1. MICROCREDIT IN INDIA

2. Area To Be Covered 1) How to reach poor people 2) History of Microcredit 3) What is microcredit 4) Target Group 5) Grameen Bank and Its Objective 6) Mechanism of Microcredit 7) Microcredit and Inclusive Growth 8) Present scenario 9) Conclusion

3. Let’s sayyou are a verypoorcitizen. You have the project to developyourtexile plant withyourcolleagues. How canyouachieveit?

4. MUHAMMAD YUNUS - Founder and Chairperson of GARMEEN BANK, a bank for poor. - He received Noble Peace Prize for his achievements and actions undertaken to improve the life of the deprived people in world. - It was particularly thanks to the creation of the Grameen Bank and the Microcredit.

5. Contd. - He granted his first loan of 27 USD from its own savings to 42 people. - A majority of them were women eager to create a small business.

6. What Is Microcredit ? - Small loansaimingatimproving the lives of poor people and theirfamilies. - Sustainingsmall-scaleeconomicsactivities, granted to people not considered as creditworthy. - Microcreditisonly a kind of service providedwithin the global concept of microfinance

7. The Target Groups * Little or no chance of getting a Bank Loan. * Good operating skills in the area in which the potential clients are willing to work, but: « Usually no financialresources » * WorkingWithWomen (90%) * The poorest segments of society, living with less than one Dollar per Day.

8. Grameen Bank :Objective # It is first model of microcredit. Founded as a project in 1976. # To extend the banking facilities to the poor men and women. # To create opportunities for self employment. # To bring the disadvantaged people within the framework of some organizational format.  Creation of Microcredit.

9. How Does Microcredit Work ? 1) Individual Lending Model 2) Group Lending Model

10. Microcredit and Inclusive Growth The Eleventh Five Year Plan visualizes “faster and more inclusive growth”. This implies that we need to/ for – Shift the plan priorities towards the social sectors Put appropriate institutions and linkages in place to bring good to the common man The States to play a facilitating role in encouraging individual-institutional linkages

12. Policy Actor Role Played - Formulation and coordination - Priority sector lending target for NCBs. - Issuing licenses - Micro Finance Development and Equity fund (MFDEF). Reserve Bank of India

15. Local area banks- Kisan Credit Cards Formal / Banking Sector - Financial access - promoting and fostering SHGs. MFI

16. Example of success: DAGAR FOUNDATION,BIHAR -Mrs.Sunitadevi

18. Present Scenario

19. Contd.

20. Issues of Micro Finance in India Legal Issues - Seventh schedule declares money lending as State subject - Doesn’t mention private money lending - No model money lending act prepared by center. Gender Issues Rate of Interest Choice of productive assets.

21. Impact 1) 76.8% of the clients experienced significant reduction in their poverty over the last four years of which; a) 38.4% moved from Very Poor to Moderate Poor b) 17.6% moved from Very Poor to Not Poor c) 20.8% moved from Moderate Poor to Not Poor 2) 38.4% are in the Non Poor category. 3) 80% witnessed increase in income levels. 4) Women actively participate in family decisions. 5) Most of the members’ children are being sent to schools. 6) 17 different combinations were used as paths out of poverty.

22. Conclusion: Future Challenges to Microcredit If wish to succeed in providingmicrofinance services to the poor on a large scale, further contributions are needed. Not only an issue of financing: Regulators and governmentsneed to develop: legal and regulatoryframeworks for microcredit consumer protection financial infrastructure.

23. Reference IMF: Microfinance: A View from the Fund. Grameen Bank: http://www.grameen-info.org/. Economics Times of India (Date- 13/1/2011) www.indianngos.com/issue/microcredit/operationalissues.htm. www.google.com