SELF HELP GROUPS IN PUDUKOTTAI DISTRICT
IMPACT OF MICRO FINANCE THROUGH SELF HELP GROUPS IN PUDUKOTTAI DISTRICT
 
Microfinance
MicrofinanceMicrofinance
Microfinance
 
Problems and Prospects of Micro-finance in India.
Problems and Prospects of Micro-finance in India. Problems and Prospects of Micro-finance in India.
Problems and Prospects of Micro-finance in India.
 
Is Microfinance Investible?: A Tanzanian Perspective
Is Microfinance Investible?: A Tanzanian PerspectiveIs Microfinance Investible?: A Tanzanian Perspective
Is Microfinance Investible?: A Tanzanian Perspective
 
micro finance - synopsis
micro finance - synopsismicro finance - synopsis
micro finance - synopsis
 
Contribution of microfinance and women empowerment
Contribution of microfinance and women empowermentContribution of microfinance and women empowerment
Contribution of microfinance and women empowerment
 

En vedette

Las redes sociales como instrumento dinamizador del aprendizaje colaborativo
Las redes sociales como instrumento dinamizador del aprendizaje colaborativoLas redes sociales como instrumento dinamizador del aprendizaje colaborativo
Las redes sociales como instrumento dinamizador del aprendizaje colaborativoDavid Tomás
 
Social Media in der Aus- und Weiterbildung
Social Media in der Aus- und WeiterbildungSocial Media in der Aus- und Weiterbildung
Social Media in der Aus- und WeiterbildungFCT Akademie GmbH
 
2.1. Wesen und Funktion des Industriebetriebes
2.1. Wesen und Funktion des Industriebetriebes2.1. Wesen und Funktion des Industriebetriebes
2.1. Wesen und Funktion des IndustriebetriebesMarkus Hammele
 
김유정, 김보미 아이컬러
김유정, 김보미 아이컬러김유정, 김보미 아이컬러
김유정, 김보미 아이컬러보미 김
 
연구보고서 김보미
연구보고서 김보미연구보고서 김보미
연구보고서 김보미보미 김
 
아이컬러 카드뉴스 수정본
아이컬러 카드뉴스 수정본아이컬러 카드뉴스 수정본
아이컬러 카드뉴스 수정본보미 김
 

En vedette (11)

Img 0001
Img 0001Img 0001
Img 0001
 
Resolución oav-001
Resolución oav-001Resolución oav-001
Resolución oav-001
 
Las redes sociales como instrumento dinamizador del aprendizaje colaborativo
Las redes sociales como instrumento dinamizador del aprendizaje colaborativoLas redes sociales como instrumento dinamizador del aprendizaje colaborativo
Las redes sociales como instrumento dinamizador del aprendizaje colaborativo
 
Dropsc7
Dropsc7Dropsc7
Dropsc7
 
Dar
DarDar
Dar
 
Khung hình
Khung hìnhKhung hình
Khung hình
 
Social Media in der Aus- und Weiterbildung
Social Media in der Aus- und WeiterbildungSocial Media in der Aus- und Weiterbildung
Social Media in der Aus- und Weiterbildung
 
2.1. Wesen und Funktion des Industriebetriebes
2.1. Wesen und Funktion des Industriebetriebes2.1. Wesen und Funktion des Industriebetriebes
2.1. Wesen und Funktion des Industriebetriebes
 
김유정, 김보미 아이컬러
김유정, 김보미 아이컬러김유정, 김보미 아이컬러
김유정, 김보미 아이컬러
 
연구보고서 김보미
연구보고서 김보미연구보고서 김보미
연구보고서 김보미
 
아이컬러 카드뉴스 수정본
아이컬러 카드뉴스 수정본아이컬러 카드뉴스 수정본
아이컬러 카드뉴스 수정본
 

Similaire à Micro finance

role of financial instituttion in providing microfinance
role of financial instituttion in providing microfinancerole of financial instituttion in providing microfinance
role of financial instituttion in providing microfinanceSrideviHV
 
Microfinance in India
Microfinance in IndiaMicrofinance in India
Microfinance in IndiaSudip Dutta
 
report-on-micro-finance-100127211313-phpapp02.pdf
report-on-micro-finance-100127211313-phpapp02.pdfreport-on-micro-finance-100127211313-phpapp02.pdf
report-on-micro-finance-100127211313-phpapp02.pdfMariappanRamaiah1
 
20628500-Micro-Finance.ppt
20628500-Micro-Finance.ppt20628500-Micro-Finance.ppt
20628500-Micro-Finance.pptAnjumMehtab1
 
PPT ON MICRO FINANCE
PPT ON MICRO FINANCE PPT ON MICRO FINANCE
PPT ON MICRO FINANCE Pradeep Kumar
 
Introduction of microfinance
Introduction of microfinanceIntroduction of microfinance
Introduction of microfinanceswapnil9900
 
Role of microfinance in promoting micro entrepreneurship
Role of microfinance in promoting micro entrepreneurshipRole of microfinance in promoting micro entrepreneurship
Role of microfinance in promoting micro entrepreneurshipVijayakumar Kumar
 
Report On Micro Finance
Report On Micro FinanceReport On Micro Finance
Report On Micro Financealwkdi83
 
Mollifying poverty through microfinance indian perspective
Mollifying poverty through microfinance indian perspectiveMollifying poverty through microfinance indian perspective
Mollifying poverty through microfinance indian perspectiveAlexander Decker
 
Microfinance and women empowerment
Microfinance and women empowermentMicrofinance and women empowerment
Microfinance and women empowermentHarsh Tayal
 
Microcredit In India
Microcredit  In  IndiaMicrocredit  In  India
Microcredit In Indianidhi_mishra
 
Micro finance and enterprenurship
Micro finance and enterprenurshipMicro finance and enterprenurship
Micro finance and enterprenurshipAk Maheshwari
 
11.mollifying poverty through microfinance indian perspective
11.mollifying poverty through microfinance indian perspective11.mollifying poverty through microfinance indian perspective
11.mollifying poverty through microfinance indian perspectiveAlexander Decker
 
AN OVERVIEW OF MICROFINANCE IN INDIA
AN OVERVIEW OF MICROFINANCE IN INDIAAN OVERVIEW OF MICROFINANCE IN INDIA
AN OVERVIEW OF MICROFINANCE IN INDIAErica Thompson
 

Similaire à Micro finance (20)

77 79
77 7977 79
77 79
 
role of financial instituttion in providing microfinance
role of financial instituttion in providing microfinancerole of financial instituttion in providing microfinance
role of financial instituttion in providing microfinance
 
Microfinance in India
Microfinance in IndiaMicrofinance in India
Microfinance in India
 
report-on-micro-finance-100127211313-phpapp02.pdf
report-on-micro-finance-100127211313-phpapp02.pdfreport-on-micro-finance-100127211313-phpapp02.pdf
report-on-micro-finance-100127211313-phpapp02.pdf
 
Microfinance
MicrofinanceMicrofinance
Microfinance
 
20628500-Micro-Finance.ppt
20628500-Micro-Finance.ppt20628500-Micro-Finance.ppt
20628500-Micro-Finance.ppt
 
PPT ON MICRO FINANCE
PPT ON MICRO FINANCE PPT ON MICRO FINANCE
PPT ON MICRO FINANCE
 
Microfinance
MicrofinanceMicrofinance
Microfinance
 
Microfinance by suman saha
Microfinance by suman sahaMicrofinance by suman saha
Microfinance by suman saha
 
Introduction of microfinance
Introduction of microfinanceIntroduction of microfinance
Introduction of microfinance
 
Role of microfinance in promoting micro entrepreneurship
Role of microfinance in promoting micro entrepreneurshipRole of microfinance in promoting micro entrepreneurship
Role of microfinance in promoting micro entrepreneurship
 
Report On Micro Finance
Report On Micro FinanceReport On Micro Finance
Report On Micro Finance
 
final - micro
final - microfinal - micro
final - micro
 
Mollifying poverty through microfinance indian perspective
Mollifying poverty through microfinance indian perspectiveMollifying poverty through microfinance indian perspective
Mollifying poverty through microfinance indian perspective
 
Microfinance and women empowerment
Microfinance and women empowermentMicrofinance and women empowerment
Microfinance and women empowerment
 
Microcredit In India
Microcredit  In  IndiaMicrocredit  In  India
Microcredit In India
 
Micro finance and enterprenurship
Micro finance and enterprenurshipMicro finance and enterprenurship
Micro finance and enterprenurship
 
Envisioning Micro Finance
Envisioning Micro Finance Envisioning Micro Finance
Envisioning Micro Finance
 
11.mollifying poverty through microfinance indian perspective
11.mollifying poverty through microfinance indian perspective11.mollifying poverty through microfinance indian perspective
11.mollifying poverty through microfinance indian perspective
 
AN OVERVIEW OF MICROFINANCE IN INDIA
AN OVERVIEW OF MICROFINANCE IN INDIAAN OVERVIEW OF MICROFINANCE IN INDIA
AN OVERVIEW OF MICROFINANCE IN INDIA
 

Dernier

renaltumors upasana sahu Group 50.pptxism
renaltumors upasana sahu Group 50.pptxismrenaltumors upasana sahu Group 50.pptxism
renaltumors upasana sahu Group 50.pptxismthxz2fdqxw
 
BIHC Briefing Greece March 2024, with Crédit Agricole CIB
BIHC Briefing Greece March 2024, with Crédit Agricole CIBBIHC Briefing Greece March 2024, with Crédit Agricole CIB
BIHC Briefing Greece March 2024, with Crédit Agricole CIBNeil Day
 
The Role of Non-Banking Financial Companies (NBFCs).pdf
The Role of Non-Banking Financial Companies (NBFCs).pdfThe Role of Non-Banking Financial Companies (NBFCs).pdf
The Role of Non-Banking Financial Companies (NBFCs).pdfChampak Jhagmag
 
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...indexPub
 
2024.03 Strategic Resources_Pub presentation
2024.03 Strategic Resources_Pub presentation2024.03 Strategic Resources_Pub presentation
2024.03 Strategic Resources_Pub presentationAdnet Communications
 
First, Second, and Third Generation Islamic Economicss
First, Second, and Third Generation Islamic EconomicssFirst, Second, and Third Generation Islamic Economicss
First, Second, and Third Generation Islamic EconomicssAsad Zaman
 
Stock Market Brief Deck FOR 31124 yt.pdf
Stock Market Brief Deck FOR 31124 yt.pdfStock Market Brief Deck FOR 31124 yt.pdf
Stock Market Brief Deck FOR 31124 yt.pdfMichael Silva
 
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdfMytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdfNewsroom8
 
Islamic banking in Afghanistan from start until now
Islamic banking in Afghanistan from start until nowIslamic banking in Afghanistan from start until now
Islamic banking in Afghanistan from start until nowhamidzafar6
 
Planning of societal re/production in a commonist society
Planning of societal re/production in a commonist societyPlanning of societal re/production in a commonist society
Planning of societal re/production in a commonist societyStefanMz
 
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdfjamie766122
 
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTXAUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTXkamikazekujoh
 
Stock Market Brief Deck FOR 3142024..pdf
Stock Market Brief Deck FOR 3142024..pdfStock Market Brief Deck FOR 3142024..pdf
Stock Market Brief Deck FOR 3142024..pdfMichael Silva
 
Challenging Factors of Rural Women Entrepreneurs in West Bengal
Challenging Factors of Rural Women Entrepreneurs in West  BengalChallenging Factors of Rural Women Entrepreneurs in West  Bengal
Challenging Factors of Rural Women Entrepreneurs in West BengalNabarun Chakraborty
 
Swift_Maintaining Critical Standards(...).pptx.pdf
Swift_Maintaining Critical Standards(...).pptx.pdfSwift_Maintaining Critical Standards(...).pptx.pdf
Swift_Maintaining Critical Standards(...).pptx.pdfNeo4j
 
Buy-Side Leaps Into Gen AI Era by Jasper Colin
Buy-Side Leaps Into Gen AI Era by Jasper ColinBuy-Side Leaps Into Gen AI Era by Jasper Colin
Buy-Side Leaps Into Gen AI Era by Jasper ColinJasper Colin
 
Economic Risk Factor Update: March 2024 [SlideShare]
Economic Risk Factor Update: March 2024 [SlideShare]Economic Risk Factor Update: March 2024 [SlideShare]
Economic Risk Factor Update: March 2024 [SlideShare]Commonwealth
 
powerpoint presentation about asian regioonalism
powerpoint presentation about asian regioonalismpowerpoint presentation about asian regioonalism
powerpoint presentation about asian regioonalismrezeraaisla
 
Pros and Cons of Interest-Only DSCR Loans
Pros and Cons of Interest-Only DSCR LoansPros and Cons of Interest-Only DSCR Loans
Pros and Cons of Interest-Only DSCR LoansPark Place Finance LLC
 

Dernier (20)

renaltumors upasana sahu Group 50.pptxism
renaltumors upasana sahu Group 50.pptxismrenaltumors upasana sahu Group 50.pptxism
renaltumors upasana sahu Group 50.pptxism
 
BIHC Briefing Greece March 2024, with Crédit Agricole CIB
BIHC Briefing Greece March 2024, with Crédit Agricole CIBBIHC Briefing Greece March 2024, with Crédit Agricole CIB
BIHC Briefing Greece March 2024, with Crédit Agricole CIB
 
The Role of Non-Banking Financial Companies (NBFCs).pdf
The Role of Non-Banking Financial Companies (NBFCs).pdfThe Role of Non-Banking Financial Companies (NBFCs).pdf
The Role of Non-Banking Financial Companies (NBFCs).pdf
 
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
ANALYSIS OF BANK MANDIRI S HEALTH LEVEL BASED ON RISK PROFILE, GOOD CORPORATE...
 
2024.03 Strategic Resources_Pub presentation
2024.03 Strategic Resources_Pub presentation2024.03 Strategic Resources_Pub presentation
2024.03 Strategic Resources_Pub presentation
 
First, Second, and Third Generation Islamic Economicss
First, Second, and Third Generation Islamic EconomicssFirst, Second, and Third Generation Islamic Economicss
First, Second, and Third Generation Islamic Economicss
 
Stock Market Brief Deck FOR 31124 yt.pdf
Stock Market Brief Deck FOR 31124 yt.pdfStock Market Brief Deck FOR 31124 yt.pdf
Stock Market Brief Deck FOR 31124 yt.pdf
 
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdfMytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
Mytilineos (OW, TP_ €46.0_sh)_ Strong organic progress 14-03-2024.pdf
 
Islamic banking in Afghanistan from start until now
Islamic banking in Afghanistan from start until nowIslamic banking in Afghanistan from start until now
Islamic banking in Afghanistan from start until now
 
Planning of societal re/production in a commonist society
Planning of societal re/production in a commonist societyPlanning of societal re/production in a commonist society
Planning of societal re/production in a commonist society
 
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
14.11.2024 AMOO-MOCA African Creative Economy Summit London summary.pdf
 
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTXAUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
AUDITING FRAUDS OF AN ENGLISH COMPANY.PPTX
 
Stock Market Brief Deck FOR 3142024..pdf
Stock Market Brief Deck FOR 3142024..pdfStock Market Brief Deck FOR 3142024..pdf
Stock Market Brief Deck FOR 3142024..pdf
 
Closing Remarks International Women's Day 2024
Closing Remarks International Women's Day 2024Closing Remarks International Women's Day 2024
Closing Remarks International Women's Day 2024
 
Challenging Factors of Rural Women Entrepreneurs in West Bengal
Challenging Factors of Rural Women Entrepreneurs in West  BengalChallenging Factors of Rural Women Entrepreneurs in West  Bengal
Challenging Factors of Rural Women Entrepreneurs in West Bengal
 
Swift_Maintaining Critical Standards(...).pptx.pdf
Swift_Maintaining Critical Standards(...).pptx.pdfSwift_Maintaining Critical Standards(...).pptx.pdf
Swift_Maintaining Critical Standards(...).pptx.pdf
 
Buy-Side Leaps Into Gen AI Era by Jasper Colin
Buy-Side Leaps Into Gen AI Era by Jasper ColinBuy-Side Leaps Into Gen AI Era by Jasper Colin
Buy-Side Leaps Into Gen AI Era by Jasper Colin
 
Economic Risk Factor Update: March 2024 [SlideShare]
Economic Risk Factor Update: March 2024 [SlideShare]Economic Risk Factor Update: March 2024 [SlideShare]
Economic Risk Factor Update: March 2024 [SlideShare]
 
powerpoint presentation about asian regioonalism
powerpoint presentation about asian regioonalismpowerpoint presentation about asian regioonalism
powerpoint presentation about asian regioonalism
 
Pros and Cons of Interest-Only DSCR Loans
Pros and Cons of Interest-Only DSCR LoansPros and Cons of Interest-Only DSCR Loans
Pros and Cons of Interest-Only DSCR Loans
 

Micro finance

  • 1. Microfinance in India Its Challenges and Opportunity By: Sheetal Agarwal 10808702
  • 2. Introduction According to International Labor Organization (ILO), “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 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”.
  • 3. When and how was it started It is safe to assume that current day microfinance started in India sometime around 1980. It started as small groups formed to help themselves or the self help groups (SHG). Slowly the movement picked up momentum and national bodies like the Small Industries Development Bank of India (SIDBI) and the National Bank for Agriculture and Rural Development (NABARD) jumped into the band wagon. They have been devoting significant time and financial resources to microfinance.
  • 4. Its Objective Microfinance offers financial services to underprivileged people. Encourage Entrepreneurship and Self-Sufficiency Manage Risk Empower Women
  • 5. Micro finance sector in 2011-12 Both SHG- Bank linkage program model (SBLP) and MFIs put together, achieve an outreach of 83.4 million clients Saving linked SHGs increased to 7.96 million with estimated member base of 104 million Credit linked SHGs were 4.36 million - 9% less than the previous year. Client outreach of MFIs - 26.6 million (decline of 16 %) with a gross loan portfolio of Rs.209.13 billion (decline of 3%) The average loan size of SHGs- Rs.6420; an increase of Rs.1527 over last year. Average MFI loan increased by 15% over last year to Rs.7803
  • 6. Development Initiatives Focus turned towards governance and responsible finance practices. Risk management becomes a post-crisis priority. Taking advantage of technological and market developments. Series of Regulatory initiatives by RBI Greater emphasis on community based organizations
  • 7. Financial Inclusion RBIs Financial Inclusion Plan gathers momentum (99,800 villages). 103 mn No Frill Accounts – Doubled compared to previous year. Quality of inclusion a concern – compliance with RBI guidelines - not business interest, drives banks. Mobile banking gaining momentum. 21.76 mn - likely to improve services on the ground.
  • 8. Examples: The process of transformation: The microfinance is seen targeting the poor women who need the funds to establish in their chosen fields. Pottery, Agriculture and the like have women who can perform better with a little financial assistance. They have defaulted much lesser than their male counterparts. In Bangladesh, for example, it has been proved that women default on loans less often. The credit extended to women has a positive impact on household consumption thereby improving the quality of life for children.
  • 10. Challenges • Perceived high risk of microfinance entrepreneurship and small business. • High cost involved in small transaction. • Lack of debt and equity funds for MFI to pass on to poor. • Difficulty in measuring the social performance of MFIs • The poor’s inability to offer marketable collateral for loans • Poor institutional viability of micro enterprises • Lack of knowledge about microfinance services • Shortage of Financial Capital – Or Misallocation?
  • 11. Opportunity • BOP(Bottom of Pyramid). • Innovation. • Day to day money management. • Building long term saving.
  • 12. Recommendations • Innovative saving products – location and client specific. • Awareness. • Relaxation in provisioning norms for MFIs. • Converting No Frill Account to normal banking account. • UID