This is a presentation i made for my first year as a management student. An overview of micro-credit and it's advantages as also the various organizations that help facilitate the same
6. NABARD
• SHG bank linkage program
• Refinance
• Promoting/bringing about MFI development
• Evaluate, monitor and Inspect clients
• Regulate
• Assistance to Government
7. RBI
• Mainstream micro-credit
• Efforts to provide micro-credit
• Regulatory framework
• Promotion and Training
8. SIDBI
• SIDBI Foundation for Micro-Credit (SFMC)
• Provides financial as well non-financial help
especially to women
• Rating of MFIs
• Customized support to MFI
• Methodology neutral
• Innovation and action research
11. LENDING PROCESS
• Geo-Economic Survey of Region
• Selection of Village
• Group Formation
• Training of Borrowers
• Scrutiny & Underwriting
• Weekly Financial Transactions
12. TYPES OF MICRO-CREDIT
Product Purpose Terms Interest rate
Income Generation Loan Income generation, asset 50 weeks loan paid weekly 12.5% (appx)
(IGL) development
Mid-Term Loan (MTL) Same as IGL, available at middle 50 weeks loan paid weekly 12.5% (appx)
(week 25) of IGL
Emergency Loan (EL) All emergencies such as health, 20 weeks loan 0%
funerals, hospitalization
Individual Loan (IL) Income generation, asset 1-2 years loan repaid 11% (appx)
development monthly
13. IMPACT
• Financial inclusion
• SHARE, SKS and Spandana serve more than 1.5
million families, most of them very poor when they
started accessing micro-financial services
• MFI’s achieved an overall growth of customer base by
10.8%
• Borrowing base increased from 83.6 to93.9 million
14. IMPACT
• Increase of personal income
• Empowerment of women
• Improvement in nutrition
• Increased education of the borrower’s children
• Pressure on banking institutions to improve
15. CHALLENGES
• Building permanent, sustainable institutions that
provide financial services to the poor on a mass
scale.
• Getting established large-scale financial institutions to
enter the industry.
• Striking a right balance between development and
16. CHALLENGES
• Developing and strengthening appropriate supervision
and regulation
• Developing high quality growing cadre of managers
and professionals.
• Improving financial transparency.
17. RECOMMENDATIONS
• Improve Governance.
• Change our mindset and think microfinance as an
huge business opportunity with high social impact.
• Learn from the past experience and from
neighbouring countries.
18. CONCLUSION
• The industry has evolved.
• Achievements are significant when compared with
the initial situation.
• But the industry has barely scratched the surface
of the market potential.
• Mass outreach can be achieved only if we
approach this as a business proposition with high