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Assignment On Micro Finance
Assignment On Micro Finance
Assignment On Micro Finance
4
Scope of the study
Research methodology 6
industry profile 7
CHAPTER V Conclusions
Summary of findings 37
Recommendation 38
Bibliography 39
Annexure 40-
INTRODUCTION
MICROFINANCE DEFINATION
"The poor stay poor, not because they are lazy but because they have no
access to capital."
MICROFINANCE
Traditionally banks and Lending Institutions do not lend money to low
income Individuals. The reasons being
• Collateral.
GOALS OF MICROFINANCE
• Combat Diseases
STATEMENT OF PROBLEM
Determining the attributes, which influence & drive low income group’s
loan preference towards a microfinance loan.
These attributes include interest rate, loan amount, and
microfinance loan lending process
OBJECTIVE OF THE STUDY
Geographical Constraint:-
This Study is only for microfinance in India.
Accuracy Constraint:-
As the data is collected is on secondary basis it have a higher possibility
of varying in accuracy.
RESEARCH METHODOLOGY
a) Primary Data.
b) Secondary Data.
SOURCES OF DATA:
The task of data collected after a research problem has been defined and
research design. While deciding about the method of data collection to be
used for the study, the researcher should keep in mind two types of data viz,
primary and secondary. The primary data are those which are collected
freshly and for the first time, and thus happen to be original in character.
The secondary data, on the other hand, are those, which have already, been
passed through the statistical process. The sources of data for this research
are both from primary and secondary.
Secondary Data
Secondary data include appropriate materials from magazines, internet, and
company brochure and by means of discussion with the guide, Annual
Report.
INDUSTRY PROFILE
During the 1970s and 1980s, the microenterprise movement led to the
emergence of nongovernmental organizations (NGOs) that provided small
loans for the poor. In the 1990s, a number of these institutions transformed
themselves into formal financial institutions in order to access and on-lend
client savings, thus enhancing their outreach. Specialized microfinance
institutions have proven that the poor are “bankable”. Today, formal
institutions are rapidly absorbing the lessons learned about how to do
small-transaction banking. Many of the newer players in microfinance, such
as commercial banks, have large existing branch networks, vast distribution
outlets like automatic teller machines, and the ability to make significant
investments in technology that could bring financial services closer to poor
clients. Increasingly, links among different types of service providers are
emerging to offer considerable scope for extending access.
MISSION STATEMENT
LOGO:-
HISTORY OF SKS MICROFINANCE PRIVATE LTD
SKS stands for Swayam Krishi Sangam, which in Hindi means “self-
cultivation society.” Dr. Vikram Akula, Founder and Chairperson, founded
SKS in 1997 and launched operations in 1998 in Andhra Pradesh, India
with the mission to eradicate poverty. In 1996-97, while still a PhD graduate
student, Akula raised $52,000 in seed funding from 357 family members
and friends to start SKS as a non-profit organization. In 2005, SKS
converted into a non-banking financial company (NBFC) which is regulated
by India’s central bank, the Reserve Bank of India (RBI).
The name of the Company was changed from ‘SKS Microfinance Private
Limited’ to ‘SKS Microfinance Limited’ pursuant to a resolution of our
shareholders passed at an EGM held on May 2, 2009 and fresh certificate of
incorporation bearing CIN number U65999AP2003PLC041732 was issued
on May 20, 2009. Subsequently, a fresh certificate of registration dated
June 3, 2009 was obtained from RBI for carrying on the business of non-
banking financial institution without accepting public deposits. The
Company is the largest MFI in India in terms of total value of loans
outstanding, number of borrowers and number of branches, according to
the October 2009 CRISIL report titled India Top 50 Microfinance
Institutions, or the CRISIL Report. The Company is engaged in providing
microfinance services to women in the lower income segment predominantly
located in rural areas in India. Sks microfinance company Converted into a
public limited company in May 2009 and launched an initial public offering
on July 28, 2010.
PROPRIETARY PRODUCTS
Product Features Benefits
Income Loans range from Rs. 4,000 Provides self-employed
Generation to Rs. 10,000 for the first women financial assistance
Loans (IGL) loan; subsequent loan to support their business
- Aarambh amounts determined by past enterprises, such as raising
credit history and increased livestock, running local retail
each in set increments up to shops called kirana stores,
a maximum of Rs. providing tailoring and other
26,000Term of the loan is 50 assorted trades and services
weeks with principal and
interest payments due on a
weekly basis
DISTRIBUTORS PRODUCTS
BOARD OF DIRECTORS
COMPANY PROFILE
PRODUCTS: - Loan
Pension services
Remittance services
6620
TOTAL PERSSONEL:-
MISSION STATEMENT
LOGO:-
HISTORY OF BANDHAN MICROFINANCE LTD
HISTORY OF BANDHAN FINANCIAL SERVICES PRIVATE LTD
Operational Methodology
Family of 5 members with monthly income less than Rs. 2,500 in rural
and Rs. 3,500 in urban
Those who do not own more than 50 decimal (1/2acre) of land or capital
of its equivalent value
BOARD OF DIRECTORS
CONCEPTUAL DESCRIPTION
Growth of microfinance
The growth of microfinance is visible in many aspects. There are more than
2000 NGOs involved in the NABARD SHG-Bank linkage program. Out of
these, approximately 800 NGOs are involved in some form of financial
intermediation. Further, there are 350 new generation co-operatives
providing thrift and credit services. According to our estimate, the present
total outstanding, including Sa-Dhan members and bank linkages is
approximately Rs.700 crores (Rs. 150 crores of Sa-Dhan members and
another Rs. 550 crores from the Banking system). The total client base is
estimated at 6-8 million as opposed to the Government of India (GOI)
intention to reach 25 million clients. The growth of community institutions
has taken place with the role to take social and financial intermediation. A
numbers of community banks have come into existence at village and block
levels call ' Federation of Self Help Groups'.
The inadequacies of the formal financial system to cater to the needs of the
poor and the realization of the fact that the key to success lies in the
evolution and participation of community based organizations at the
grassroots level led to the emergence of new generation of MFIs.
One kind of MFI is an NGO engaged in promoting Self Help Groups (SHGs)
and their federations at a cluster level and linking SHGs with Banks under
the Scheme. Examples are Myrada in Karnataka, which has promoted
Sanghmitra, a company of its village saving and credit sanghas, PRADAN
which has established a large number of SHGs and federated them under
Damodar in Bihar, Sakhi Samiti in Rajasthan.
Another kind is NGO-MFI directly lending to the poor borrowers, who are
either organized into SHGs or into Grameen Bank type of groups after
borrowing bulk funds from SIDBI, RMK and FWWB. Examples in this
category are Rashtriya Gramin Vikas Nidhi (RGVN) which runs credit and
savings programme in Assam and Orissa on the lines of Grameen Bank,
Bangladesh. Also we have SHARE in AP, ASA in Tamil Nadu under this
category.
THEORETICAL BACKGROND
ROLE OF MICROFINANCE
The micro credit of microfinance programme was first initiated in the year
1976 in Bangladesh with promise of providing credit to the poor
without collateral , alleviating poverty and unleashing human creativity
and endeavor of the poor people. Microfinance impact studies have
demonstrated that
Microfinance helps poor households meet basic needs and protects them
against risks.
The level of impact relates to the length of time clients have had access to
financial services.
ADVANTAGE OF MICROFINANCE
BENEFITS OF MICROFINANCE
As mentioned earlier, microfinance isn't about just giving out money to the
poor. On the contrary, these are small loans that are paid back with
interest. Of course, many people are skeptical when it comes to giving the
poor financial loans. However, they are surprised to learn that of the over
100 million microfinance loans that have been given out, 97% of them have
been repaid. That's why you can't consider microfinance a hand out, but
rather, it's a hand up.
Traditionally, the poor have been unable to receive loans. That's because
they don't have anything to offer as collateral. As a result, they get stuck in
a vicious cycle of poverty, living and working in poor, rural areas. Should
adversity strike, they simply don't have the means to combat it.
Microfinance allows the poor to get the loans they need to save, invest, and
create a sustainable lifestyle of financial independence and growth. These
loans are used productively by the poor to create their own businesses, grow
their assets, and get out of poverty once and for all.
3) It empowers women-
OBJECTIVE OF MICROFINANCE
Typically, the poor acquire financial services like loans through informal
relationships. These loans, however, come at a high cost per dollar loaned
and can be unreliable. Furthermore, banks have not traditionally viewed
poor people as viable clients and often will reject them due to unstable credit
or employment history and lack of collateral. MFIs dismiss such
requirements and provide small loans at high interest rates, thus providing
MFIs the funds they need to continue operation.
Empower Women
Community-Wide Benefits
In groups of five to ten, the women support each other emotionally and
financially by guaranteeing the repayment of each of their loans. With as
little as INR 4,000 (USD 85), a borrower can start a kirana store. With INR
10,000 (USD 212), a borrower can purchase a milking cow / buffalo, sewing
machine, or set up an embroidery unit. Many of the women become leaders
in their communities and undertake projects that benefit all the residents.
The repayment of loans plus interest generates funds that can be reinvested
as a second and third loan or used to start other women on their journey
toward sustainable prosperity. The entire community benefits from
improvement projects taken on by these newly confident and capable
leaders. Microfinance institutions broadly operate under a wide range of
legal structures. They could be registered as NGO, Trusts, Sec 25
Companies, Cooperative Societies, Cooperative Banks, Regional Rural
Banks, Local Area Banks, Public and Private Sector banks, Business
Correspondents and Non-Banking Finance Companies.