1.

Case: SHARE Microfin Limited: Indias Largest Microfinance Organization

Question (a)
The question intends to examine different strategies and principles adopted by Share
Microfinance Ltd. (SML) since its inception to grow its outreach and loan potential.
The answer discusses various strategies and principles adopted by Share Microfinance
Ltd. (SML) such as grameen methodology, awareness program among members,
responsibility of members for approving loans and disbursement, and ensuring
repayments, re-payment of loan in 50 weekly installments, Introduction of Computers
and MIS systems reduced the workloads and increased the operational efficiency,
decrease in operating costs with the scale of outreach etc.
However, some more elaboration would have been appropriate.
Question (b)
The question intends to discuss the challenges like regulatory or otherwise, countered by
SML during its growth plans and suggests solutions for these challenges.
The answer explained the major challenges faced by the SML on its growth are initial
problem of legal status as SHARE registered as a charitable society, raising funds,
securitization deal with the ICICI bank, other banks, in general, perceived this sector as
high risk due to its weak governance and inadequate delinquency control, unwilling to
frequently travel or travel long distances alone, uncomfortable in dealing with
male/delinquent clients due to the female management staffs etc. The answer suggested
the solutions to overcome the challenges such as staff training, internal controls and risk
managements, flexible timings to accommodate for house-keeping responsibilities, antiharassment, appropriate nature of work considering social norms, maternity leave, etc. for
female workers etc.
However, the answer should have explained the other challenges faced by Share Micro
fin Limited such as the need of high end monitoring on transactions, selection and
retaining of best employees in the systems, requirement of effective management
practice, tackling the increasing malpractices and fraudulent activities, maintaining strong
collection system on non-confrontation from money lenders and rich landlords: mindset
of the borrower from external dependence to self-reliance; weak governance etc.
With respect to the solutions to overcome the challenges, the answer should have
critically examined the issues such as creation of mutually aided cooperative societies,
concentration of cooperative villages for doing business, building strong relationship with
macro finances to back up on requirement of expansion plans, regular monitoring by the
team, branches to be audited also are changed within 1-3 years, developing the software
with more strong control features, periodical meeting with the clients on their
expectations, properly follow up with collection system to ensure continual payment,
legally updating the government requirements, implementing development strategies at
all levels, developing Research and Development on micro finances to make the system
effective and efficient.