22-05-2013, 04:36 PM
Micro finance
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What is Microfinance ?
Microfinance is a financial service to low income clients or solidarity lending groups
Target groups include consumers and the self-employed , who traditionally lack access to banking and related services
Financial services include credit, savings, insurance, money transfers etc
Microfinance came into scene!
Started in 1970s as experimental programs in Bangladesh and a few other countries
Tiny loans were extended to groups of poor women to invest in micro-businesses
Credit was based on solidarity group lending
Initiatives taken by ACCION International, Sewa bank , Grameen bank
Grameen Bank
Founded in 1983 by Professor Muhammad Yunus in Bangladesh
Addressed the banking problem faced by the poor through a programme of action-research
Its initial success also stimulated the establishment of several other giant microfinance institutions like BRAC, ASA, Proshika
It now serves more than 4 million borrowers
Need for microfinance in India
Estimated that 350 million people live Below Poverty Line
This translates to approximately 75 million households
Annual credit demand by the poor in the country was estimated to be about Rs. 60,000 crore
Cumulative disbursements under all micro finance programmes is only about Rs. 5000 crores.(Mar. 02)
Features of Indian Microfinance
About 60 % of the MFIs are registered as societies
About 20 % are Trusts
About 65 % of the MFIs follow the operating model of SHGs
Large concentration in South India-600 MFI initiatives have a cumulative outreach of 1.25 crore poor households
NABARD’s bank linkage program has cumulatively reached a total of 9.4 lakhs SHGs with about 1.4 crore households