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    Microfinance in India

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    Ravi Kiran
    Microfinance in India began in 1974 with the Self Employed Women's Association in Gujarat and later expanded through self-help groups providing financial services to deprived populations. It addresses the large unmet demand for credit among 87% of the poorest Indian households who lack access to banking. Common microfinance activities include microcredit, microsavings, and microinsurance. However, issues remain such as high interest rates, over-indebtedness from joint loans, and questions around its ability to significantly reduce poverty in all cases.

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    Microfinance in India

    Uploaded by

    Ravi Kiran
    201 views12 pages
    Microfinance in India began in 1974 with the Self Employed Women's Association in Gujarat and later expanded through self-help groups providing financial services to deprived populations. It addresses the large unmet demand for credit among 87% of the poorest Indian households who lack access to banking. Common microfinance activities include microcredit, microsavings, and microinsurance. However, issues remain such as high interest rates, over-indebtedness from joint loans, and questions around its ability to significantly reduce poverty in all cases.

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    Microfinance in India began in 1974 with the Self Employed Women's Association in Gujarat and later expanded through self-help groups providing financial services to deprived populations. It addresses the large unmet demand for credit among 87% of the poorest Indian households who lack access to banking. Common microfinance activities include microcredit, microsavings, and microinsurance. However, issues remain such as high interest rates, over-indebtedness from joint loans, and questions around its ability to significantly reduce poverty in all cases.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    201 views12 pages

    Microfinance in India

    Uploaded by

    Ravi Kiran
    Microfinance in India began in 1974 with the Self Employed Women's Association in Gujarat and later expanded through self-help groups providing financial services to deprived populations. It addresses the large unmet demand for credit among 87% of the poorest Indian households who lack access to banking. Common microfinance activities include microcredit, microsavings, and microinsurance. However, issues remain such as high interest rates, over-indebtedness from joint loans, and questions around its ability to significantly reduce poverty in all cases.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
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    MICROFINANCE IN INDIA

    Presented By:Divakar Kumar (12HM14)

    WHAT IS MICROFINANCE?
    Microfinance is the provision of financial services to low-income clients, including consumers and the self-employed, who traditionally lack access to banking and related services. According to International Labour Organization (ILO), Microfinance is an economic development approach that involves providing financial services through institutions to low income clients.

    Role and Activities of Microfinance


    Microcredit Micro savings Micro insurance

    Inception of Microfinance in India

    Microfinance in India started in 1974 in Gujarat as Shri Mahila SEWA (Self Employed Womens Association) Sahakari Bank. Microfinance later evolved in the early 1980s around the concept of informal Self-Help Groups (SHGs) that provided deprived poor people with financial services. Now in a strong endorsement of microfinance, the National Bank for Agriculture and Rural Development (NABARD) and Small Industries Development Bank of India (SIDBI) has committed themselves to developing microfinance.
    4

    The Need in India


    India is said to be the home of one third of the worlds poor. About 87 percent of the poorest households do not have access to credit. The demand for microcredit has been estimated at up to $30 billion in India but the supply is very less that is $2.2 billion combined by all involved in the sector.

    Misconception with saving

    If the poor are not earning enough, how can they save?

    Saving is an attitude. Even the poor are more bankable.

    SHG Bank Linkage Model

    MODEL -1
    FORMATION BY BANK CREDITED BY BANK

    MODEL- 11
    FORMATION BY NGO CREDITED BY BANK

    MODEL- 111
    FORMATION BY MFI CREDITED BY MFI
    7

    Rise of Self Help Groups

    Issues related to Microfinance in India


    Problems faced by Borrowers
    High Interest Rates Joint Microfinance Not aimed at lifting people out of poverty

    Problems faced by Lenders


    Sustainability Lack of Capital

    How to cope up with the problem?


    Train them, how to rotate or invest money so that each of whom can establish her/his small business. Helps them to form groups that are accountable for each other's loans. Distributes funds for loans. Meets with groups of borrowers to collect loan repayments and to guide their endeavours.

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    Conclusion

    The microfinance sector in India has developed a successful and sustainable business model which has been able to overcome challenges traditionally faced by the financial services sector in servicing the low income population by catering to its specific needs, capacities and leveraging pre-existing community support networks.

    11

    THANK YOU

    12

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