MICROFINANCE (percept 2011)

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MICROFINANCE

PRESENTED BY:

MEENAKSHI MITRA

RAHUL SINGH

DMSR, G.S. COLLEGE,

NAGPUR.

21TH OCT. 2011.



STRUCTURE: Hypothesis, Objectives & Research Methodology.

Introduction to Microfinance & its Model.

New Regulator & its Roles.

Target, Penetration & Outreach of MFIs.

Impact on Poverty & Women.

Data Analysis & Conclusion.



HYPOTHESIS:

Microfinance is a Growing Sector & has an Impact over

Poverty, Living Standard & Women Empowerment.

Statistical.

OBJECTIVE:

How Microfinance Works, Its Impact on Poverty Line,

Standard Of Living & Women Empowerment.



RESEARCH METHODOLOGY:

Secondary Sources.

www.indiastat.com

Institute of Microfinance Journals.

Microfinance India State of Sector Reports.

National Council Of Applied Economic Research

Reports.

www.Lokcapital.com



INTRODUCTION:

Provision of Financial Services to Low-Income Clients or Solidarity Lending Groups.

Permanent Access to a Range of High Quality of Financial

Services such as Savings, Insurance, Fund Transfer.

Viable Investment Sector with Commercial Sector Joining

Social Sector Nurturing the Industry so far.

Microfinance Loans in India Ranges from 4500/- to

25000/- with an Interest Rate of 25%-35% p.a.



MICROFINANCE MODEL:



PRIMAR Y INVESTMENTS IN INDIAN MFIs:

DATE MFI INVESTMENT INVESTOR

JAN 2010 BANDHAN 11.0 Mn SIDBI

DEC 2009 UTKARSH 0.7 Mn AVISHKAR,

GOODWELL, IFC

OCT 2009 SPANDANA 47.1 Mn TEMASEK

SEPT 2009 ASMITHA 5.5 Mn BLUE ORCHARD

DEC 2008 ASOMI 0.6 Mn INCOFIN

JULY 2008 MMFL 6.0 Mn UNITUS

JUNE 2008 AROHAN 1.4 Mn LOK

DEC 2007 SKS 32.3 Mn SANDSTONE

MAY 2006 UJJIVAN 0.5 Mn BELLWETHER,

UNITUS.

Lokcapital.com



New Regulator & Roles:

NABARD to be the Regulatory Body for both Depository

and Non Depository Micro MFOs . Its role entails:

Facilitating the Development of Credit Rating Norms

and Performance Benchmarks.

Specifying the Accounting Form and the Auditing

Standards.

Promoting Financial Literacy of MFO Clients and Sector Related Research.

Disseminating Information Relating to Best Practices.



TARGET:

0.4% HOUSEHOLD

9,20,000/- &ABOVE.

5.9% HOUSEHOLD 1,84,000/- - 9,20,000/-& ABOVE.

22% HOUSEHOLD

82,800/- - 1,84,000/-& ABOVE.

72% HOUSEHOLD

BELOW 82,800/-.

LokCapital.com



PENETRATION OF MICROFINANCE

STATEWISE:

STATES % OF PENETRATION

ORISSA, ANDHRA PRADESH,

KARNATAKA & TAMIL NADU.

GREATER THAN 15%

MAHARASHTRA, MADHYAPRADESH, CHATTISGARH, WEST

BENGAL & TRIPURA.

BETWEEN 5% - 15%.

GUJARAT, RAJASTHAN, HARYANA,

UTTARAKHAND, UP, BIHAR, ASSAM,

MEGHALAYA & JHARKHAND.

LESS THAN 5%.

J&K, HIMACHAL PRADESH, PUNJAB,

ARUNACHAL PRADESH, MANIPUR,

NAGALAND & MIZORAM.

NEGLIGIBLE PRESENCE OF

MICROFINANCE ACTIVITY.

Lokcapital.com



www

.indiastat.com



CRILEX ± the M-CRIL India MFI Growth Index (2011)



0

10

20

30

40

50

60

74' 77' 86' 87' 94' 99' 02' 04' 05' 06' 08' 10'

BPL (%)

EARNERS (%)

44.5%

38.9%

26.1%23.9%

24.1%

27.5%

19.5%

17% 15.5%

34.7% 31.2%

33.1%37.5%

28.4%27%

25%

54.9%51.3

36%

IMPACT ON POVER TY:

www

.indiastat.com



IMPACT ON WOMEN:

REPOR TED IMPROVEMENT/ INCREASE IN 2008 (%) 2010 (%)

Self Confidence Related To Travelling 78 81

Self Confidence Related In Handling Money 77 83

Ability To Face Family Disputes 63 61

Ability To Deal With Financial Crisis In Family 72 72

Decisions On Purchasing Household Items 62 63

Decisions On Buying Productive Assets 52 54

Decisions On Spending In Family & Social Expenses 67 68

Attendance In Village Committee. 36 38

N

ational Council Of Applied Economic Research Journal. (2008-2010.)



DATA ANALYSIS:

Primarily Rural Outreach.

More Evidence For Poverty Alleviation.

High Proportion of Women Report Positively.

MFIs Should also Approach Urban Areas.



CONCLUSION:

MICROFINANCE (percept 2011)

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