Issue and Success Factors in Micro Financing Copy

8/11/2019 Issue and Success Factors in Micro Financing Copy

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[MICRO FINANCE]

A%)O&+,*+M+)'

On the very !tset " th#s re$rt% I &!' '#e t e*ten +y s#n,ere - hert"e't

/'#0t#n t&rs '' the $ersn0es &h hve he'$e +e #n th#s enevr.

W#th!t the#r ,t#ve 0!#n,e% he'$% ,$ert#n - en,!r0e+ent% I &!' nt

hve +e he&y #n the $re,t.

I + #ne""/'y #ne/te t Prof ,r AF'AB A&AM(He " De$rt+ent "

B!s#ness A+#n#strt#n)"r ,ns,#ent#!s 0!#n,e n en,!r0e+ent t

,,+$'#sh th#s ss#0n+ent.

I + e*tre+e'y thn"!' n $y +y 0rt#t!e t +y ",!'ty 0!#e

Mr Sa$ed a5ih Ahmed "r her v'!/'e 0!#n,e n s!$$rt n

,+$'et#n " th#s $re,t #n #ts $resent'y.

I 's ,n&'e0e th ee$ sense " reveren,e% +y 0rt#t!e t&rs

+y $rents n +e+/er " +y "+#'y% &h hs '&ys s!$$rte +e+r''y s &e'' s e,n+#,''y.

At 'st /!t nt 'est 0rt#t!e 0es t '' " +y "r#ens &h #re,t'y r

#n#re,t'y he'$e +e t ,+$'ete th#s $re,t re$rt.

Any +#ss#n #n th#s /r#e" ,n&'e0e+ent es nt +en ', " 0rt#t!e.

'han6in! (ou

t6arsh 'ri7athi

MBA 1st$r

*rou7 B

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'able of %ontents

Sr )o 'OPI% Pa!e )o1 E2E3UTI4E SUMMARY 5

6 I7TRODU3TIO7 8

9 OBJE3TI4ES O: THE STUDY ;

< MI3RO :I7A73I7G ;

5 STRATEGI3 PO=I3Y I7ITIATI4ES >

8 A3TI4ITIES I7 MI3RO :I7A73I7G >

; =EGA= REGU=ATIO7S ?> SER4I3ES PRO4IDED BY MI3RO :I7A73I7G 1@

? 3HA==E7GES A7D OPPORTU7ITIES I7

MI3RO :I7A73I7G

1116

1@ PRI73IP=ES I7 MI3RO :I7A73I7G 191

15 SEWA

(3OOPERATI4E BA7K)

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18 SIDBI 6@

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1? BA7K 3ORRESPO7DA73E 9196

6@ RO=ES% :U73TIO7S - WORKI7G

ME3HA7ISM O: :I7A73IA= I7STITUTIO7S

99

61 SE3URITICATIO7 9

6> :I7DI7GS 5?

6? =IMITATIO7S

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RE3OMME7DATIO7S

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9@ 3O73=USIO7 81

91 RE:ERE73ES 86

+8+%'I/+ SMMA(M#,r"#nn,e +ens $rv##n0 very $r "+#'#es th very

s+'' 'ns (+#,r ,re#t) t he'$ the+ en00e #n $r!,t#ve

,t#v#t#es s+'' /!s#nesses. Over t#+e% +#,r"#nn,e hs ,+e

t #n,'!e /rer rn0e " serv#,es (,re#t% sv#n0s%

#ns!rn,e% et,.) s &e hve ,+e t re'#e tht the $r n the

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very $r &h ', ,,ess t tr#t#n' "r+' "#nn,#'

#nst#t!t#ns reF!#re vr#ety " "#nn,#' $r!,ts.

The E'eventh :#ve Yer P'n #+s t #n,'!s#ve 0r&th n "ster

re!,t#n " $verty. M#,r :#nn,e ,n ,ntr#/!te #++ense'y

t the "#nn,#' #n,'!s#n " the $r th!t &h#,h #t '' /e

#""#,!'t "r the+ t ,+e !t " the v#,#!s ,y,'e " $verty.

There #s nee t stren0then '' the v#'/'e ,hnne's "

$rv##n0 ,re#t t the $r s!,h s SHG Bn =#n0e

$r0r++es% M#,r :#nn,e Inst#t!t#ns% 3$ert#ve Bns%

Stte "#nn,#' ,r$rt#ns% Re0#n' R!r' Bns n Pr#+ry

A0r#,!'t!r' 3re#t S,#et#es. The stren0th " the +#,r "#nn,e

#n!stry '#es #n #ts #n"r+'#ty n "'e*#/#'#ty &h#,h sh!' /e

$rte,te n en,!r0e.

=n'rs% ',' sh$ee$ers% trers% s!$$'#ers n

$r"ess#n' +ney 'eners% n re't#ves re the #n"r+'

s!r,es " +#,r,re#t "r the $r% /th #n r!r' n !r/n

res.

The se,tr &h#,h #s st#'' #n #ts #n"n,y ",es shrt0e "

e*$er#en,e ,ns!'tnts+n$&ere*$erts. There #s nee t

hve 0 F!'#ty $r"ess#n's% tr#ne #n /est $r,t#,es #n

0vernn,e "r e""e,t#ve ,r$rte 0vernn,e. A nee/se

,$,#ty /!#'#n0 $r0r++e t +eet the reF!#re+ents " ''

,te0r#es " M#,r :#nn,e Or0n#st#ns (M:Os) #s essent#'

t /r#n0 /!t s!st#n/#'#ty #n the se,tr.

I)'O,%'IO)

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[MICRO FINANCE]

M#,r"#nn,e #s e"#ne s ny ,t#v#ty tht #n,'!es the

$rv#s#n " "#nn,#' serv#,es s!,h s ,re#t% sv#n0s% n

#ns!rn,e t '& #n,+e #n#v#!'s &h#,h "'' !st /ve thent#n''y e"#ne $verty '#ne% n $r #n#v#!'s &h#,h "''

/e'& tht $verty '#ne% th the 0' " ,ret#n0 s,#' v'!e.

The ,ret#n " s,#' v'!e #n,'!es $verty ''ev#t#n n the

/rer #+$,t " #+$rv#n0 '#ve'#h $$rt!n#t#es thr!0h

the $rv#s#n " ,$#t' "r +#,r enter$r#se% n #ns!rn,e n

sv#n0s "r r#s +#t#0t#n n ,ns!+$t#n s+th#n0. A 'r0e

vr#ety " ,trs $rv#e +#,r"#nn,e #n In#% !s#n0 rn0e "

+#,r"#nn,e e'#very +eths. S#n,e the "!n#n0 " the

Gr+een Bn #n Bn0'esh% vr#!s ,trs hve enevre

t $rv#e ,,ess t "#nn,#' serv#,es t the $r #n ,ret#ve

&ys. Gvern+ents hve $#'te nt#n' $r0r+s% 7GOs

hve !nerten the ,t#v#ty " r#s#n0 nr "!ns "r n

'en#n0% n s+e /ns hve $rtnere th $!/'#,

r0n#t#ns r +e s+'' #nrs the+se'ves #n $rv##n0

s!,h serv#,es. Th#s hs res!'te #n rther /r e"#n#t#n "

+#,r"#nn,e s ny ,t#v#ty tht tr0ets $r n 'n,+e

#n#v#!'s "r the $rv#s#n " "#nn,#' serv#,es. The rn0e "

,t#v#t#es !nerten #n +#,r"#nn,e #n,'!e 0r!$ 'en#n0%

#n#v#!' 'en#n0% the $rv#s#n " sv#n0s n #ns!rn,e%

,$,#ty /!#'#n0% n 0r#,!'t!r' /!s#ness eve'$+ent

serv#,es. Whtever the "r+ " ,t#v#ty h&ever% the

verr,h#n0 0' tht !n#"#es '' ,trs #n the $rv#s#n "

+#,r"#nn,e #s the ,ret#n " s,#' v'!e.

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[MICRO FINANCE]

Strate!i" Poli"$ Initiati9es

S+e " the +st re,ent strte0#, $'#,y #n#t#t#ves #n the re

" M#,r"#nn,e ten /y the 0vern+ent n re0!'try /#es

#n In# re

Wr#n0 0r!$ n ,re#t t the $r thr!0h SHGs%

7GOs% 7ABARD% 1??5

The 7t#n' M#,r"#nn,e Ts"r,e% 1???

Wr#n0 Gr!$ n :#nn,#' :'&s t the In"r+'

Se,tr (set !$ /y PMO)% 6@@6

M#,r"#nn,e Deve'$+ent n EF!#ty :!n% 7ABARD%

6@@5

Wr#n0 0r!$ n :#nn,#n0 7B:3s /y Bns RBI

A"ti9ities in Mi"rofinan"e

Mi"ro"redit# It #s s+'' +!nt " +ney 'ne t ,'#ent

/y /n r ther #nst#t!t#n. M#,r,re#t ,n /e ""ere% "ten

th!t ,''ter'% t n #n#v#!' r thr!0h 0r!$ 'en#n0.

Mi"ro sa9in!s# These re e$s#t serv#,es tht ''& ne t

sve s+'' +!nts " +ney "r "!t!re !se. O"ten th!t

+#n#+!+ /'n,e reF!#re+ents% these sv#n0s ,,!nts ''&

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[MICRO FINANCE]

h!seh's t sve #n rer t +eet !ne*$e,te e*$enses n

$'n "r "!t!re e*$enses.

Mi"ro insuran"e#It #s syste+ /y &h#,h $e$'e% /!s#nesses

n ther r0n#t#ns +e $y+ent t shre r#s. A,,ess t

#ns!rn,e en/'es entre$rene!rs t ,n,entrte +re n

eve'$#n0 the#r /!s#nesses &h#'e +#t#0t#n0 ther r#ss

""e,t#n0 $r$erty% he'th r the /#'#ty t &r.

emittan"es# These re trns"er " "!ns "r+ $e$'e #n ne$',e t $e$'e #n nther% !s!''y ,rss /rers t "+#'y n

"r#ens.

&e!al e!ulations

Bns #n In# re re0!'te n s!$erv#se /y the Reserve

Bn " In# (RBI) !ner the RBI A,t " 1?9


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[MICRO FINANCE]

M:I 's ss#st thse $e$'e &h ,nnt $y tt' +!nt t n,e.

S% these M:I 0ve the+ ,r n #nst''+ents '#e UB= ,r

"#nn,#n0 s,he+e #s t $$!'r n t +ny $e$'e t#n0vnt0e "r+ th#s s,he+e.

.OM+ FI)A)%I)*#

P#stn #s $r ,!ntry. P!r,hs#n0 $&er " P#stn #s very

'&. S +ny $e$'e re '#v#n0 n rent. They ,nnt hve t

+ny +!nts t $!r,hse h+es. M:Is $rv#e 'ns /e

,ns#er#n0 the#r / st/#'#ty n te se,!r#ty "r #t.

P+SO))+& &OA)S#

M:I 's /t#n $ersnne' 'ns. Thse $e$'e &h hve

$er+nent e+$'y+ent n st/'e /s. Th#s ,re#t ",#'#ty

e$ens n the #n,+e " n #n#v#!'.

'A&++MI &OA)S#

M:I 's $rv#e "#nn,#' # t the st!ents &h ,nnt /re

e!,t#n' e*$enses /!t &nt t st!y. M:I ss#st the+ #n ret!rn

" s+e se,!r#ty n #t &!' hve t $y "ter ,+$'et#n0 the

e!,t#n.

%.A&&+)*+S A), OPPO')I'I+S OF

MI%O FI)A)%I)*#

The Gvern+ent hs #n#,te #ts ''#n0ness t s$ee !$ the $,e

" str!,t!r' re"r+s t +eet the +r ,h''en0es "

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[MICRO FINANCE]

+,%I)* PO/+'(#

The /s#, +tt " the 0vern+ent t e'#+#nte the $verty n

/r#n0 $rs$er#ty #n the ,!ntry. M:I $rv##n0 s+'' 'ns nther ,re#t ",#'#t#es t the $r n 'n,+e 0r!$s &h#,h

re /e0#nn#n0 $s#t#ve ,hn0#n0 '#e the#r stnr " '#v#n0

0r!$ n ern#n0 hve #n,rese

IMPO/I)* SO%IA& I),I%A'OS#

IneF!te ,,ess t $r!,t#ve res!r,es n s,#' serv#,es

hs res!'te '& s,#' #n#,trs n '& e+$'y+ent

$$rt!n#t#es. Th#s s#t!t#n #s ,+$!ne #n r!r' res

&here ,,ess #s +re #""#,!#'t. S% /y $rv##n0 s+'' 'ns

n ,re#t ",#'#t#es they ,n ver ,+e th#s #ss!e n ,n

#+$rve s,#' #n#,trs.

IMPO/I)* '.+ FIS%A& A), BA&A)%+ OF

PA(M+)'S POSI'IO)S#

P#stn #s $r ,!ntry &hse /'n,e " $y+ent '&ys #n

e"#,#t% /e,!se " '& $r!,t#v#ty% ', " res!r,es n ',

" $r!,t#ve +ens $&er. I" MI: $rv#e 'ns ne& /!s#ness

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[MICRO FINANCE]

,n /e est/'#she. An e*$rt " P#stn ,n /e #+$rve

&h#,h ,rete /'n,e " $y+ents.

+S'OI)* I)/+S'O %O)FI+,+)%+#

D!e t $r e,n+y " P#stn #nvestrs re hes#tt#n0 t

#nvest the#r +ney #n P#stn /!t M:Is ,n /st !$. Be,!se

$rv#e 'ns t ',' $e$'e ne& /!s#ness '' st/'e.

E,n+y '' 0 !$ n th#s s#t!t#n +y +t#vte t the+ "r

#nvest#n0 the#r "!ns.

PI)%IP&+S OF MI%O FI)A)%+

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[MICRO FINANCE]

Poor 7eo7le need a 9ariet$ of finan"ial ser9i"es: not

5ust loans.

=#e everyne e'se% the $r nee rn0e " "#nn,#' serv#,estht re ,nven#ent% "'e*#/'e% n ""r/'e. De$en#n0 n

,#r,!+stn,es% they &nt nt n'y 'ns% /!t 's sv#n0s%

#ns!rn,e% n ,sh trns"er serv#,es.

Mi"rofinan"e is a 7owerful tool to fi!ht 7o9ert$.

When $r $e$'e hve ,,ess t "#nn,#' serv#,es% they ,nern +re% /!#' the#r ssets% n ,!sh#n the+se'ves 0#nst

e*tern' sh,s. Pr h!seh's !se +#,r"#nn,e t +ve

"r+ everyy s!rv#v' t $'nn#n0 "r the "!t!re they #nvest #n

/etter n!tr#t#n% h!s#n0% he'th% n e!,t#n.

Mi"rofinan"e is about buildin! 7ermanent lo"al

finan"ial institutions.

:#nn,e "r the $r reF!#res s!n +est#, "#nn,#'

#nst#t!t#ns tht $rv#e serv#,es n $er+nent /s#s. These

#nst#t!t#ns nee t ttr,t +est#, sv#n0s% re,y,'e thse

sv#n0s #nt 'ns% n $rv#e ther serv#,es. As ','

#nst#t!t#ns n ,$#t' +rets +t!re% there '' /e 'ess

e$enen,e n "!n#n0 "r+ nrs n 0vern+ents%

#n,'!#n0 0vern+ent eve'$+ent /ns.

Mi"ro "redit is not the best tool for e9er$one or e9er$

situation.

Dest#t!te n h!n0ry $e$'e th n #n,+e r +ens "

re$y+ent nee ther #ns " s!$$rt /e"re they ,n +e

0 !se " 'ns. In +ny ,ses% ther t's '' ''ev#te

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[MICRO FINANCE]

$verty /etterL"r #nstn,e% s+'' 0rnts% e+$'y+ent n

tr#n#n0 $r0r+s% r #n"rstr!,t!re #+$rve+ents. Where

$ss#/'e% s!,h serv#,es sh!' /e ,!$'e th /!#'#n0 sv#n0s.

'he role of !o9ernment is to enable finan"ial ser9i"es:

not to 7ro9ide them dire"tl$.

7t#n' 0vern+ents sh!' set $'#,#es tht st#+!'te

"#nn,#' serv#,es "r $r $e$'e t the s+e t#+e s $rte,t#n0

e$s#ts. Gvern+ents nee t +#nt#n +,re,n+#,

st/#'#ty% v# #nterest rte ,$s% n re"r#n "r+ #strt#n0

+rets th s!/s##e% h#0he"!'t 'n $r0r+s tht ,nnt

/e s!st#ne.

'he 6e$ bottlene"6 is the shorta!e of stron!

institutions and mana!ers.

M#,r"#nn,e #s s$e,#'#e "#e' tht ,+/#nes /n#n0 th

s,#' 0's. S#''s n syste+s nee t /e /!#'t t '' 'eve's

+n0ers n #n"r+t#n syste+s " +#,r"#nn,e #nst#t!t#ns%

,entr' /ns tht re0!'te +#,r"#nn,e% ther 0vern+ent

0en,#es% n nrs. P!/'#, n $r#vte #nvest+ents #n

+#,r"#nn,e sh!' ",!s n /!#'#n0 th#s ,$,#ty% nt !st

+v#n0 +ney.

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[MICRO FINANCE]

MI%O FI)A)%+ I) I),IA

At $resent 'en#n0 t the e,n+#,''y ,t#ve $r /th r!r'

n !r/n #s $e00e t r!n Rs ;@@@ ,rres #n the In#n

/ns ,re#t !tstn#n0. As 0#nst th#s% ,,r#n0 t even the

+st ,nservt#ve est#+tes% the tt' e+n "r ,re#t

reF!#re+ents "r th#s $rt " In#n s,#ety #s s+e&here

r!n Rs 6%@@%@@@ ,rres.

De$r#ve " the /s#, /n#n0 ",#'#t#es% the r!r' n se+#

!r/n In#n +sses re st#'' re'y#n0 n #n"r+' "#nn,#n0

#nter+e#r#es '#e +ney 'eners% "+#'y +e+/ers% "r#ens et,.

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[MICRO FINANCE]

F)%'IO)S OF MI%O FIA)A)%+

S+'' 'ns% ty$#,''y "r &r#n0 ,$#t'

In"r+' $$r#s' " /rr&ers n #nvest+ents

A,,ess t re$et n 'r0er 'ns /se n e/t ,$,#ty

n re$y+ent $er"r+n,e

Se,!re sv#n0s $r!,ts.

T $rv#e "#nn,#n0 ",#'#t#es% th r th!t ,''ter'

Se,!r#ty

T ,,e$t e$s#ts.

T en,!r0e #nvest+ents #n s!,h ,tt0e #n!str#es n

#n,+e 0enert#n0 $re,ts "r $r $ersns s +y/e

$res,r#/e

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18/70

[MICRO FINANCE]

T +/#'#e n $rv#e "#nn,#' n te,hn#,'

ss#stn,e n tr#n#n0 t +#,r enter$r#ses.

T #nvest #n shres " ny/y ,r$rte% the /e,t#ve "

&h#,h #s t $rv#e +#,r"#nn,e serv#,es t $r

$ersns.

Mi"rofinan"e So"ial As7e"ts

M#,r "#nn,#n0 #nst#t!t#ns s#0n#"#,nt'y ,ntr#/!te t 0ener

eF!'#ty n &+ens e+$&er+ent s &e'' s $r $r

eve'$+ent n ,#v#' s,#ety stren0then#n0. 3ntr#/!t#n t

&+ens /#'#ty t ern n #n,+e 'e t the#r e,n+#,

e+$&er+ent% #n,rese &e'' /e#n0 " &+en n the#r

"+#'#es n er s,#' n $'#t#,' e+$&er+ent.

M#,r"#nn,e $r0r+s tr0et#n0 &+en /e,+e +r $'n

" $verty ''ev#t#n n 0ener strte0#es #n the 1??@s.

In,res#n0 ev#en,e " the ,entr'#ty " 0ener eF!'#ty t

$verty re!,t#n n &+ens h#0her ,re#t re$y+ent rtes

'e t 0ener' ,nsens!s n the es#r/#'#ty " tr0et#n0

&+en.

In# ty hs n e*tens#ve /n#n0 #n"rstr!,t!re ,+$r#s#n0

ver 9@%@@@ r!r' n se+#!r/n /rn,hes " ,++er,#'

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[MICRO FINANCE]

/ns% ver 1


20/70

[MICRO FINANCE]

A's the $'#,y #n#t#t#ve " Ns,#' /n#n0 ,n,e$t es,r#/e

s the e'evt#n " the ent#t'e+ents " $rev#!s'y

#svnt0e 0r!$s t "r+' ,re#t even #" th#s +y ent#' &een#n0 " the ,nvent#n' /n#n0 $r,t#,es 'e t the

nt#n'#st#n " ,++er,#' /ns #n 1?8?% $t#n " #re,t

'en#n0 $r0r++es t r!r' res n eve'$+ent " ,re#t

#nst#t!t#ns s!,h s Re0#n' R!r' Bns (RRBs).

Gvern+ent #n#t#t#ves !r#n0 the :!rth P'n ",!se n

+r0#n' "r+ers n 0r#,!'t!r' '/!rers /r#n0#n0 #n#v#!'

"+#'y s the /s#, /rrn0 !n#t. Inte0rte s!st#n/'e

#n,+e 0enert#n0 ,t#v#ty &s $r+te thr!0h s!/s##e

'en#n0 !ner Inte0rte R!r' Deve'$+ent Pr0r++e

(IRDP) n #ts s!/seF!ent vr#t#ns #n,'!#n0 the ,!rrent se'"

e+$'y+ent $r0r++e n&n s S&rnynt# Gr+

S&r0r Yn (SGSY)

S+A %o-o7erati9e Ban6 1;


21/70

[MICRO FINANCE]

A's% the h#0h trns,t#n ,sts #n,!rre #n 'en#n0 t the $r

+e the "r+' 'en#n0 0en,#es 'eve the $r !n/ne.

The In#n ,$ert#ve ,re#t str!,t!re +ent t e+$&er the

$r &s nt very s!,,ess"!' s #t &s ,$t!re /y "e&

$&er"!' n /e,!se " e*,ess#ve 0vern+ent' #nter"eren,e

n re0!'t#n.

The ser,h "r n 'ternt#ve t the "r+' /n#n0 se,tr nn e""e,t#ve "#nn,#' syste+ t ,ter t the nees " the $r%

es$e,#''y the r!r' $r% ,nt#n!e.

The r#0#n " +#,r"#nn,e ,n /e tr,e t the est/'#sh+ent "

the SEWA ,$ert#ve /n #n 1?;


22/70

[MICRO FINANCE]

es$e,#''y &+en. A s+'' +!nt " 0rnt 's ,,+$n#e

the 'ns s s t /!#' ,$,#ty " the #nter+e#tes n en

!sers. The $r0r++e # nt ,h#eve the es#re /e,t#ve. A'r0e n!+/er " 7GOs &ere nt /'e t !$ s,'e the#r 'en#n0

$ert#ns /e,!se " #""#,!'t#es '#e #nterest rte ,$ n

'en#n0% se,!r#ty st#$!'t#ns et,. SIDBI rer#ente #ts M#,r

:#nn,e Pr0r++e #n 1??? /y ress#n0 the &eness " the

$#'t s,he+e% th n /e,t#ve t ,rete nt#n' net&r "

'r0e n v#/'e M#,r :#nn,e Inst#t!t#ns "r+ the "r+' n

#n"r+' se,tr. The $r0r++e $rv#es nee /se ss#stn,e

/y &y " ter+ 'ns t $rtner #nst#t!t#ns "r +eet#n0 the#r n

'en#n0 "!n reF!#re+ents. Its $r0r++e t "" s'&'y. The

/n &s /'e t #+$rve #ts $rt"'# /y 1@@ e,h yer "r

the 'st three yers #n r&. It h sn,t#ne Rs.96@ ,rre

"#nn,#' ss#stn,e !r#n0 6@@8 s 0#nst Rs 1>?.;9 ,rre

!r#n0 6@@5.

S.*-Ban6 &in6a!e Pro!ramme 1;;=

In 1??8% Reserve Bn " In# #n,'!e "#nn,#n0 " SHGs s

+#n stre+ ,t#v#ty " /ns !ner the $r#r#ty se,tr 'en#n0

$r0r++es. The SHG Bn '#n0e $r0r++e ,vere ver

6


23/70

[MICRO FINANCE]

Se'" he'$ 0r!$s (SHGs) $'y ty +r r'e #n $verty

''ev#t#n #n r!r' In#. A 0rn0 n!+/er " $r $e$'e

(+st'y &+en) #n vr#!s $rts " In# re +e+/ers " SHGs

n ,t#ve'y en00e #n sv#n0s n ,re#t (S3)% s &e'' s #n

ther ,t#v#t#es (#n,+e 0enert#n% nt!r' res!r,es

+n0e+ent% '#ter,y% ,h#' ,re n n!tr#t#n% et,.). The S3

",!s #n the SHG #s the +st $r+#nent e'e+ent n ""ers

,hn,e t ,rete s+e ,ntr' ver ,$#t'% '/e#t #n very s+''

+!nts. The SHG syste+ hs $rven t /e very re'evnt n

e""e,t#ve #n ""er#n0 &+en the $ss#/#'#ty t /re 0r!''y

&y "r+ e*$'#tt#n n #s't#n.

.ow self-hel7 !rou7s wor6

7ABARD (1??;) e"#nes SHGs s s+''% e,n+#,''y

h+0en!s ""#n#ty 0r!$s " r!r' $r% v'!ntr#'y "r+e t

sve n +!t!''y ,ntr#/!te t ,++n "!n t /e 'ent t #ts

+e+/ers s $er the 0r!$ +e+/ersQ e,#s#n.

Mst SHGs #n In# hve 1@ t 65 +e+/ers% &h ,n /e e#ther

n'y +en% r n'y &+en% r n'y y!th% r +#* " these.

As &+enQs SHGs r sn0h hve /een $r+te /y e

rn0e " 0vern+ent n nn 0vern+ent' 0en,#es% they

n& +e !$ ?@ " '' SHGs.

23


24/70

[MICRO FINANCE]

The r!'es n re0!'t#ns " SHGs vry ,,r#n0 t the

$re"eren,es " the +e+/ers n thse ",#'#tt#n0 the#r

"r+t#n.

A ,++n ,hr,ter#st#, " the 0r!$s #s tht they +eet

re0!'r'y (ty$#,''y n,e $er &ee r n,e $er "rtn#0ht) t

,''e,t the sv#n0s "r+ +e+/ers% e,#e t &h#,h +e+/er t

0#ve 'n% #s,!ss #nt ,t#v#t#es (s!,h s tr#n#n0% r!nn#n0 "

,++!n' /!s#ness% et,.)% n t +#t#0te ny ,n"'#,ts tht

+#0ht r#se.

Mst SHGs hve n e'e,te ,h#r$ersn% e$!ty% tres!rer%

n s+et#+es ther ""#,e h'ers.

Mst SHGs strt th!t ny e*tern' "#nn,#' ,$#t' /y

sv#n0 re0!'r ,ntr#/!t#ns /y the +e+/ers.

These ,ntr#/!t#ns ,n /e very s+'' (e.0. 1@ Rs $er &ee).

A"ter $er# " ,ns#stent sv#n0s (e.0. 8 +nths t ne yer)

the SHGs strt t 0#ve 'ns "r+ sv#n0s #n the "r+ " s+''

#ntern' 'ns "r +#,r enter$r#se ,t#v#t#es n ,ns!+$t#n.

On'y thse SHGs tht hve !t#'#e the#r &n "!ns &e'' ress#ste th e*tern' "!ns thr!0h '#n0es th /ns n

ther "#nn,#' #nter+e#r#es.

H&ever% #t #s 0ener''y ,,e$te tht SHGs "ten nt

#n,'!e the $rest " the $r% "r resns s!,h s

24


25/70

[MICRO FINANCE]

a So"ial fa"tors(the $rest re "ten thse &h re s,#''y

+r0#n'#e /e,!se " ,ste ""#'#t#n n thse &h re

+st se$t#,' " the $tent#' /ene"#ts " ,''e,t#ve ,t#n).

b +"onomi" fa"tors (the $rest "ten nt hve the

"#nn,#' res!r,es t ,ntr#/!te t the sv#n0s n $y

+e+/ersh#$ "ees they re "ten the nes &h +#0rte !r#n0

the 'en sesn% th!s +#n0 0r!$ +e+/ersh#$ #""#,!'t).

" Intrinsi" biases of the im7lementin! or!ani>ations(s the

$rest " the $r re the +st #""#,!'t t re,h n +t#vte%

#+$'e+ent#n0 0en,#es ten t 'eve the+ !t% $re"err#n0 t

",!s n the ne*t &e'th ,te0ry).

Sour"es of "a7ital and lin6s between S.*s and

Ban6s

SHGs ,n n'y "!'"#'' r'e #n the r!r' e,n+y #" 0r!$

+e+/ers hve ,,ess t "#nn,#' ,$#t' n +rets "r the#r

$r!,ts n serv#,es.

Wh#'e the 0r!$s #n#t#''y 0enerte the#r &n sv#n0s thr!0hthr#"t (&here/y thr#"t #+$'#es sv#n0s ,rete /y $st$n#n0

'+st ne,essry ,ns!+$t#n% &h#'e sv#n0s #+$'y the

e*#sten,e " s!r$'!s &e'th)% the#r #+ #s "ten t '#n !$ th

"#nn,#' #nst#t!t#ns #n rer t /t#n "!rther 'ns "r

#nvest+ents #n r!r' enter$r#ses.

25


26/70

[MICRO FINANCE]

7GOs n /ns re 0#v#n0 'ns t SHGs e#ther s +t,h#n0

'ns (&heres the 'n +!nt #s $r$rt#nte t the 0r!$Qs

sv#n0s) r s "#*e +!nts% e$en#n0 n the 0r!$Qs re,r" re$y+ent% re,++ent#ns /y 0r!$ ",#'#ttrs%

,''ter's $rv#e% et,.

.ow S.*s sa9e

Se'"he'$ 0r!$s +/#'#e sv#n0s "r+ the#r +e+/ers% n

+y then n'en these "!ns t ne nther% !s!''y t

$$rent'y h#0h rtes " #nterest &h#,h re"'e,t the +e+/ers

!nerstn#n0 " the h#0h ret!rns they ,n ern n the s+''

s!+s #nveste #n the#r +#,renter$r#ses% n the even h#0her

,st " "!ns "r+ +ney 'eners.

I" they nt sh t !se the +ney% they +y e$s#t #t #n

/n.

I" the +e+/ers nee "r "!ns e*,ees the 0r!$s

,,!+!'te sv#n0s% they +y /rr& "r+ /n r ther

26


27/70

[MICRO FINANCE]

r0n#t#n% s!,h s +#,r"#nn,e nn0vern+ent

r0n#t#n% t !0+ent the#r &n "!n.

The syste+ #s very "'e*#/'e.

The 0r!$ 00re0tes the s+'' #n#v#!' sv#n0 n

/rrn0 reF!#re+ents " #ts +e+/ers% n the /n nees

n'y t +#nt#n ne ,,!nt "r the 0r!$ s s#n0'e ent#ty.

The /ner +!st ssess the ,+$eten,e n #nte0r#ty " the

0r!$ s +#,r/n% /!t n,e he hs ne th#s he nee nt,n,ern h#+se'" th the #n#v#!' 'ns +e /y the 0r!$ t

#ts +e+/ers% r the !ses t &h#,h these 'ns re $!t.

He ,n tret the 0r!$ s s#n0'e ,!st+er% &hse tt'

/!s#ness n trns,t#ns re $r//'y s#+#'r #n +!nt t the

ver0e "r h#s nr+' ,!st+ers% /e,!se they re$resent the

,+/#ne /n#n0 /!s#ness " s+e t&enty N+#,r,!st+ers.

Any /n /rn,h ,n hve s+'' r 'r0e n!+/er " s!,h

,,!nts% th!t hv#n0 t ,hn0e #ts +eths " $ert#n.

Un'#e +ny ,!st+ers% e+n "r+ SHGs #s nt $r#,e

sens#t#ve. I''#terte v#''0e &+en re s+et#+es /etter /ners

thn s+e th +re $r"ess#n' F!'#"#,t#ns.

They n& tht r$# ,,ess t "!ns #s +re #+$rtnt thn

the#r ,st% n they 's n&% even th!0h they +#0ht nt /e

/'e t ,',!'te the "#0!res% tht the ty$#,' +#,renter$r#se

erns &e'' ver 5@@ ret!rn n the s+'' s!+ #nveste #n #t

(Hr$er% M% 1??;% $. 15).

27


28/70

[MICRO FINANCE]

The 0r!$s th!s ,hr0e the+se'ves h#0h rtes " #nterest they

re h$$y t te vnt0e " the 0ener!s s$re tht the

7ABARD s!/s##e /n 'en#n0 rte " 16 ''&s the+%/!t they re 's ''#n0 t /rr& "r+ 7GOM:Is &h#,h n

'en "!ns "r+ SIDBI t 15% r "r+ Nne& 0enert#n

#nst#t!t#ns s!,h s Bs#* :#nn,e t 1>.5 r 61.

S.*s-Ban6 &in6a!e Model

7ABARD #s $resent'y $ert#n0 three +e's " '#n0e "

/ns th SHGs n 7GOs

Model ? 1#

28


29/70

[MICRO FINANCE]

In th#s +e'% the /n #tse'" ,ts s Se'" He'$ Gr!$

Pr+t#n0 Inst#t!t#n (SHPI). It tes #n#t#t#ves #n "r+#n0 the

0r!$s% n!rt!res the+ ver $er# " t#+e n then $rv#es,re#t t the+ "ter st#s"y#n0 #tse'" /!t the#r +t!r#ty t

/sr/ ,re#t. A/!t 18 " SHGs n 19 " 'n +!nts

re !s#n0 th#s +e' (s " Mr,h 6@@6).

Model ? 2#

In th#s +e'% 0r!$s re "r+e /y 7GOs (#n +st " the

,ses) r /y 0vern+ent 0en,#es.

The 0r!$s re n!rt!re n tr#ne /y these 0en,#es.

The /n then $rv#es ,re#t #re,t'y t the SHGs% "ter

/serv#n0 the#r $ert#ns n +t!r#ty t /sr/ ,re#t.

Wh#'e the /n $rv#es 'ns t the 0r!$s #re,t'y% the

",#'#tt#n0 0en,#es ,nt#n!e the#r #nter,t#ns th the SHGs.

Mst '#n0e e*$er#en,es /e0#n th th#s +e' th 7GOs

$'y#n0 +r r'e.

Th#s +e' hs 's /een $$!'r n +re ,,e$t/'e t

/ns% s s+e " the #""#,!'t "!n,t#ns " s,#' yn+#,s re

e*tern'#e.

A/!t ;5 " SHGs n ;> " 'n +!nts re !s#n0 th#s

+e'.

Model ? 3#

29


30/70

[MICRO FINANCE]

D!e t vr#!s resns% /ns #n s+e res re nt #n

$s#t#n t even "#nn,e SHGs $r+te n n!rt!re /y ther

0en,#es.

In s!,h ,ses% the 7GOs ,t s /th ",#'#ttrs n +#,r

"#nn,e #nter+e#r#es. :#rst% they $r+te the 0r!$s% n!rt!re

n tr#n the+ n then $$r,h /ns "r /!' 'ns "r n

'en#n0 t the SHGs. A/!t ? " SHGs n 19 " 'n

+!nts re !s#n0 th#s +e'.

%om7arati9e Anal$sis of Mi"ro-finan"e Ser9i"es offered to

the 7oor

S!r,e R. Ar!n,h'+ A'ternt#ve Te,hn'0#es #n the

In#n M#,r "#nn,e In!stry.

30


31/70

[MICRO FINANCE]

Mi"ro Finan"e Institutions MFIs#

M:Is re n e*tre+e'y heter0ene!s 0r!$ ,+$r#s#n0

7B:3s% s,#et#es% tr!sts n ,$ert#ves.

They re $rv#e "#nn,#' s!$$rt "r+ e*tern' nrs n

$e* #nst#t!t#ns #n,'!#n0 the Rshtr#y Mh#' Ksh (RMK)%

SIDBI :!nt#n "r +#,r,re#t n 7ABARD n e+$'y

vr#ety " &ys "r ,re#t e'#very.

S#n,e 6@@@% ,++er,#' /ns #n,'!#n0 Re0#n' R!r' Bns

hve /een $rv##n0 "!ns t M:Is "r n 'en#n0 t $r

,'#ents.

Th!0h #n#t#''y% n'y hn"!' " 7GOs &ere #nt "#nn,#'

#nter+e#t#n !s#n0 vr#ety " e'#very +eths% the#r

n!+/ers hve #n,rese ,ns#er/'y ty.

Wh#'e there #s n $!/'#she t n $r#vte M:Is $ert#n0 #n

the ,!ntry% the n!+/er " M:Is #s est#+te t /e r!n >@@.

31


32/70

[MICRO FINANCE]

&e!al Forms of MFIs in India

'$7es of MFIs +stimated

)umber@

&e!al A"ts under whi"h

e!istered

1. )ot for Profit MFIs

.) 7GO M:Is

8@ r

s#+#'r Prv#n,#' A,ts

In#n Tr!st A,t% 1>>6

/.) 7n$r"#t 3+$n#es 1@ Se,t#n 65 " the 3+$n#es A,t%1?58

6. Mutual Benefit MFIs

.) M!t!''y A#e

3$ert#ve S,#et#es

(MA3S) n s#+#'r'y set

!$ #nst#t!t#ns

6@@ t 65@ M!t!''y A#e 3$ert#ve

S,#et#es A,t en,te /y Stte

Gvern+ent

9. For Profit MFIs

.) 7nBn#n0 :#nn,#'

3+$n#es (7B:3s)

8 In#n 3+$n#es A,t% 1?58

Reserve Bn " In# A,t% 1?9@ "

the#r ,sts. Th#s #s $rt'y e*$'#ne /y the ",t tht &h#'e the

,st " s!$erv#s#n " ,re#t #s h#0h% the 'n v'!+es n

'n s#e #s '&. It hs 's /een ,++ente tht M:Is $ss

n the h#0her ,st " ,re#t t the#r ,'#ents &h re N#nterest

#nsens#t#ve "r s+'' 'ns /!t +y nt /e s s 'n s#es

#n,rese. It #s% there"re% ne,essry "r M:Is t eve'$

strte0#es "r #n,res#n0 the rn0e n v'!+e " the#r

"#nn,#' serv#,es.

2 &a"6 of %a7ital

51


52/70

[MICRO FINANCE]

The se,n re " ,n,ern "r M:Is% &h#,h re n the

0r&th $th% #s tht they ",e $!,#ty " &ne "!ns. Th#s

#s ,r#t#,' ,nstr#nt #n the#r /e#n0 /'e t s,'e !$. Mny" the M:Is re s,#''y r#ente #nst#t!t#ns n nt hve

eF!te ,,ess t "#nn,#' ,$#t'. As res!'t they hve

h#0h e/t eF!#ty rt#s. Present'y% there #s n re'#/'e

+e,hn#s+ #n the ,!ntry "r +eet#n0 the eF!#ty

reF!#re+ents " M:Is.

The IPO #ss!e /y Me*#, /se N3+$rt+s &s nt

,,e$te /y $!r#sts s they th!0ht #t e"#e the +#ss#n "

n M:I. The IPO 's /r!0ht "rth the #ss!e " v'!t#n "

n M:I.

The / v'!e +!'t#$'e #s ,!rrent'y the +#nnt v'!t#n

+eth'0y #n +#,r"#nn,e #nvest+ents. In the ,se "

strt !$ M:Is% !s#n0 / v'!e +!'t#$'e es nt

!st#,e t the !ner'y#n0 v'!e " the /!s#ness. Ty$#,''y%

strt !$s re 'ss +#n0 n hen,e the / v'!e

,nt#n!''y re!,es ver t#+e !nt#' they h#t /re even $#nt.

A / v'!e +!'t#$'#er t v'!e strt !$s &!' e,rese

the v'!e s the r0n#t#n !ses !$ ,$#t' t /!#' #ts

/!s#ness% th!s ,,ent!t#n0 the ne0t#ve rther thn the

$s#t#ve.

3 Finan"ial ser9i"e deli9er$

Anther ,h''en0e ",e /y M:Is #s the #n/#'#ty t ,,ess

s!$$'y ,h#n. Th#s ,h''en0e ,n /e ver,+e /y e*$'r#n0

syner0#es /et&een +#,r"#nn,e #nst#t!t#ns th e*$ert#se#n ,re#t e'#very n ,++!n#ty +/#'#t#n n

52


53/70

[MICRO FINANCE]

/!s#nesses $ert#n0 th $r!,t#n s!$$'y ,h#ns s!,h s

0r#,!'t!re. The 'tter $'yers &h /r#n0 th the+ n

!nerstn#n0 " s#+#'r ,'#ent se0+ents% /#'#ty t ,rete+#,renter$r#se $$rt!n#t#es n ''#n0ness t n!rt!re

the+% &!' /e een n #re,t#n0 +#,r"#nn,e t s!,h

$$rt!n#t#es. Th#s en/'es M:Is t #n,rese the#r ,'#ent /se

t n #t#n' ,sts.

Thse /!s#nesses tht $r,!re "r+ r!r' In# s!,h s

0r#,!'t!re n #ry "ten #ent#"y "#nn,e s ,nstr#nt t

v'!e ,ret#n. S!,h /!s#nesses +y "#n ,+$'e+entr#t#es

/et&een n M:Is s#''s #n +n0e+ent " ,re#t $r,esses

n the#r &n stren0ths #n s!$$'y ,h#n +n0e+ent.

IT3 =#+#te% th #ts strn0 s!$$'y ,h#n '0#st#,s% r!r'

$resen,e n n #nnvt#ve trns,t#n $'t"r+% the

e,h!$'% hs strte e*$'r#n0 syner0#es th "#nn,#'

serv#,e $rv#ers #n,'!#n0 M:Is thr!0h $#'ts th

ve0et/'e enrs n "r+ers. S#+#'r'y% 'r0e :Is s!,h s

S$nn "resee 'r0er r'e "r the+se'ves #n the r!r'

e,n+y /'y s!$$rte /y v'!e ,ret#n0 $rtnersh#$s th

$'yers s!,h s Mh#nr n Western Un#n Mney

Trns"er.

IT3 hs #n#t#te $#'t $re,t ,''e N$!sh,rts s,he+e

'n0 th BASI2 ( +#,r"#nn,e r0n#t#n #n

Hyer/). Uner th#s $#'t% #t &rs th t&enty &+en

he ' venrs se''#n0 ve0et/'es " r!n 1@ 15 0s

$er y. BASI2 e*tens &r#n0 ,$#t' 'ns "

Rs.1@%@@@ % ,$,#ty /!#'#n0 n /!s#ness eve'$+ent

53


54/70

[MICRO FINANCE]

s!$$rt t the &+en. IT3 $rv#es s!$$rt thr!0h s!$$'y

,h#n #nnvt#ns /y

1. M#n0 the 3h!$' :resh stres v#'/'e t the

venrs% th#s v#s the hss'e " /r0#n#n0 n

!nre'#/#'#ty t the tr#t#n' +n#s (',' ve0et/'e

+rets). The &+en re /'e t re$'en#sh the st, "r+

the stres s +ny t#+es #n the y s reF!#re. Th#s hs

$s#t#ve #+$'#,t#ns "r F!'#ty " the $r!,e s' t

the en ,ns!+er.

6. 3nt#n!!s'y e*$er#+ent#n0 t #n,rese e""#,#en,y%

!0+ent#n0 #n,+es n re!,#n0 ener0y !s0e ,rss

the v'!e ,h#n. :r #nstn,e% #t hs "r0e $rtnersh#$

th 7t#n' Inst#t!te " Des#0n (7ID)% $#neer #n the

"#e' " es#0n e!,t#n n reser,h% t es#0n !ser

"r#en'y $!sh,rts tht ,n re!,e the $hys#,' /!ren.9. T#n0 'essns "r+ the $hr+,e!t#,' n te'e,+

se,tr t #ent#"y te,hn'0#es tht ,n sve ener0y n

ens!re te+$ert!re ,ntr' #n $!sh ,rts #n rer t

+#nt#n F!'#ty " the ve0et/'es thr!0h!t the y.

The +e' !0+ents the #n,+es " the venrs "r+

r!n Rs.9@


55/70

[MICRO FINANCE]

Re,r!#t+ent n retent#n #s the +r ,h''en0e ",e /y

M:Is s they str#ve t re,h +re ,'#ents n e*$n the#r

0e0r$h#,' s,$e. Attr,t#n0 the r#0ht t'ent $rves#""#,!'t /e,!se ,n#tes +!st hve% s $rereF!#s#te%

+#nset tht "#ts th the r0n#t#ns +#ss#n.

Mny +#nstre+ ,++er,#' /ns re n& enter#n0

+#,r"#nn,e% &h re $,h#n0 st"" "r+ M:Is n M:Is

re !n/'e t ret#n the+ "r ther / $$rt!n#t#es.

>5 " the $rest ,'#ents serve /y +#,r"#nn,e re

&+en. H&ever% &+en +e !$ 'ess thn h'" " ''

+#,r"#nn,e st"" +e+/ers% n "#'' even "e&er " the

sen#r +n0e+ent r'es. The ,h''en0e #n +st ,!ntr#es

ste+s "r+ ,!'t!r' nt#ns " &+ens r'es% "r e*+$'e%

&h#'e &+en re s#n0'e there +#0ht /e 0reter ''#n0ness

n the $rt " &+ens "+#'#es t 'et the+ &r s "rnt

'#ne st""% /!t s sn s they +rry n ,ert#n'y n,e they

strt hv#n0 ,h#'ren% #t /e,+es !n,,e$t/'e. =n0

#stn,es n 'n0 h!rs &y "r+ the "+#'y re #""#,!'t

"r &+en t ,,++te n "r the#r "+#'#es t

!nerstn.

Mi"roinsuran"e

:#rst /#0 #ss!e #n the +#,r#ns!rn,e se,tr #s eve'$#n0

$r!,ts tht re''y res$n t the nees " ,'#ents n #n

&y tht #s ,++er,#''y v#/'e.

Se,n'y% there #s strn0 nee t enhn,e e'#very ,hnne's.

These e'#very ,hnne's hve /een re't#ve'y &e s "r.

55


56/70

[MICRO FINANCE]

M#,r#ns!rn,e ,+$n#es ""er +#n#+' $r!,ts n

nt &nt t 0 "r&r n ""er ,+$'e* $r!,ts tht +y

res$n /etter. M#,r#ns!rn,e nees e'#very ,hnne' thths esy ,,ess t the 'n,+e +ret% n $re"er/'y

ne tht hs /een en00e #n "#nn,#' trns,t#ns s tht

they hve ,ntr's "r +n0#n0 ,sh n the /#'#ty t tr,

#""erent #n#v#!'s.

Th#r'y% there #s nee "r +ret e!,t#n. Pe$'e e#ther

hve n #n"r+t#n /!t

+#,r#ns!rn,e r they hve ne0t#ve tt#t!e t&rs #t.

We hve t ,!nter tht. We hve t s+eh& 0et $e$'e

th!t hv#n0 t s#t &n t t/'e t !nerstn &ht

#ns!rn,e #s% n &hy #t /ene"#ts the+. Tht '' he'$ t

e+yst#"y +#,r#ns!rn,e s tht &hen 0ents ,+e% $e$'e

re ''#n0 t en00e th the+.

= Ad9erse sele"tion and moral ha>ard

The #nt '#/#'#ty +e,hn#s+ hs /een re'#e !$n t

ver,+e the tn #ss!es " verse se'e,t#n n +r'

hr. The 0r!$ 'en#n0 +e's re ,nt#n0ent n the

v#'/#'#ty " s#''e res!r,es "r 0r!$ $r+t#n n

ent#' 0estt#n $er# " s#* +nths t ne yer. H&ever%

there #s nt s!""#,#ent !nerstn#n0 " the r#vers " e"!'t

n ,re#t r#s t the 'eve' " the #n#v#!'. Th#s hs

,nstr#ne the eve'$+ent " #n#v#!' +e's " +#,r

"#nn,e. The 0r!$ +e' &s n #nnvt#n t ver,+e

the s$e,#"#, #ss!e " the F!'#ty " the $rt"'#% 0#ven the#n/#'#ty " the $r t ""er ,''ter'. H&ever% "r+ the

56


57/70

[MICRO FINANCE]

$ers$e,t#ve " s,'#n0 !$ +#,r "#nn,#' serv#,es% #t #s

#+$rtnt t $r,t#ve'y #s,ver +e's tht '' en/'e

#re,t "#nn,e t #n#v#!'s.

Mi"ro Insuran"e

M#,r #ns!rn,e sh!' /e $er,e#ve s ey serv#,e #n the

"#nn,#' nees $,0e " the $e$'e n #n ,n!n,t#n th

+#,r sv#n0s n +#,r ,re#t ,!' 0 'n0 &y #n ee$#n0

the v!'ner/'e se0+ent &y "r+ the $verty tr$ n ,!'/e n #nte0r' ,+$nent " "#nn,#' #n,'!s#n.

The Ins!rn,e Re0!'try n Deve'$+ent A!thr#ty (IRDA)

hs nt#"#e M#,r Ins!rn,e Re0!'t#ns #n 7ve+/er% 6@@5

th ",!s n the #re,t#n% es#0n n e'#very " the $r!,ts

#n,'!#n0 t#e !$ th '#"e n nn '#"e #ns!rn,e $'yers "r

#nte0rt#n " $r!,t t ress vr#!s r#ss% #ntr!,t#n "

57


58/70

[MICRO FINANCE]

stn'ne M#,r Ins!rn,e e'#very ,hnne' ,ns#st#n0 "

7GO% SHG n M:Is.% en'r0#n0 the serv#,e ,t#v#t#es entr!ste

t +#,r #ns!rn,e 0ent% #ss!e " P'#,y ,!+ents #n s#+$'evern,!'r 'n0!0e et,.

The IRDA +y ,nt#n!e t 0#ve eF!te $r#r#ty t the +#,r

#ns!rn,e se,tr th ",!s n re+v#n0 the ,nstr#nts n

"!rther eve'$#n0 the se,tM#,r #ns!rn,e #s #n,res#n0'y

""ere /y M:Is ,t#n0 s 0ents " the #ns!rn,e ,+$n#es.

=#"e #ns!rn,e #s ,++n +n0 M:I +e+/ers n s+e "

the +e+/ers re 's v#'#n0 sset #ns!rn,e% +#n'y 'n

"#nn,e ssets. Ins!rn,e #s 'ess es$re !ner the SHG

+e'. M:Is n ther ,#v#' s,#ety r0n#t#ns re /e0#nn#n0

t ""er he'th #ns!rn,e% &h#,h #s " 0retest re'evn,e "r

$verty ''ev#t#n.7ABARD +y ,ns#er ,r#nt#n0 th

vr#!s #ns!rn,e ,+$n#es% SIDBI% M#n#stry " R!r'Deve'$+ent% M#n#stry " SSI% 7GOs n the#r ss,#t#ns t

/r#n0 !t "'e*#/'e +#,r #ns!rn,e s,he+es% ,ver#n0 nt n'y

'n "#nn,e ssets /!t 's '#"e% he'th% ,r$% n#+'

h!s/nry% et, .

+S+A%. M+'.O,O&O*(

The$r,ess!se t ,''e,t #n"r+t#nn t"r the $!r$se

" +#n0/!s#nesse,#s#ns#s n&n s reser,h

+eth'0y. The +eth'0y+y #n,'!e$!/'#,t#n

58
http://www.businessdictionary.com/definition/process.htmlhttp://www.businessdictionary.com/definition/information.htmlhttp://www.businessdictionary.com/definition/data.htmlhttp://www.businessdictionary.com/definition/maker.htmlhttp://www.businessdictionary.com/definition/business.htmlhttp://www.businessdictionary.com/definition/decision.htmlhttp://www.businessdictionary.com/definition/methodology.htmlhttp://www.businessdictionary.com/definition/publication.htmlhttp://www.businessdictionary.com/definition/process.htmlhttp://www.businessdictionary.com/definition/information.htmlhttp://www.businessdictionary.com/definition/data.htmlhttp://www.businessdictionary.com/definition/maker.htmlhttp://www.businessdictionary.com/definition/business.htmlhttp://www.businessdictionary.com/definition/decision.htmlhttp://www.businessdictionary.com/definition/methodology.htmlhttp://www.businessdictionary.com/definition/publication.html


59/70

[MICRO FINANCE]

reser,h% #nterv#e&s% s!rveysn ther reser,h te,hn#F!es%

n ,!' #n,'!e /th $resent n h#str#,' #n"r+t#n.

.SO%+S#

Primar$ sour"es re r#0#n' +ter#'stht hve nt /een

'tere r #strte #n ny &y. In"r+t#n "r &h#,h the

&r#ter hs n $ersn' n&'e0e #s nt $r#+ry% 'th!0h #t

+y /e !se /y h#str#ns#n the /sen,e " $r#+ry

s!r,e.

In the st!y " h#stry s n ,e+#, #s,#$'#ne% $r#+ry

s!r,e ('s ,''e r#0#n' s!r,e r ev#en,e) #s n

rte",t% ,!+ent% re,r#n0% r ther s!r,e "

#n"r+t#n tht &s ,rete t the t#+e !ner st!y.

It serves s n r#0#n' s!r,e " #n"r+t#n /!t the

t$#,.

Se"ondar$ sour"es#

It #nv'ves 0ener'#t#n% n'ys#s% synthes#s% #nter$rett#n%

r ev'!t#n " the r#0#n' #n"r+t#n.

Primarynsecondaryre re't#ve ter+s% n s+e s!r,es

+y /e ,'ss#"#e s $r#+ry r se,nry% e$en#n0 n

h& #t #s !se.+am7les of se"ondar$ sour"es in"lude#

A !rn'+0#ne rt#,'e &h#,h #nter$rets r rev#e&s

$rev#!s "#n#n0s A h#stry te*t/

59
http://www.businessdictionary.com/definition/research.htmlhttp://www.businessdictionary.com/definition/interview.htmlhttp://www.businessdictionary.com/definition/survey.htmlhttp://www.businessdictionary.com/definition/technique.htmlhttp://en.wikipedia.org/wiki/Documenthttp://en.wikipedia.org/wiki/Historianhttp://www.businessdictionary.com/definition/research.htmlhttp://www.businessdictionary.com/definition/interview.htmlhttp://www.businessdictionary.com/definition/survey.htmlhttp://www.businessdictionary.com/definition/technique.htmlhttp://en.wikipedia.org/wiki/Documenthttp://en.wikipedia.org/wiki/Historian


60/70

[MICRO FINANCE]

'able 1 # ,istribution of Indebted ural .ouseholds# A!en"$

wise

%redit A!en"$ Per"enta!e of ural .ouseholds

*o9ernment =1

%oo7erati9e So"ieties 21=

%ommer"ial ban6s and Bs 33 !r#n0 1??9?


63/70

[MICRO FINANCE]

Fi!ure 2 # Per"enta!e distribution of debt amon! indebted

ural &abor .ouseholds b$ sour"e of debt

The #nst#t!t#n' s!r,es ,!' +eet n'y 98 " the tt' ,re#t

reF!#re+ent " the r!r' '/!r h!seh's !r#n0 1???6@@@

th n'y ne $er,ent #n,rese ver the $rev#!s s!rvey #n

1??9?


64/70

[MICRO FINANCE]

D!r#n0 1???6@@@ s +!,h s 19 " the e/t &s r#se "r+

th#s s!r,e s 0#nst > #n 1??9?.>> n >.6; t 1;.1? n 5.9; res$e,t#ve'y

!r#n0 1???6@@@ s!rvey.

'able 3 #elati9e share of Borrowin! of %ulti9ator

.ouseholdsin 7er "ent

Sour"es of %redit 1;1 1;=1 1;1.9 8>.9 98.> [email protected] 9>.?Of which:

Mone$lenders 8?.;


65/70

[MICRO FINANCE]

'able 4#,istribution based on Asset si>e of ural

.ouseholds in 7er "ent

.ousehold Assets s

D000

Institutional

A!en"$

)on-

Institutional

A!en"$

All

&ess than 1@@-10


66/70

[MICRO FINANCE]

In th#s st!y +est tte+$t hs /een +e t #""erent#te

/et&een the ,'#ent ,hr,ter#st#,s " the t& +#,r"#nn,e

+e' $rev'ent #n the st!y re.

&e9el of litera"$

The he " the h!seh's #nterv#e&e &ere #''#terte th


67/70

[MICRO FINANCE]

A""ess to %redit

The $r $e$'es ,,ess t ,re#t +y /e s#0n#"#,nt'y

#+$rve thr!0h '' the ,hnne's " SHGBn '#n0e

$r0r++e% M:Is% 3$ert#ve Bns% Stte :#nn,#'

3r$rt#ns% RRB s n PA3S. S+e M:Is (#.e. Gr+een

Bn +e'=ABS% 7B:3s) hve /een #n0 very &e'' #n

se'e,te sttes th yn+#, +rets n yn+#, #n#v#!'s.

Beyn these !r#s#,t#ns% the#r !tre,h #s nne*#stent. Any

s#0n#"#,nt !$ s,'#n0 " +#,r"#nn,e t the '' In# 'eve' ''hve t e$en% there"re% n the 'r0e net&r " /ns% the

/nSHG '#n0e $r0r++e n the M:Is. In #t#n% the

$st ""#,e net&r #n the ,!ntry +y 's /e !se t e'#ver

/n#n0 serv#,es% es$e,#''y #n re+te r!r' res. The $st

""#,es +y /e "!rther en,!r0e t &r s /!s#ness

",#'#ttr n s /n#n0 ,rres$nent #n ,,rn,e thRBI 0!#e'#nes. The 7ABARD +y ,ns#er sett#n0 !$

3++#ttee% ,ns#st#n0 " vr#!s $r#vte n $!/'#, se,tr

/ns% the M#n#stry " R!r' Deve'$+ent% S+'' In!str#es

Deve'$+ent Or0n#st#n (SIDO) " M#n#stry " S+'' S,'e

In!str#es (SSI)% Rshtr#y Mh#' Ksh (RMK) " The

M#n#stry " W+en n 3h#' Deve'$+ent% De$rt+ent "

Psts% SIDBI% M:Is n the 7GOs #n the +#,r "#nn,e se,tr

t ev've n e""e,t#ve strte0y t #+$'e+ent the B!s#ness

:,#'#ttrs n 3rres$nents Me'. S!,h strte0y sh!'

's te #nt ,,!nt s$e,#' tr0et 0r!$s s!,h s the S3sSTs

n the +#nr#t#es thr!0h the#r res$e,t#ve 7t#n' :#nn,e

3r$rt#ns. The E'eventh P'n +y tr0et t e*ten +#,r

"#nn,e t t 'est >@ $er,ent " the BP= h!seh's.

67


68/70

[MICRO FINANCE]

%O)%&SIO)

The /s#, #e " +#,r "#nn,#n0 #s s#+$'e #" $r re

$rv#e ,,ess t "#nn,#' serv#,es% #n,'!#n0 ,re#t% they

+y very &e'' /e /'e t strt e*$n +#,r enter$r#se

tht '' ''& the+ t /re !t " $verty. In tt'#ty% #ts

",!s #s n er#,t#n " $verty "r+ 0rss 'eve'% &+en

!$'#"t+ent% ,ret#n0 s+'' n +e#!+ enter$r#ses n

there"re tes ,re " eve'$+ent " ny e,n+y "r+

th#n

3+$r#n0 t& +#,r"#nn,e +e's #n the reser,h rereve's tht the 'eve' " #ne/teness t +ney'eners #s

h#0her #n the ,se " ,'#ents " M:I +e'. S!,h ,ses

#''!strte the #""#,!'t#es M:I ,'#ents ",e &hen they hve

!n$r!,t#ve "#nn,#' reF!#re+ents r they re ,+$e''e

t ens!re $r+$t n re0!'r 'n re$y+ents thr!0h

"!rther /rrn0 "r+ even +ney 'eners. Th#s +es$verty &rse #n the shrt r!n% n +es #t hrer t es,$e

"r+ $vertyn #nee ,n /e s!r,e " $vertyn

#nee ,n /e s!r,e " $verty n #neF!'#ty tr$s

68


69/70

[MICRO FINANCE]

+F++)%+S

An#' K Khne'&'% M#,r"#nn,e Deve'$+ent

Strte0y "r In#% E,n+#, n

1. P'#t#,' Wee'y% Mr,h 91% 6@@;

6. 7,h#et Mr% B#n! Annth% In,'!s#ve :#nn,#'Syste+s S+e Des#0n Pr#n,#$'es n ,se st!y%

E,n+#, n P'#t#,' Wee'y% Mr,h 91% 6@@;

9. 4#r+ A!'% B!s#ness Bs#,s t the Bse " the

Pyr+#% Hrvr B!s#ness Rev#e&% J!ne% 6@@>


70/70

[MICRO FINANCE]

;. P#y!sh T#&r# n S M :h% HD:3% 3n,e$t $$er

M#,r"#nn,e Inst#t!t#ns #n In#

>. Br/r A'$h%D:ID% R!r' 7n :r+ E,n+yA,,ess :,trs% :e/r!ry% 6@@9

?. Shr# Y S P Thrt% Mn0#n0 D#re,tr% 7ABARD%

Innvt#n #n Pr!,t Des#0n% 3re#t De'#very n

Te,hn'0y t re,h s+'' "r+ers% 7ve+/er% 6@@5

[email protected]# Y S P Thrt% Mn0#n0 D#re,tr% 7ABARD%

M#,r"#nn,e #n In# Se,tr' Iss!es n 3h''en0es%

My% 6@@5

11.Dr. 3 Rn0rn% 3h#r+n% E,n+#, Av#sry

3!n,#' t the Pr#+e M#n#ster% M#,r"#nn,e n #ts

:!t!re D#re,t#ns% My% 6@@5

16.Re$rt% Stt!s " M#,r"#nn,e #n In# 6@@86@@;%

7ABARD

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