DISSERTATION

ON
“GRAMEEN BANK IN INDIA: HOW HELPFUL IT
IS FOR POOR VEGETABLE VENDERS OF
PATELNAGAR, DEHRADUN”

SUBMITTED IN FULFILLMENT OF
MASTER OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF SUBMITTED BY

PROF. P. KUKRETI YAMIN
SR. FACULY (FINANCE0 MBA (P/T)
SGRR-ITS, D.DUN BATCH (2006-09)

SHRI GURU RAM RAI INSTITUTE OF TECHNOLOGY & SCIENCE

PATEL NAGAR, DEHRADUN- 248002AFFILIATED TO UTTARAKHAND
TECHNICAL UNIVERSITY PH. NO. (0135) 2721763, 2726435
 CERTIFICATE

This is to certify that the dissertation titled “GRAMEEN BANK IN INDIA:

HOW HELPFUL IT IS FOR POOR VEGETABLE VENDERS OF
PATELNAGAR DEHRADUN” has been prepared and submitted by Yamin
for the partial fulfillment of the requirement of master of business
administration (P/T) course approved by all India council of technical education
. Of HRD. Governmen of India new Delhi and affiliated to uttarakhand
technical university Dehradun under my supervision and guidance

Prof. P. Kukreti
Sr. Faculty (Finance)
S.G.R.R.-ITS, Dehradun

DECLARATION

2
 I here by declare that the work which is being presented as
dissertation report on “GRAMEEN BANK IN INDIA: HOW
HELPFOL IT IS FOR POOR VEGETABLE VENDERS OF
PATELNAGAR DEHRADUN” entitled to me have been prepared
and drafted by me on the basis of facts and the data collection in
survey under guidance of prof. P. Kukreti. The empirical finding in
the report is based on the data collected by me while preparing this
dissertation. I have not copied anything from any source or other
project submitted for the similar purpose.

Date: Yamin
MBA(P/T) VI th sem.
(Finance group)

ACKNOWLEDGEMENT

3
 I am very grateful to all faculty members for imbibing me the necessary
conceptual skills regarding the subject specially I am extremely grateful to Prof.
P. kukreti who provided most valuable suggestions and co-operation at every
step in completing this dissertation report. I would also like to convey my
regards to library staff of SGRRITS Patelnagar, for supporting me throughout
the endeavor. By providing all necessary books and data when ever I required.

Yamin
MBA(P/T) vi th sem.
(Finance group)

TABLE OF CONTENTS

4
CHAPTERS TO P I C PG. NO.

CHAPTER-1 INTRODUCTION……………………..01-40

CHAPTER-2 RESEARCH METHODOLOGY…….41-43

CHAPTER-3 A N ALY S I S & I N T E R P R E TAT I O N … 4 4 - 5 9

CHAPTER-4 FINDING………………………………..60-61

CHAPTER-5 CONCLUSION…………………………62-63

CHAPTER-6 SUGGESTIONS ……………………….64-65

CHAPTER-7 A B B R E VAT I O N S … … … … … … … … … 6 6

CHAPTER-8 REFERENCES…………………………67

ANNEXURE

5
 1.0 GRAMEEN BANK
1.1 History

The origin of Grameen Bank can be traced back to 1976

w h e n P r o f e s s o r M u h a m m a d Yu n u s , H e a d o f t h e R u r a l
E c o n o m i c s P r o gr a m a t t h e U n i v er s i t y of C h i t t a g o n g , l a u n c h e d
a n a c t i o n r e s e a r c h p r oj e c t t o e x a m i n e t h e p o s s i b i l i t y of
d e s i g n i n g a c r e d i t d e l i v er y s y s t e m t o p r o v i d e b a n k i n g s e r v i c e s
t a rg e t e d a t t h e r u r a l p o o r. T h e G r a m e e n B a n k Pr o j e c t ( G r a m e e n
m e a n s " r ur a l " or " v i l l a g e " i n B a n g l a l a n g u a g e ) c a m e i nt o
o p e r a t i o n w i t h t h e f o l l o w i n g o b j e c t i v e s : I n 1 9 7 6 , d ur i n g v i s i t s
t o t h e p o o r e s t h o u s e h o l d s i n t h e vi l l a g e of J o b r a n e a r
C h i t t a g o n g U n i v er s i t y, M u h a m m a d Yu n u s d i s c o v e r e d t h a t v er y
s m a l l l o a n s c o u l d m a k e a d i s p r o p or t i o n a t e d i ff e r e n c e t o a p o o r
p e r s o n . J o b r a w o m e n w h o m a d e b a m b o o f u r ni t u r e h a d t o t a k e
o u t u s u r i o u s l o a n s f or b u y i n g b a m b o o , t o p a y t h e i r p r of i t s t o
t h e m o n e y l e n d e r s . H i s f i r s t l o a n , c o n s i s t i n g of U S D 2 7 . 0 0 f r om
his own pocket, was made to 42 women in the village, who
m a d e a n e t pr o f i t of B D T 0 . 5 0 ( U S D 0 . 0 2 ) e a c h o n t h e l o a n .
T h u s , v a s t l y i m pr o v i n g B a n g l a d e s h ' s a b i l i t y t o e x p o r t a n d
i m p o r t a s i t d i d i n t h e p a s t , r e s u l t i n g i n a gr e a t e r f or m o f
globalization and economic status.

T h e c o n c e p t o f p r o vi d i n g c r e d i t t o t h e p o o r a s a t o o l o f
p o v e r t y r e d u c t i o n w a s n o t u n i q u e . D r. A k ht a r H am e e d K h a n ,
f o u n d e r o f P a k i s t a n A c a d e m y f or R u r a l D e v e l o p m e nt ( n o w
B a n g l a d e s h A c a d e m y f o r R u r a l D e v e l o p m e nt ) , i s c re d i t e d f o r
p i o n e e r i n g t h e i d e a . F r o m h i s e x p er i e n c e a t J o b r a , Yu n u s , a n
a d m i r e r of D r. H a m e e d , r e a l i z e d t h a t t h e c r e a t i o n of a n
institution was needed to lend to those who had nothing. While
traditional banks were not interested in making tiny loans at
reasonable interest rates to the poor due to high repayment
r i s k s , Yu n u s b e l i e v e d t h a t g i v e n t h e c h a n c e t h e p o o r w i l l r e p a y
t h e b o r r o w e d m o n e y a n d h e n c e m i c r o - cr e d i t c o u l d b e a v i a b l e
b u s i n e s s m o d e l . Yu n u s f i n a l l y s u c c e e d e d i n s e c u r i n g a l o a n
f r o m t h e g o v e r n m e n t J an a t a B a n k t o l e n d i t t o t h e p o o r i n
Jobra in December 1976. The institution continued to operate
by securing loans from other banks for its projects. By 1982,
t h e b a n k h a d 2 8 , 0 0 0 m e m b er s . O n 1 O ct o b e r 1 9 8 3 t h e p i l o t
p roj e c t b e g a n o p e r a t i o n s a s a f u l l - f l e d g e d b a nk a n d w a s
re n am e d t h e G r a m e e n B a n k ( Vi l l a g e B a n k ) t o m a k e l o a n s t o

6
p o o r B a n g l a d e s h i s . Yu n u s a n d h i s c o l l e a g u e s e n c o u n t e r e d
everything from violent radical leftists to the conservative
c l e rg y . Of J u l y 2 0 0 7 , Gr a m e e n B a n k h a s i s s u e d U S $ 6 . 3 8
b i l l i o n t o 7 . 4 m i l l i o n b o r r o w er s . To e n s u r e r e p a y m e n t , t h e b a n k
u s e s a s y s t e m of " s o l i d a r i t y gro u p s " . T h e s e s m a l l i nf o r m a l
g ro u p s a p p l y t o g e t h e r f o r l o an s a n d i t s m e m b e r s a ct a s c o -
g u a r a n t o r s o f re p a ym e n t a nd s u p p o r t o n e a n o t h e r ' s e f f o r t s
at economic self-advancement.

1.2 Diversification
T h e G r a m e e n B a n k s t a r t e d t o d i v er s i f y i n t h e l a t e 1 9 8 0 s
w h e n i t s t a r t e d a t t e n d i n g t o u n u t i l i z e d or u n d e r u t i l i z e d f i s h i n g
ponds, as well as irrigation pumps like deep tube-wells. In
1 9 8 9 , t h e s e d i v e r s i f i e d i n t er e s t s s t a r t e d gr o w i n g i n t o s e p a r a t e
o rg a n i z a t i o n s , a s t h e f i s h e r i e s p r o j e c t b e c a m e Gr a m e e n M o t s h o
(Grameen Fisheries Foundation) and the irrigation project
b e c a m e G r a m e e n K r i s h i ( Gr a m e e n A g r i c u l t u r e F o u n d a t i o n ) .
O v e r t i m e , t h e G r a m e e n i n i t i a t i v e h a s gr o w n i n t o a m u l t i -
f a c e t e d g r o u p o f pr o f i t a b l e a n d n o n - pr o f i t v e n t ur e s , i n c l u d i n g
m a j o r pr o j e c t s l i k e G r a m e e n Tr u s t a n d G r a m e e n Fu n d , w h i c h
r u n s e q u i t y p r o j e c t s l i k e Gr a m e e n S of t w a r e L i m i t e d , G r a m e e n
CyberNet Limited, and Grameen Knitwear Limited, as well as
G r a m e e n Te l e c o m , w h i c h h a s a s t a k e i n G r am e e n p h o n e ( G P ) ,
b i g g e s t p r i v a t e s e c t o r p h on e c om p a n y i n B a n g l a d e s h . T h e
Vi l l a g e P h o n e ( P o l l i P h o n e ) p r o j e c t of G P h a s br o u g h t c e l l -
p h o n e o w n e r s h i p t o 2 6 0 , 0 0 0 r u r a l p o or i n o v e r 5 0 , 0 0 0 v i l l a g e s
s i n c e t h e b e g i n n i n g o f t h e pr o j e c t i n M a r c h 1 9 9 7 .
T h e s u c c e s s o f t h e Gr a m e e n m o d e l of m i c r o- f i n a n c i n g h a s
i n s p i r e d s i m i l a r e ff o r t s i n a h u n d r e d c o u n t r i e s t h r o u g h o u t t h e
developing world and even in industrialized nations, including
t h e U n i t e d S t a t e s . M a n y, b ut n o t a l l , m i c r o - cr e d i t p r o j e c t s a l s o
r e t a i n i t s e m p h a s i s o n l e n d i n g s p e c i f i c a l l y t o w o m e n . M o re
t h a n 9 4 % of G r a m e e n l o a n s h a v e g o n e t o w om e n , w h o s u ff e r
d i s p r o p o r t i o n a t e l y f r o m p o v e r t y a n d w h o a r e m or e l i k e l y t h a n
m e n t o d e v o t e t h e i r e a r n i n g s t o t h e i r f a m i l i e s . F or h i s w o r k
with the Grameen Bank,.
The Grameen Bank extended collateral-free loans to
2 0 0 , 0 0 0 l a n d l e s s p e o p l e i n i t s f i r s t 1 0 y e a r s . M o s t of i t s
c u s t o m e r s h a d n e v e r d e a l t w i t h f or m a l l e n d i n g i n s t i t u t i o n s
before. The most remarkable accomplishment was the
p h e n o m e n a l r e c o v e r y r a t e ; a m i d t h e p r e v a i l i n g p a t t e r n of b a d
d e b t s t hr o u g h o u t t h e B a n g l a d e s h i b a n k i n g s y s t e m , o n l y 4

7
percent of Grameen Bank loans were overdue.The bank had
f r o m t h e o u t s e t a p p l i e d a s p e c i a l i z e d s y s t e m o f i n t e n s i v e cr e d i t
supervision that set it apart from others. Its success, though
still on a rather small scale, provided hope that it could
continue to grow and that it could be replicated or adapted to
o t h e r d e v e l o p m e n t - r el a t e d pr i o r i t i e s . T h e G r a m e e n B a n k w a s
e x p a n d i n g r a p i d l y, p l a n n i n g t o h a v e 5 0 0 b r a n c h e s t hr o u g h o u t
the country by the late 1980s.

B e g i n n i n g i n l a t e 1 9 8 5 , t h e g o v e r n m e n t p ur s u e d a t i g h t
m o n e t a r y p o l i c y a i m e d a t l i m i t i n g t h e gr o w t h o f d o m e s t i c
p r i v a t e c r e d i t a n d g o v e r n m e n t b or r o w i n g f r o m t h e b a n k i n g
s y s t e m . T h e p o l i c y w a s l a rg e l y s u c c e s s f u l i n r e d u c i n g t h e
g r o w t h of t h e m o n e y s u p p l y a n d t o t a l d o m e s t i c cr e d i t . N e t
credit to the government actually declined in FY 1986. The
p r o b l e m of c r e d i t r e c o v e r y r e m a i n e d a t hr e a t t o m o n e t ar y
s t a b i l i t y, r e s p o n s i b l e f or s e r i o u s r e s o u r c e m i s a l l o c a t i o n a n d
h a r s h i n e q u i t i e s . A l t h o u g h t h e g o v e r n m e n t h a d b e g u n e ff e c t i v e
measures to improve financial discipline, the draconian
c o n t r a c t i o n o f cr e d i t a v a i l a b i l i t y c o n t a i n e d t h e r i s k of
i n a d v e r t e n t l y d i s c o u r a g i n g n e w e c o n o m i c a c t i v i t y.
Foreign exchange reserves at the end of FY 1986 were US$476
m i l l i o n , e q u i v a l e n t t o s l i g h t l y m o r e t h a n 2 m o n t h s w o r t h of
i m p o r t s . T h i s r e p r e s e n t e d a 2 0 - p er c e n t i n c r e a s e o f r e s e r v e s
o v e r t h e p r e v i o u s y e a r, l a rg e l y t h e r e s u l t o f h i g h er r e m i t t a n c e s
b y B a n g l a d e s h i w or k e r s a b r o a d . T h e c o u n t r y a l s o r e d u c e d
imports by about 10 percent to US$2.4 billion. Because of
Bangladesh's status as a least developed country receiving
c o n c e s s i o n a l l o a n s , p r i v a t e c r e d i t or s a c c o u n t e d f o r o n l y a b o u t 6
p e r c e n t o f o u t s t a n d i n g p u b l i c d e b t . T h e e x t er n a l p u b l i c d e b t
was US$6.4 billion, and annual debt service payments were
U S $ 4 6 7 m i l l i o n a t t h e e n d o f FY 1 9 8 6 .
Grameen Bank has now become a national institution that
p r o v i d e s c r e d i t t o t h e r ur a l p o o r i n B a n g l a d e s h . I t i s t o d a y a l s o
o w n e d b y t h e p o o r, w h o s e p a i d u p s h a r e c a p i t a l a m o u n t t o Ta k a
2 0 0 m i l l i o n . C r e d i t pr o v i d e d b y Gr a m e e n i n 1 9 9 4 e x c e e d e d t h e
t o t a l a m o u n t o f a l l o t h er f i n a n c i a l i n s t i t u t i o n s a n d N G O s p u t
t o g e t h e r i n B a n g l a d e s h . G r a m e e n i s c o m m i t t e d t o t h e g o a l of
a l l e v i a t i o n o f p o v e r t y a n d e m p o w e r m e n t of t h e r u r a l p o o r. To
f u l f i l l i t s s t r a t e g i c o b j e c t i v e , G r a m e e n h a s gr o w n
i n s t i t u t i o n a l l y, i t s cr e d i t o p e r a t i o n s h a v e e x p a n d e d r a p i d l y a n d
i t s pr o g r a m s h a v e b e c o m e m o r e d i v er s i f i e d .

8
1.3 Objectives
 Extend banking facilities to poor men and women;
 E l i m i n a t e t h e e x p l o i t a t i o n of t h e p o o r b y m o n e y l e n d e r s ;
 C r e a t e o p p or t u n i t i e s f o r s e l f - e m p l o ym e n t f o r t h e v a s t
m u l t i t u d e o f u n e m p l o y e d p e o p l e i n r ur a l B a n g l a d e s h
 Bring the disadvantaged, mostly the women from the
p o o r e s t h o u s e h o l d s , w i t h i n t h e f o l d o f a n o rg a n i z a t i o n a l
f or m a t w h i c h t h e y c a n u n d e r s t a n d a n d m a n a g e b y
themselves; and
 R e v e r s e t h e a g e - o l d v i c i o u s c i r c l e of " l o w i n c o m e , l o w
saving & low investment", into virtuous circle of "low
income, injection of credit, investment, more income,
more savings, more investment, more income".

1.4 Features

 G r a m e e n B a n k a l l o w e d t o o p e r a t e b r a n c h e s i n ur b a n a r e a s .
E a r l i e r t h e y c o u l d o p e n b r a n c h e s o n l y i n t h e r ur a l a r e a s .
 G o v e r n m e n t s t a k e c u t d o w n f r o m 2 5 % t o 1 5% . N o t e t h a t
when the Bank started, Government had a stake of 60%.
 N u m b e r o f G o v er n m e n t n o m i n a t e d di r e c t o r s b r o u g h t d o w n
to 2 from 3.
 C h a i r m a n o f t h e b a n k w i l l b e a p p o i n t e d b y t h e b o ar d
i n s t e a d o f G o v er n m e n t n o m i n a t i o n w h i c h e x i s t e d u n t i l
n o w.
 To d a y g r a m e e n b a n k h a s m o r e t h a n 1 , 0 0 0 br a n c h e s i n a l l
over the world.
 The default rate is just 2%.
 I t pr o m o t e s c r e d i t a s a h u m a n r i g h t .
 I s m i s s i o n i s o h e l p t h e p o or f a m i l i e s t o h e l p t h e m s e l v e s
t o o v e r c o m e p o v e r t y. I t i s t a rg e t e d t o t h e p o o r,
p a r t i c u l a r l y p o or w o m e n .
 M o s t d i s t i n c t i v e f e a t u r e o f Gr a m e e n c r e d i t i s t h a t i t i s n o t
b a s e d o n a n y c o l l a t e r a l , o r l e g a l l y e n f or c e a b l e c o n t r a c t s .
It is based on trust, not on legal procedures and system.
 I t i s o ff e r e d f o r c r e a t i n g s e l f e m p l o y m e n t f or i n c o m e
g e n e r a t i n g a c t i v i t i e s a n d h o u s i n g f o r t h e p o o r, a s o p p o s e d

9
 to consumption.
 It was initiated as a challenge to the conventional banking
w h i c h r e j e c t e d t h e p o or b y c l a s s i f y i n g t h e m t o b e n o t
creditworthy as a result it rejected the basic methodology
of the conventional banking and created is own
m e t h o d o l o g y.
 I t pr o v i d e s s e r v i c e a t t h e d o or s t e p of t h e p o o r b a s e d o n
the principle that the people should no go to the bank,
bank should go to the people.
 I n or d e r t o o b t a i n l o a n s a b or r o w e r m u s t j o i n a g r o u p of
borrowers
 Loans can be received in a continuous sequence. New loan
b e c o m e s a v a i l a b l e o a b or r o w e r i f h e r p r e v i o u s l o a n i s
repaid
 A l l l o a n s a r e t o b e p a i d b a c k i n i n s t a l l m e n t ( w e e k l y, o r b i -
weekly)
 Simultaneously more than one loan can be received by a
b o r r o w e r.
 It comes with both obligatory and voluntary savings
p r o gr a m s f or t h e b o r r o w e r s
 G e n e r a l l y t h e s e l o a n s ar e gi v e n t hr o u g h n o n - pr o f i t
o rg a n i z a t i o n s o r t hr o u g h i n s t i t u t i o n s o w n e d p r i m a r i l y b y
t h e b o r r o w er s . I f i t i s d o n e t h r o u g h f or p r of i t i n s t i t u t i o n s
n o t o w n e d b y t h e b or r o w e r s . I f i t i s d o n e t hr o u g h f or
p r of i t i n s t i t u t i o n s n o t o w n e d b y t h e b o r r o w e r s . E ff or t s ar e
made to keep he interest rate at a level which is close to a
l e v e l c o m m e n s u r a t e w i t h s u s t a i n a b i l i t y of t h e p r o g r a m
r a t h e r t h a n br i n g i n g a t t r a c t i v e r e t ur n f o r t h e i n v e s t o r s
 G r a m e e n b a n k ’s t h u m b r u l e i s t o k e e p i n t e r e s t r a t e a s
c l o s e t o t h e m a r k e t r at e pr e v a i l i n g i n t h e c o m m e r c i a l
b a n k i n g s e c t o r, a s p o s s i b l e .
 G r a m e e n b a n k gi v e s h i g h p r i or i t y o n b u i l d i n g s o c i a l
c a p i t a l I i s pr o m o t e d t h r o u g h f o r m a t i o n of g r o u p s a n d
centers developing leadership quality through annual
e l e c t i o n of g r o u p a n d c e n t r e l e a d e r s .
 I t i s p e r h a p s t h e o n l y b a n k i n t h e w or l d t h a t e n c o u r a g e s
birth control , sanitation and a clean environment.
2.0 GRAMEEN BANK PROFILE

10
Ty p e B o d y: C o r p o r a t e ( B a n k O rd i n a n c e )

Founded: 1983

Headquarter : Dhaka, Bangladesh

A re a s e r v e d : Bangladesh

Key people : M u h a m m a d Yu n u s , f o u n d e r

Industry : Finance

P ro d u c t s : Financial Services

M i c ro f i n a n c e :

Revenue : 6 , 3 3 5 , 5 6 6 , 3 2 4 Ta k a ( 9 2 . 3 m i l l i o n U S D) ( 2 0 0 6)

Operating income: 5 , 9 5 9 , 6 7 5 , 0 1 3 Ta k a ( 8 6 . 9 m i l l i o n U S D )
( 2 0 0 6)

Net income: 1 , 3 9 8 , 1 5 5 , 0 3 0 Ta k a ( 2 0 . 3 m i l l i o n U S D )
( 2 0 0 6)

To t a l a s s e t : 5 9 , 3 8 3 , 6 2 1 , 7 2 8 Ta k a ( 2 0 0 6) [ 2 ]

Employees: 24,703 (Oct 2007)[3]

We b s i t e h t t p: / / w w w. g r a m e e n - i n f o . o rg /

2.1 GRAMEEN BANK OVERVIEW

11
1 . 0 C u m u l at i v e A m o u n t D i s b u r s e d S i n c e I n c e p t i o n 7 , 7 7 6 . 5 5

2 . 0 C u m u l at i v e A m o u n t R e p a i d S i n c e I n c e p t i o n 6 , 9 1 0 . 0 2

3 . 0 Am o u n t D i s b u r s e d t h i s M o n t h 9 5 . 4 2

4 . 0 Am o u n t R e p a i d t h i s M o n t h 7 5 . 2 7

5.0 Outstanding Loan

5.1Basic Loan 635.06
5 . 2 F l e x i b l e L o a n ( a) 2 5 . 6 3
5.3Housing Loan 3.44
5.4Education Loan 15.00
5.5Other Loans 3.22
5 . 6 To t a l ( b) : 6 8 2 . 3 5

6.0 Rate of Recovery (c) 97.93

7 . 0 To t a l O u t s t a n d i n g of B o r ro w e r s M i s s i n g 5 t o 9
Consecutive I n s t a l l m e n t s ( d)
7.1.Basic Loan 4.99
7.2.Flexible Loan 2.49
7 . 3 . To t a l : 7 . 4 8

8.0 Overdue Loan (e)

8.1.Basic Loan (f) 10.025
8.2Flexible Loan 8.030
8.3Housing Loan 0.396
8.4Other Loans 0.010
8 . 5 To t a l : 1 8 . 4 6 2

9 . 0 M i c ro - e n t e r p r i s e L o a n ( C u m u l a t i v e )
9 . 1 N o . o f M i c r o - e n t e r pr i s e L o a n s 1 , 7 3 3 , 1 6 6
9.2Amount Disbursed 632.84
9.3Amount Repaid 498.19

1 0 . 0 B a l a n c e of D e p o s i t s
10.1Members' Deposit 516.64
10.2Non-Members' Deposit 431.46
1 0 . 3 To t a l : 9 4 8 . 1 0

11 . 0 D e p o s i t s t o O u t s t a n d i n g
11 . 1 D e p o s i t s a s P er c e n t a g e o f O u t s t a n d i n g L o a n s 1 3 9
11 . 2 D e p o s i t s a n d O w n R e s o u r c e s a s P er c e n t a g e of

12
 O/S loans

12.0 Beggar Members

12.1No. of Beggar Members 92,137
12.2Amount Disbursed (Cumulative) 1.94
1 2 . 3 A m o u n t R e p a i d ( C u m u l a t i v e) 1 . 4 1
1 2 . 4 A m o u nt o f S a v i n g s ( B a l a n c e ) 0 .11

1 3 . 0 C u m u l at i v e N u m b er o f Vi l l a g e P h on e s 3 5 4 , 2 8 1
1 4 . 0 C u m u l a t i v e N u m b er o f H o u s e s B u i l t w i t h H o u s i n g
Loans 668,929

1 5 . 0 L i f e I n s u r a n c e F u n d ( C um u l a t i v e)
1 5 . 1 N o . o f D e a t h s A m o n g a l l B o r r o w er s 11 2 , 7 1 6
1 5 . 2 A m o u nt p a i d o ut f r o m L i f e I n s u r a n c e F u n d 4 . 2 0

16.0 Loan Insurance

16.1 Balance in Loan Insurance Savings 63.94
16.2 No. of Deaths Among Insured Borrowers
(Cumulative) 120,893
1 6 . 3 A m o u nt o f O u t s t a n d i n g Pr i n c i p a l a n d I n t er e s t o f t h e
Deceased Borrowers paid out from Insurance Fund
(Cumulative) 13.45

17.0 Higher Education Loan (Cumulative)

17.1 No. of Female Students 6,875
17.2 No. of Male Students 25,327
1 7 . 3 Tot a l : 3 2 , 2 0 2
1 7 . 4 A m o u nt D i s b u r s e d ( F e m a l e ) 3 . 2 5
1 7 . 5 A m o u nt D i s b u r s e d ( M a l e ) 1 2 . 6 8
1 7 . 6 Tot a l : 1 5 . 9 3

1 8 . 0 S c h o l a r s h i p ( C u m u l a t i v e)
1 8 . 1 S c h o l a r s h i p R e c i p i e n t ( F e m a l e) 4 0 , 8 3 9
18.2 Scholarship Recipient (Male) 29,237
1 8 . 3 Tot a l : 7 0 , 0 7 6
18.4 Scholarship Amount (Female) 0.80
1 8 . 5 S c h o l a r s h i p A m o u n t ( M a l e) 0 . 5 9
1 8 . 6 Tot a l : 1 . 3 9

1 9 . 0 N u m b er o f M e m b e r s
19.1 Female 7,512,682
19.2 Male 238,437

13
 1 9 . 3 Tot a l : 7 , 7 5 1 , 11 9

2 0 . 0 N u m b er o f G ro u p s 1 , 2 1 9 , 3 3 4

2 1 . 0 N u m b er o f C e n t e r s 1 4 1 , 7 7 3

2 2 . 0 N u m b er o f Vi l l a g e s 8 3 , 9 6 7

2 3 . 0 N u m b er o f B r a n c h e s 2 , 5 4 5

2 4 . 0 N u m b er o f B r a n c h e s w i t h C o m p ut e r i z e d A c c o u n t i n g
and MIS 2,530

(a) On the last day of each month, 50 per cent provision is

made against the outstanding amounts of flexible loans with
a g e of l e s s t h a n t w o y e a r s , a n d 1 0 0 p e r c e n t p r o vi s i o n i s m a d e
against the outstanding amounts of flexible loans with age of
t w o y e a r s a n d m or e . T h e a m o u n t of a f l e x i b l e l o a n w h i c h
c o m p l e t e s t h e t h i r d y e ar i s w r i t t e n o ff e x a c t l y o n t h e d a t e
following its completion.
( b) T h i s f i g u r e i s n ot e x a c t l y e q u a l t o t h e d i ff er e n c e b e t w e e n
i t e m s 1 a n d 2 b e c a u s e o f d i ff e r e n c e i n c o n v e r s i o n r a t e s .
( c ) A m o u n t r e p a i d a s a p e r c e n t a g e of a m o u n t d u e .
( d) I f a b or r o w e r m i s s e s t e n c o n s e c u t i v e i n s t a l l m e n t s , t h e
e n t i r e o u t s t a n d i n g l o a n i s t r e a t e d a s a n o v er d u e l o a n .
(e) On the last day of each month, 100 per cent provision is
made against all overdue loans. Entire outstanding amount of
o v e r d u e l o a n s a r e wr i t t e n o ff o n e y e a r a f t er t h e y b e c o m e
overdue.
( f ) I n c a s e of o n e - y e a r l o a n , i f t h e b or r o w e r f a i l s t o r e p a y h a l f
the loan amount, with interest, within 26 weeks, entire un-
r e p a i d a m o u n t b e c o m e s o v e r d u e . I n c a s e of l o a n s w i t h l o n g er
d u r a t i o n , i f t h e b o r r o w er f a i l s t o r e p a y t h e t o t a l p r i n c i p a l
amount and interest scheduled to be repaid within each segment
o f 2 6 w e e k s , e n t i r e u n- r e p a i d a m o u n t f a l l s o v e r d u e .

N o t e : C u r r e n t E x c h a n g e R a t e : 1 U S $ = Ta k a 6 8 . 9 4 .

3.0 SELF-HELP GROUP

14
 The self help group is a registered or unregistered group
o f m i cr o e n t r e p r e n e u r s h a v i n g a h om o g e n o u s s o c i a l a n d
e c o n o m i c b a c k g r o u n d . Vo l u n t a r i l y c o m i n g t o g e t h e r t o s a v e
small amount regularly to mutually contribute to a common
f u n d a n d t o m e e t t h e i r e m e rg e n c y n e e d s o n m u t u a l h e l p b a s i s .
T h e g r o u p m e m b er s u s e t h e c o l l e c t i v e w i s d o m a n d p e e r
p r e s s u r e t o g e t t h i n g s d o n e p r o p e r l y. T h e S H G p l a t f o r m i s b u i l t
u p o n t h e p r e m i s e t h a t t h e p o or h a s t h e c a p a c i t y t o s a v e . T h e
p o o r n e e d c r e d i t a n d n o t c h a r i t y. T hr i f t c o m e s f i r s t a n d c r e d i t
c o m e s l a t e r. A l l f or e a c h a n d e a c h f o r a l l w o u l d e n h a n c e t h e
t e a m s p i r i t . T h e I n d i a n m i c r o- f i n a n c e s e c t o r pr e s e n t l y c o n s i s t s
o f v a r i e t y of m i c r of i n a n c e s e r v i c e p r o v i d e r s c o m p r i s i n g a p e x
financial institution like NABARD and SIDBI. Government
owned societies like Rashtriya Mahila Kosh formal ones like
commercial banks. Regional rural banks mutually aided co-
operative societies, SHG federations, private sectors like
N B F C s m o n e y l e n d er s e t c . A t p r e s e n t , T h e r e i s n o o n e
a p p r o p r i a t e f o r m of l e g i s l a t i o n f o r i n s t i t u t i o n s u n d er t a k i n g
m i c r o- f i n a n c e a c t i v i t y.
A s d e m a n d f or m i c r o f i n a n c e h a s b e e n i n c r e a s i n g , i n 1 9 9 2
N AVA R D t o o k p r o a c t i v e s t e p s a n d l a u n c h e d a p i l o t pr o j e c t o f
s e l f h e l p gr o u p b a n k l i n k a g e p r o g r a m i n t hi s r e g ar d R B I o n i t s
p a r t p r o vi d e d a s u p p o r t i v e p o l i c y f r a m e w o r k s o a s t o c r e a t e a n
a t m o s p h e r e f o r e n a b l i n g t h e g r o w t h of m i c r o f i n a n c e s e c t o r.
I t h a s r e a l l y g a i n e d m o m e n t u m a s e v i d e n c e d i n t h e q u a n t u m of
b a n k l o a n a n d h e n u m b e r of S H G s f i n a n c e d b y c o m m er c i a l
banks. By 31st March 2005 the banks in India had financed
m e a r l y 1 6 l a k h S H G s i n v ol v i n g a b a n k l o a n of n e a r l y R s 6 9 0 0
crore benefiting innumerable poor families. NABARD has
m a n a g e d a M i c r o - f i n a n c e D e v e l o p m e n f u n d of R s . 1 0 0 c r or e
and it is disbursed for capacity building in he Micro-finance
Institutions . In the budget of feb. 2005 it was increased to
Rs.200crore and it was redesigned as Micro finance
Development and Equity Fund so as to infuse capital fund o
s o m e of t h e M F I .
A s f ar a s t h e b a n k s ar e c o n c e r n e d , S H G i s v e r y c o s t -
e ff e c t i v e b e c a u s e t h e y d o n ’t h a v e o d e a l w i t h v a r i o u s c u s t o m e r s
a n d s e r v e s a s a n e ff i c i e n t r e c o v e r y m e d i u m a s c o u l d b e m a d e
o u t f r o m t h e f a c t t h a t t h e p e r c e n t a g e of r e c o v e r y i s 9 5 p e r c e n t
and above.

3.1 Basic training programs

15
T h e G r a m e e n B a n k o rg a n i z e s b a s i c t r a i n i n g pr o g r a m s f r o m f o r
r e p l i c a t o r s o f t h e G r a m e e n m o d e l i n d i ff e r e n t c o u n t r i e s t o
i m p a r t t r a i n i n g o n t h e c r e d i t d e l i v e r y- r e c o v e r y m e c h a n i s m of
G r a m e e n . T h e b a s i c t r a i n i n g pr o g r a m i n c l u d e s r u l e s ,
a c c o u n t i n g , a n d m o n i t or i n g s y s t e m s of G r a m e e n B a n k . F or
s e n i o r e x e c u t i v e s a n d f i e l d w o r k e r s d i ff er e n t c o ur s e s a r e
o ff e r e d . D u r a t i o n of t h e s e c o u r s e s i s t h r e e t o f o ur w e e k s . T h e
l e n g t h o f t r a i n i n g v i s i t s v a r y ; Tr a i ni n g c o u r s e s m a y b e
o rg a n i z e d a n y t i m e a s p er r e q u i r e m e n t of p e r s o n s / i n s t i t u t i o n s
f or a n y l e n g t h of d u r a t i o n . I n s t i t u t i o n s / p e r s o n s ar e r e q u e s t e d t o
contact with General Manager mentioning their objectives for
training.

3.1.1 Journalism

T h i s p r o gr a m i s s p e c i f i c a l l y d e s i g n e d f or m e m b e r s o f t h e p r e s s
a n d m e d i a i nt e r e s t e d i n f i l m i n g d o c u m e n t a r i e s a b o u t Gr a m e e n
B a n k , i t s o p e r a t i o n s , a n d i t s b o r r o w e r s . P r i or t o m a k i n g a n y
t r a v e l a r r a n g e m e n t s f or t h i s p ur p o s e , p a r t i c i p a n t s m u s t c o n t a c t
their respective embassies to obtain approval and clearance
f r o m t h e B a n g l a d e s h M i n i s t r y o f F or e i g n A ff a i r s – P r i n t &
Publications Department.

3.1.2 Research

R e s e a r c h e r s ar e a l s o w e l c o m e t o p er f or m t h e i r r e s e a r c h
a c c o r d i n g t o t h e i r o w n o b j e c t i v e s f o r a n y l e n g t h o f d ur a t i o n .
R e s e a r c h e r s ar e r e q u i r e d t o s e n d a R e s u m e / C V a l o n g w i t h a n
i n t r o d u c t or y l e t t e r f r o m t h e i r r e s p e c t i v e i n s t i t u t i o n s , a s w e l l a s
t h e p u r p o s e of t h e i r r e s e a r c h , d e t a i l s of t h e i r r e s e a r c h
m e t h o d o l o g y, e x p e c t e d t i m e f r a m e , a n d w h e t h e r o r n o t t h e y w i l l
be using a survey questionnaire.

3.1.3 Internship

S t u d e n t s f r o m v ar i o u s e d u c a t i o n a l i n s t i t u t i o n s f r o m a l l o v e r t h e
w o r l d c a n j o i n a s u n p a i d i n t er n a t G r a m e e n B a n k . I n t er n s c a n
learn in depth, through field visits, about the philosophy and
operational procedures of Grameen Bank, as well as the impact
o f G r a m e e n o n t h e e c o n o m i c a n d c u l t ur a l l i f e of G r a m e e n B a n k
m e m b e r s a n d t h e c o m m u n i t y. I n t e r n s h i p w i t h G r a m e e n B a n k i s
o p e n a n d f l e x i b l e a n d t h e r e i s n o f i x e d s c h e d u l e f or i n t e r n s h i p .

16
T h e f l e x i b i l i t y o f t h e i n t er n s h i p a l l o w s i n t e r n s t o s u p p l e m e n t
their already established academic objectives. Interns are
r e q u i r e d t o s e n d a R e s u m e / C V a l o n g w i t h a n i n t r o d u c t o r y l e t t er
f r o m t h e i r r e s p e c t i v e i n s t i t u t i o n s . I n t er n s h i p Pr o g r a m
Schedule/Itinerary

* T h i s s c h e d u l e i s p ur e l y a n o u t l i n e a n d s h o u l d n o t n e c e s s a r i l y
d i c t a t e t h e i nt e r n ’s s c h e d u l e . I t i s m e r e l y a n a i d e t o h e l p g u i d e
t h e i n t e r n i n o b t a i n i n g a w e l l - r o u n d e d e x p e r i e n c e a t Gr a m e e n
Bank.

(i)Week 1:

• M e e t w i t h i n t e r n s h i p c o o r d i n a t or a n d f i l l o u t pr o c e s s i n g
paperwork
• Vi s i t A u d i o a n d Vi s u a l D e p a r t m e n t f o r p o w e r p o i n t
p r e s e n t a t i o n o u t l i n i n g G r a m e e n B a n k a n d v a r i o u s a s p e c t s of t h e
Grameen family
• D i s c u s s w i t h c o o r d i n a t or p e r s o n a l i n t e r e s t s f or t h e i n t e r n s h i p
• C o n s u l t w i t h c o o r d i n a t or f or m o r e d e t a i l e d i n f or m a t i o n a b o u t
t h e G r a m e e n b a n k i n g pr o c e s s a n d o rg a n i z a t i o n
• Discuss and plan village center day trip for first-hand
e x p o s u r e t o Gr a m e e n

(ii)Week 2 :

• Go on village visit
o Vi s i t s g e n e r a l l y c o n s i s t o f :
M e e t i n g w i t h br a n c h m a n a g e r a t br a n c h o ff i c e
Meeting center manager at village center accompanied by
branch manager
A t t e n d c e n t e r m e e t i n g t o v i e w l o a n r e p a y m e n t pr o c e s s
and other center meeting activities
Q&A session with center borrowers and managers about
t h e v a r i o u s a s p e c t s o f l o a n s , b u s i n e s s e s , t h e G r a m e e n pr o c e s s
a n d a n y o t h er r e l a t e d i s s u e s
I f o ff e r e d , t o u r t h e v i l l a g e a n d v i e w b o r r o w e r e n t e r pr i s e s
• R e t u r n f r om v i s i t a n d d i s c u s s a n y o u t s t a n d i n g q u e s t i o n s o r
i s s u e s w i t h c o o r di n a t o r
• P l a n f or o v e r n i g h t v i s i t t o b r a n c h o ff i c e a n d c e n t e r

(iii)Week 3:

17
• Go on overnight village visit with coordinator (depending on
c o o r d i n a t o r a v a i l a b i l i t y) o r i n t er p r e t e r
o This visit consists of the same general schedule as the day
visit
• R e t u r n f r om v i s i t a n d d i s c u s s a n y o u t s t a n d i n g q u e s t i o n s o r
i s s u e s w i t h c o o r di n a t o r
• P l a n f or f i v e d a y o v e r n i g h t v i s i t t o b r a n c h o ff i c e .

(iv)Week 4:

• G o o n f i v e d a y o v e r n i g h t br a n c h v i s i t w i t h c o o r d i n a t or
( d e p e n d i n g o n c o o r d i n a t or a v a i l a b i l i t y ) o r i nt e r p r e t e r
o A c t i v i t i e s w i l l b e t h e s a m e a s t h e pr e v i o u s v i s i t s b ut y o u
will be attending more than one center meeting per day and at
various locations.

(v)Week 5:

• D i s c u s s a n y o u t s t a n d i n g q u e s t i o n s or i s s u e s w i t h c o or d i n a t o r
• P l a n f or t r i p t o Gr a m e e n s i s t e r c o m p a n i e s t o v i e w a c t i v e
social businesses.

(vi)Week 6:

• Vi s i t v ar i o u s G r a m e e n s i s t e r c o m p a n i e s t o v i e w a c t i v e s o c i a l
businesses
o Depending on how many businesses wish to be seen these
v i s i t s c a n b e l i m i t e d t o d a y o r o v e r n i g h t v e n t ur e s
• R e t u r n a n d di s c u s s a n y o u t s t a n d i n g q u e s t i o n s or i s s u e s w i t h
coordinator
* F r o m t hi s p o i n t o n , d e p e n d i n g o n t h e l e n g t h o f t h e i n t er n ’s
stay in Bangladesh, the intern may pick and choose what they
w o u l d l i k e t o f ur t h e r i n v e s t i g a t e s u c h a s m o r e br a n c h v i s i t s o f
v a r y i n g l e n g t h . F ur t h e r e x p l o r a t i o n c a n b e d e p e n d e n t o n t h e
r e g i o n o f t h e c o u n t r y, a g e a n d a ff l u e n c e o f t h e br a n c h , e t c .
T h e s e v i s i t s c a n a l s o b e c a t e r e d t o d a y, o v er n i g h t , o r f i v e - d a y
excursions. These choices are extremely flexible and are
e n t i r e l y u p t o t h e c h o i c e o f t h e i n t e r n . H o w e v e r, c o o r d i n a t or s
m u s t v er i f y a n d c o n s t r u c t e a c h of t h e s e t r i p s d u e t o l o c a l
circumstances.
*Coordinators are flexible in attempting to accommodate all
i n t e r n s ’ i nt e r e s t s a n d w e w o u l d r e q u e s t t h a t y o u d o t h e s a m e

18
w h e n r e q u e s t i n g y o ur p r o p o s e d s c h e d u l e . A l s o , a g a i n d e p e n d i n g
o n t h e i n t e r n ’s l e n g t h o f s t a y, t h e s c h e d u l e d e t a i l e d a b o v e c a n
b e p o s s i b l y c o m p r e s s e d a n d a l t e r e d . P l e a s e c o n s u l t w i t h y o ur
c o o r d i n a t o r t o pl a n o u t t h e b e s t s c h e d u l e g i v e n y o u r p e r s o n a l
constraints.
* A s s t a t e d i n t h e i n t e r n s h i p FA Q , t h e i n t e r n s h i p i s a l e a r n i n g
f o c u s e d e x p e r i e n c e . I n t er n s a r e e x p e c t e d t o t a k e p e r s o n a l
initiative to facilitate this. Coordinators are available to assist
i n m a k i n g t h i s p o s s i b l e ; t h e r e f or e i t i s n e c e s s a r y f or i n t e r n s t o
express their particular interests to their coordinators so that
t h e y m a y h e l p g ui d e t h e m . H o w e v e r, i n t e r n s m u s t b e m i n df u l
t h a t t h e r e a r e c e r t a i n c o n s t r a i n t s b y w h i c h t h e c o o r d i n a t or s
m u s t m a k e t h e i r d e c i s i o n s o n a n d w e a s k t h e i n t er n s t o b e
flexible to any constraints that may arise.

19
 4.0 MICROFINANCE

M i c r o f i n a n c e m a y b e d ef i n e d b y t h e a s “ p r o v i s i o n o f
t h r i f t , c r e d i t a n d o t h e r f i n a n c i a l s e r v i c e s a n d pr o d u c t s o f v er y
s m a l l a m o u n t s t o t h e p o o r i n r u r a l , s e m i - u r b a n or u r b a n a r e a s
f or e n a b l i n g t h e m t o r a i s e t h e i r i n c o m e l e v e l s a n d i m p r o v e
living standards ”

--NABARD—

A g o o d d ef i n i t i o n o f m i cr o f i n a n c e a s p r o vi d e d b y
Robinson is “Micro credit refers to small-scale financial
s e r v i c e s f or b o t h c r e d i t s a n d d e p o s i t s t h a t a r e pr o v i d e d o
p e o p l e w h o f a r m or f i s h o r h e r d ; o p er a t e s m a l l o f m i cr o
e n t e r p r i s e s w h e r e g o d s a r e p r o d u c e d , r e c y c l e d , r e p a i r e d , or
t r a d e d ; p r o v i d e s e r v i c e s ; w or k f or w a g e s o r c o m m i s s i o n s ; g a i n
income from renting out small amounts of land, vehicles, draft
a n i m a l s , or m a c h i n e r y a n d t o o l s ; a n d t o o t h e r i n d i v i d u a l s a n d
local groups in developing countries, in both rural and urban
areas”.

- - R o b i n s o n ( 2 0 0 1)

“ M i c r o cr e d i t i s m u c h m or e t h e n s i m p l y a n i n c o m e g e n e r a t i o n
t o o l . B y di r e c t l y e m p o w e r i n g p o o r p e o p l e , p a r t i c u l a r l y w o m e n ,
it has become one of the key driving mechanisms onwards
meeting the miollennium development goals specifically the
o v e r r e a c h i n g t a rg e t o f h a l v i n g e x t r e m e p o v e r t y a n d h u n g er b y
2015”

20
 - - M a r k M a l l o c h B ro w n

4.1 Requirements of clients

M i c r o f i n a n c e i s a b o t t o m t o t o p a p pr o a c h t o s p r e a d c r e d i t
a m o n g t h e p o o r e s t s e c t i o n o f p o p u l a c e f or t h e i r u p l i f t . T h e
d e m a n d f o r m i cr o f i n a n c e s u p p o r t o r i g i n a t e s b o t h f r om t h e
h o u s e h o l d f o r c o n s u m p t i o n n e e d s a n d m i c r o e n t e r pr i s e s f o r
s m a l l b u s i n e s s a c t i v i t i e s t h e y n e e d q u i c k a n d pr o m p t f i n a n c i a l
s u p p o r t a s t h e i n c o m e s t r e a m i s n or m a l l y s m a l l a n d e r r a t i c
micro finance clients need very flexible repayment schedule
t h a t m a y n o t b e c o m p a r a b l e t o t h e n or m a l c o m m e r c i a l a s p e c t s i t
i s a l l a b o u t m a k i n g a v a i l a b l e b r o a d r a n g e of f i n a n c i a l s e r v i c e s
such as Deposits loans payment services money transfer
I n s u r a n c e e t c . t o t h e p o or a n d t h e i r b u s i n e s s a c t i v i t i e s . I n
a d d i t i o n o t h e n o r m a l f i n a n c i a l s u p p o r t i n t h e f o r m of e a s y
saving and borrowing arrangements they need insurance cover
t o p r o t e c t t h e m s e l v e s a n t t h e i r b e l o n g i n g s h o u s e s cr o p s e t c .
from the vagaries of life .

D e s p i t e l a rg e b a n k br a n c h n e t w o r k s , t h e f i n a n c e f a c i l i t i e s
are not easily accessible to the rural folk mainly because of the
a l i e n c u l t u r e . A s t h e m a j o r i t y of m i c r o f i n a n c e c l i e n t s a r e
r a t h e r i l l i t e r a t e o f b a r e l y l i t e r a t e t h e y w o u l d pr e f e r s i m p l e
procedures coupled with minimum paper work.

Wi t h s i g n i f i c a n t gr o w t h i n m i c r o f i n a n c e a c t i v i t i e s t h e
e ff e c t i v e b e n e f i t w o u l d s p r e a d o v ar i o u s a s p e c t s s u c h a s
l i t e r a c y e m p o w e r m e n t e n t r e pr e n e u r s h i p e m p l o y m e n t
i m p r o v e m e n t i n l i v i n g s t a n d a r d s d e v e l o p m e n t of r ur a l e c o n o m y
a n d f i n a l l y p o v e r t y e l i m i n a t i o n a n d w o u l d h e l p br i n g d o w n t h e
n u m b e r s b e l o w p o v er t y l i n e .

4.2 Recognition for micro finance

21
T h e r e i s a n e e d t o m a k e m i cr o f i n a n c e l e n d i n g t o M F I s a n
a t t r a c t i v e b u s i n e s s pr o p o s i t i o n f o r p o t e n t i a l l e n d e r s a s t h e h u g e
d e m a n d f o r f i n a n c i a l s e r v i c e s b y h e p o or c a n l a rg e l y b e
s a t i s f i e d t hr o u g h m o b i l i z i n g c a p i t a l f r o m t h e f o r m a l s e c t o r I n
a d d i t i o n t o c r e d i t / f i n a n c i a l i n p ut s i n j e c t i n g m a n a g e r i a l i n p u t s
i n t o t h e a c t i v i t i e s of t h e t a rg e t gr o u p s w o u l d b e r e q u i r e d a s
c r e d i t a l o n e m a y n o t y i e l d t h e e x p e c t e d r e s u l t s . T hi s i s p o s s i b l e
o n l y t h r o u g h c l o s e i n t e r a c t i o n w i t h t h e t a rg e t g r o u p s .
E x p a n s i o n o f m i c r o cr e d i t p r o gr a m b y r e t a i n i n g a l l t h e
distinctive managerial aspects is also a challenge to be
squarely met . when the borrower changes from passive
recipient to active owners then the development initiatives
y i e l d r e s u l t . E n t r y o f p u b l i c s e c t o r b a n k s i n m i cr o f i n a n c e m a y
t o a l a rg e e x t e n t br i n g f o r t h c h a n g e s i n t h e l i f e o f h e p o or
given the kind of branch network and reach they have resulting
i n d i s t r i b u t i o n of d e f a u l t r i s k

4.3 Risk management in micro finance

As in any commercial activity risk is infer in micro
f i n a n c e p a r t i c u l a r l y w h e n t h e r e ar e n o c o l l a t er a l s t o f a l l b a c k
o n . To d a y t h e r i s k m a n a g e m e n t i n m i c r o f i n a n c e h a s a s s u m e d
g r e a t e r s i g n i f i c a n c e a s b a n k s ar e pr e p a r i n g t o c o m p l y w i t h t h e
r e l a t e d b a s e l i i n or m s

T h e p o r t f o l i o of m i c r o f i n a n c e i s p r i m a r i l y e x p o s e d t o
c r e d i t r i s k w h i c h i s n o t hi n g b u t d e f a u l t i n t h e c r e d i t a m o u n t
r e l e a s e d a n d o p e r a t i o n a l r i s k w h i c h i s h e r i s k of r e s u l t i n g f r o m
i n a d e q u a t e of f a i l e d i n t e r n a l pr o c e s s p e o p l e a n d s y s t e m o r f r o m
external events an element of market risk, which is prevalent in
normal commercial activity is significantly absent, perhaps
o w i n g t o l o w e r v a l u e o f h e p r o d u c t o u t p ut , w h i c h i s m a r k e t e d
t h r o u g h r et a i l a r r a n g e m e n t . T h e p r i m ar y r i s k t y p e i n m i c r o
finance activities is the Operational Risk

A s l e n d i n g t hr o u g h S H G b y c o m m e r c i a l b a n k s i s o n t h e
c o m m e r c i a l b a n k s t hr o u g h S H G b y c o m m e r c i a l b a n k s i s o n h e
increasing trend there is a need to adopt a robust portfolio
approach in this regard since the SHG lending is outside he
p u r v i e w o f i n di v i d u a l c r e d i t r i s k r a t i n g f r a m e w o r k t h a t a r e
p r e v a l e n t i n b a n k s . T h i s w i l l h e l p i n m o n i t or i n g t h e o u t s t a n d i n g
SHG portfolio. Here can be no double that lenders may spread
t h e i r r i s k w h e n t h e y l e n d o t h i s p ar t i c u l a r

22
Some of the risk mitigating measures in the micro finance
through SHG are as follows:

Encourage short term loans to build credit track record

h i s t o r y. B e t t e r t o m a i n t a i n p e e r p r e s s u r e b y m a k i n g t h e l o a n
a v a i l a b l e o n l y f o r p a r t o f h e S H G g r o u p s o t h a t i t i s n ot s h a r e d
by all in the group.

SHG to take up restructuring exercise

Migration from group to individual loan after imparting certain

amount of training.

A c t i v e S H G l e a d e r s a r e o b e i d e n t i f i e d a s F i e l d O ff i c i a l o
p r e v e n t t h e s t a ff t u r n o v e r, b u t r o t a t i o n of l e a d e r s s h o u l d b e
ensured.

Tr a n s p a r e n c y a n d g o o d G o v e r n m e n t a r e p u t i n p l a c e f o r
ensuring end use of funds.

P r o p er M I S i s t o b e e n s u r e d f or r e g u l a r f l o w o f i n f or m a t i o n o n
t h e f u n c t i o n i n g of t h e u ni t f i n a n c e d t h r o u g h m i cr o f i n a n c e s o
as to have close supervision monitoring

A s t r u c t ur e d r i s k a s s e s s m e n t m o d e l m a y b e e v o l v e d t o c a p t u r e
the risk at leas on a half yearly basis

In a tie up with a national insurance company micro insurance

p r o d u c t m a y b e o ff e r e d t o t h e S H G s a s a c o v e r t o p r ot e c t t h e
life non life risks

Q u a l i t y i n t e r n a l s y s t e m s h o u l d b e p ut i n p l a c e a n d t h e
important needs to be explained to the SHG members.
Identify the auditable and non auditable risks faced by MFIs
and try to minimize the non auditable

C r e a t e i n d u s t r y w i s e b e n c h m ar k s o n t h e b a s i s o f hi s t o r i c a l
p e r f or m a n c e s .

23
4.4 Micro finance services
T h e f ol l o w i n g m i c r o f i n a n c e s e r v i c e s a r e pr a c t i c e d w o r l d w i d e :

4.4.1 Micro crediting :

Small amount of money lent to the client by a bank or
a n o t h e r o rg a n i z a t i o n . M i c r o cr e d i t m a y b e o ff e r e d i n d i v i d u a l l y
o r t hr o u g h g r o u p c r e d i t i n g of t e n w i t h o u t c o l l a t e r a l .

4.4.2 Micro saving :

Deposit services that allow a person to retain small
a m o u n t o f f u n d s f or f u t ur e u s e . O f t e n w i t h n o m i ni m a l b a l a n c e
r e q u i r e m e n t s , s a v i n g a c c o u n t s a l l o w f am i l i e s o s a v e f u n d s i n
order o cover unexpected expenditures and plan future
investments.

4.4.3 Micro insurance

Insurance services, access to which allows the
entrepreneurs to focus more on developing their businesses
c o n c u r r e n t l y r e d u c i n g o t h er r i s k s a ff e c t i n g t h e i r p r o p e r t y,
h e a l t h o f a b i l i t y t o w or k . Ty p e s o f i n s u r a n c e s e r v i c e s i n c l u d e
life insurance, property insurance, health and disability
insurance.

4.4.4 Micro leasing

S e r v i c e s o s m a l l b u s i n e s s e s o r e n t r e pr e n e u r s f o r l e a s i n g
i n e x p e n s i v e e q u i p m e n t , a g r i c u l t ur a l m a c h i n er y o r v e h i c l e s h a t
t h e y c a n n o t a ff o r d t o b u y a t f u l l c o s t .

4.5 Classification of microfinance :

M i c r o f i n a n c e c a n b e c l a s s i f i e d i n t o t hr e e t y p e s . F or m a l ,
I nf o r m a l a n d s e m i i nf o r m a l . T h e r ur a l b a n k s a n d c o o p e r a t i v e s
c o m e u n d er f or m a l m i c r o f i n a n c i n g i n s t i t u t i o n . M o n e y l e n d e r s
a n d s h o p k e e p e r s c o n s t i t u t e t h e i n f or m a l g r o u p a n d
n o n g o v e r n m e n t a l o rg a n i z a t i o n s c o n s t i t u t e t h e i n f o r m a l gr o u p
a n d n o n g o v e r n m e n t a l o rg a n i z a t i o n s c o n s t i t u t e t h e i nf o r m a l
g r o u p a n d n o n g o v e r n m e n t a l o rg a n i z a t i o n s c o n s t i t u t e t h e

24
semiformal group.

A ) Tr a d i t i o n a l i n f o r m a l m i c r o - cr e d i t ( s u c h a s ,
moneylender's credit, pawn shops, loans from friends and
r e l a t i v e s , c o n s u m e r c r e d i t i n i nf o r m a l m ar k e t , e t c . )

B ) M i c r o - c r e d i t b a s e d o n t r a d i t i o n a l i n f or m a l g r o u p s
(such as, tontin, su su, ROSCA, etc.)

C ) A c t i v i t y - b a s e d m i c r o - cr e d i t t h r o u g h c o n v e n t i o n a l o r
s p e c i a l i s e d b a n k s ( s u c h a s , a g r i c u l t u r a l cr e d i t , l i v e s t o c k c r e d i t ,
f i s h e r i e s cr e d i t , h a n d l o o m c r e d i t , e t c . )

D ) R u r a l c r e d i t t hr o u g h s p e c i a l i s e d b a n k s .

E) Cooperative micro-credit (cooperative credit, credit

union, savings and loan associations, savings banks, etc.)

F ) C o n s u m e r m i cr o - c r e d i t .

G ) B a n k - N G O p a r t n e r s h i p b a s e d m i cr o - c r e d i t .

H ) Gr a m e e n t y p e m i c r o- c r e d i t or G r a m e e n cr e d i t .

I ) O t h e r t y p e s of N G O m i c r o - cr e d i t .

T h i s i s a v e r y q ui c k a t t e m p t a t c l a s s i f i c a t i o n of m i c r o-
credit just to make a point. The point is — every time we use
t h e w o r d " m i c r o- c r e d i t " w e s h o u l d m a k e i t c l e a r w h i c h t y p e ( or
c l u s t e r of t y p e s ) o f m i cr o - c r e d i t w e a r e t a l k i n g a b o u t .
O t h e r w i s e w e ' l l c o n t i n u e t o c r e a t e e n d l e s s c o nf u s i o n i n o ur
discussion. Needless to say that the classification I have
s u g g e s t e d i s o n l y t e n t a t i v e . We c a n r ef i n e t h i s t o a l l o w b e t t er
u n d e r s t a n d i n g a n d b e t t er p o l i c y d e c i s i o n s . C l a s s i f i c a t i o n c a n
also be made in the context of the issue under discussion. I am
a rg u i n g t h a t w e m u s t d i s c o n t i n u e u s i n g t h e t e r m " m i cr o - c r e d i t "
o r " m i c r of i n a n c e " w i t h o u t i d e n t i f y i n g i t s c a t e g o r y.

4.6 Microfinance institutions

T h e d i ff er e n t m i c r o f i n a n c e i n s t i t u t i o n s o p e r a t i n g i n I n d i a c a n

25
be classified as mainstream Microfinance institutions and
a l t e r n a t e m i c r of i n a n c e i n s t i t u t i o n .

4.6.1 Mainstream micro finance institutions

N a t i o n a l b a n k f o r a g r i c u l t u r a l a n d r ur a l d e v e l o p m e n t

Small industries development bank of India

H o u s i n g d e v e l o p m e n t f i n a n c e c o r p or a t i o n

Commercial banks

Regional rural banks

The credit cooperative societies

4.6.2 Alternat micro finance institutions

T h e s e ar e t h e i n s t i t u t i o n s , w h i c h h a v e c o m e u p t o t h e f i l l
t h e g a p b e t w e e n t h e d e m a n d a n d s u p p l y f or m i c r of i n a n c e . M F I s
w e r e r e c e n t l y d e f i n e d b y t h e t a s k f o r c e a s t h o s e w h i c h pr o v i d e
thrift, credit and another financial services and products of
v e r y s m a l l a m o u n t , m a i n l y t o t h e p o o r , i n r u r a l , s e m i ur b a n o r
urban areas for enabling them to raise their income level and
improve living standards.

The alternate micro finance institutions include the

following:-

N o n g o v e r n m e n t a l o rg a n i z a t i o n s , w h i c h a r e m a i n l y e n g a g e d i n
p r o m o t i n g s e l f h e l p gr o u p s a n d t h e i r f e d e r a t i o n s a t a c l u s t e r
l e v e l a n d l i k i n g s e l f h e l p gr o u p s w i t h b a n k s u n d e r N A B A R D
scheme.

N G O s d i r e c t l y l e n d i n g t o t h e b or r o w e r s , w h o a r e e i t h e r
o rg a n i z e d i n t o s e l f h e l p gr o u p s . T h e s e N G O s b or r o w b u l k f u n d s
from SIDBI and various donors.

M F I s w h i c h a r e s p e c i f i c a l l y o rg a n i z e d a s c o o p e r a t i v e s s u c h a s
the Sewa Bank and various Mutually aided cooperative thrift
and credit societies

26
M F I s w h i c h a r e o rg a n i z e d a s n o n b a n k i n g f i n a n c e c o m p a n i e s
( N B F C s ) s u c h a s B A S I X , C F T S , M i r z a p u r a n d S h ar e m i c r o
f i n a n c i a l l t d . T h e i n s t i t u t i o n s p l a y i n g a m a j or r o l e i n
m i c r of i n a n c e a r e t h e N G O s . A s N G O s h a v e e n t er e d i n t o t h e
c o m m e r c i a l w o r l d of l e n d i n g m o n e y, m a n y a r e t r a n s f o r m i n g
t h e m s e l v e s i n t o r e g u l a t e d i n s t i t u t i o n s w or k i n g u n d e r t h e l a w
g o v e r n i n g t h e w o r l d of c o m m e r c e .

5.0 INDIAN PROFILE

5.1 POVERTY IN INDIA

Population below poverty line (in Million)

Ye a r Rural % Urban % To t a l % to total
population c o u n t r y ’s
in poverty population
1 9 7 3- 261 56.40 60 49.20 322 55.00
74
1 9 7 7- 264 53.00 65 45.20 329 51.30
78
1 9 8 3- 252 45.70 71 40.80 323 44.50
84
1 9 8 7- 232 39.10 75 38.20 307 38.90
88
1 9 9 3- 244 37.30 76 32.40 320 36.00
94
1 9 9 9- 201 27.10 59 23.60 260 26.00
00

In India 400 million peoples spread across more than six

million villages with population on 745 millions which is about
7 2 % of t h e t o t a l p o p u l a t i o n o f 11 0 2 m i l l i o n s i n 1 9 9 9- 2 0 0 0 t h e
r ur a l p o v er t y i s 2 7 . 1 0% a n d u r b a n p o v e r t y i s 2 3 . 6 0 % d i ff e r e n t
p r o gr a m s h a s b e e n c o n d u c t i n g t o c o p e w i t h i t a n d m i c r o f i n a n c e
m a y b e a e ff e c t i v e w e a p o n i n t h i s r e g a r d .

T h e o rg a n i z e d f i n a n c i a l s e c t o r c a t e r s t o t h e n e e d o f a b o u t
2 0 m i l l i o n p e o p l e . M i c r o c r e d i t i n i t i a t i v e s t a k e n b y d i ff e r e n t

27
financial institution . involved lending small amounts to the
p e o p l e b e l o w p o v er t y l i n e . I t pr o v i d e d b a s i c b a n k i n g s e r v i c e s
like savings and withdrawal along with micro investment
p r o d u c t s l i k e m u t u a l f u n d s . T h i s pr o v i d e d p o or p e o p l e w i t h
s a f e r a v e n u e s f or s a v i n g w i t h l i t t l e v o l a t i l i t y .

5.2 BANKING AND SAVING HABIT IN INDIA

Usage of banking services by Indian household
S o u r c e : C e n s u s of I n d i a 2 0 0 1
To t a l n o . o f N o . of h o u s e h o l d
household using banking
services
Tot a l n o . 19.19 6.8
% of household 100 35.5
Rural 13.83 4.16
% of total 72.00 30.10
household
Ur b a n 5.36 2.65
% of total 28.00 49.50
household

P o s t r e f or m t h e b a n k i n g s y s t e m h a s m o b i l i z e d m o r e
d e p o s i t s a s p e r t h e r e p or t o f d i ff e r e n t c o m m e r c i a l , p u b l i c a n d
private banks the banking sector got a boom in last few
d e c a d e s . D u e t o t h e l i b er a l i z a t i o n p o l i c y s o m a n y p r i v a t e
sector bank commenced their business and led a healthy
c o m p e t i t i o n a l l o v e r t h e c o u n t r y. A n d i t i s a g o o d s i g n f o r
c o u n t r y ’s e c o n o m y t h a t t h e s a v i n g a n d b a n k i n g h a b i t of I n d i a n s
i s i n cr e a s i n g w i t h a g r e a t a c c e l e r a t i o n . E v e r y c l a s s of s o c i e t y .
b u t i n R u r a l a r e a s ( w h i c h s e c t o r d e e m e d a s r e pr e s e n t a t i v e o f
poor) the banking rate is still not satisfactory and it is seemed
t h a t l a c k of p r o p er

28
5.3 MAIN SOURCE OF DEBT PREVAILING IN
INDIA
Debt profile of Households in %

Source of debt 1991-2001 2001-2009

Government 8.30 5.40
Co-operative 7.90 13.10
societies
Employee 11 . 4 0 6.90
Money lenders 27.60 31.70
Shopkeepers 7.30 7.10
Relatives & 12.40 15.10
Friends
Banks 18.90 17.20
others 6.20 3.5

T h e d e b t p r of i l e o f I n d i a n h o u s e h o l d i n d i c a t e s t h a t t h e m a j or
s o u r c e of c r e d i t t o h o u s e h o l d s p a r t i c u l ar l y p o o r i n c o m e
w o r k i n g h o u s e h o l d s h a s b e e n i nf o r m a l s e c t o r l o a n s l i k e m o n e y
l e n d e r s w h i c h a r e u s u a l l y a t v e r y h i g h r a t e s o f i n t er e s t . T h e
t e r m s a n d c o n d i t i o n a t t a c h e d t o t h e s e l o a n i m p a c t t h e p o or
a d v e r s e l y.

T h e p o o r p o p ul a t i o n i n I n d i a s u ff e r s f r o m a gr e a t d e a l of
i n d e b t e d n e s s a n d i s s u b j e c t of e x p l o i t a t i o n d u e t o h i g h i n t e r e s t

29
r a t e a n d t h e l a c k of c o n v e n i e n t a c c e s s t o c r e d i t . R u r a l
h o u s e h o l d s n e e d cr e d i t f o r i n v e s t i n g i n a g r i c u l t ur e a n d
smoothening out seasonal fluctuations in earnings. Since cash
f l o w s a n d s a v i n g s i n r u r a l a r e a s f o r t h e m a j or i t y o f h o u s e h o l d s
a r e s m a l l . R u r a l h o u s e h o l d s t y p i c a l l y t e n d t o r el y o n c r e d i t f or
o t h e r c o n s u m p t i o n n e e d s l i k e e d u c a t i o n ,f o o d , h o u s i n g e t c

5.4 CURRNT INTEREST RATE FOR

DIFFERENT TARGENT GROUPS PREVAILING
IN INDIA
S L . AVA I L A B L E TO A C T I V I T Y / P U R P O S E R AT E O F
NO. WHOM I NT E R E S T %
1 SCB on behalf of all S e a s o n a l a g r i c u l t ur a l I n g e n e r a l
eligible DC-CB in the operations 5 . 7 5 % i n n or t h
f o r m of a east region,
consolidated limit Jammu&
Kashmir
5.25%
2 SCB on behalf of all For financing 6.50%
eligible DC-CB in the approved short term
f o r m of a agricultural allied
consolidated limit. and marketing
activities
3 S C B s o n b e h a l f of a l l M a r k e t i n g of c r o p s 6.00%
eligible DC-CB in the
f o r m of a
consolidated limit
4 SCB on behalf of P r i m ar y w e a v e r s 6.00%
eligible DC-CBs in cooperative societies
the form of a f or p r o d u c t i o n a n d
consolidated marketing of cloth
5 State cooperative For financing 6.25%
banks procurement and
marketing cloth &
trading in yarn by
apex/regional
weavers cooperative
societies.

30
6 Scheduled commercial For financing 6.25%
banks working capital
requirements of
p r i m ar y h a n d l o o m
weavers cooperative
societies
7 State cooperative For financing 6.25%
banks/scheduled working capital
commercial banks r e q u i r e m e n t of
SHDCs &SHnDc
8 S C B s o n b e h a l f of For financing Apex societies
DCCBs/DICBs working capital 6.25%
r e q u i r e m e n t of P r i m ar y
cottage village small societies
s c a l e p r i m ar y a n d 6.00%
apex industries
cooperative societies
9 S C B s o n b e h a l f of For financing of Apex societies
DCCBs/DICBs working capital 6.25%
requirements of P r i m ar y
labour contract & societies6.00%
Forest
labour cooperative
societies.
10 SCBs /DCCBs For financing of 6.00%
working capital
requirements of rural
a r t i s a n s f or
production and
marketing.
11 SCBs /DCCBs For financing of Apex societies
collection and 6.25%
marketing of minor P r i m ar y
f or e s t p r o d u c e . societies
6.00%
12 SCBs/DCCBs and For financing of 5.75%
RRBs working capital
requirements of
Fisheries societies or
individual Fisher
mens.
13 S C B s o n b e h a l f of For financing for SCBs 6.50%
DCCBs procurement stocking O t h e r s 6 . 2 5%

31
 & d i s t r i b u t i o n of
chemical fertilizers
and other Agricultural
input.
14 SCBs agains pledge of For (1) Financing 6.00%
Government securities s e a s o n a l o p er a t i o n s
and handcraft
15 Regional Rural Banks For financing N PA ST- S A O
S e a s o n a l A g r i c u l t ur a l S T- S A )
O p e r a t i o n s & ot h e r
term SAO
16 Liquidity support to For supporting 6.50%
state cooperative conversion
b a n k s b y w a y of S T r e s c h e d u l i n g of
r ef i n a n c e o n b e h a l f o f f a r m er s d u e s a t
DCCBs ground level under
t h e s c h e m e s of
f a r m er s i n D i s t r e s s &
A r r e ar s .
17 SCBs/DCCBs and M e d i u m t er m l o a n s 5.75%
RRBs f or 2 2 a p p r o v e d
agricultural
i n v e s t m e n t p ur p o s e s
18 SCBs befalf of For financing 5.75%
D C C B s i n t h e f o r m of p u r c h a s e of s h a r e s i n
MT credi limits. cooperative
processing socieies.
19 S C B s o n b e h a l f of Against the loan Same as
DCCBs and to RRB converted/ re applicable to
against the loans s c h e d u l e d o f f ar m e r s t h e S T ( S A O)
converted/rescheduled a ff e c t e d b y n a t ur a l loans
calamities converted
20 State Government For contribution of 8.00%
the share capital to
cooperative credit
institutions for
periods up o 12 years

32
 6.0 GRAMEEN BANK IN INDIA

Grameen bank has been working in India since 1992 through

our partners like Share Microfin and Society for Rural
Improvement. Until now, these organization were co-ordinating with
Dhaka office. However, now grameen bank has the necessary
permissions to set up it’s liaison office in India which will allow it
to organise work here better,"

Grameen Trust is the non-profit organisation backing Grameen

Bank and conducts training programs in micro-financing and global
conferences. The Trust operates through 25 partner organizations in
India, which provide microcredit to farmers across the country.
"The support provided by partners in India has helped the needs of
the poor and it aim at making micro-credit more accessible in India,
Grameen Trust operates in 37 countries with 138 partners who
implement micro-credit schemes made by Grameen Bank. As on
May 2006, the microfinance organization had 6.83 million
borrowers, 97% of whom are women.

A local office of the Grameen Trust will boost lending to rural

India. It will also bring with it microfinance expertise, which can
help the MFIs in India adopt the best practices and scale their
operations," said a banking analyst. Majority of the commercial
banks in India including SBI, ICICI Bank and HDFC Bank are
active players in the micro finance space. Banks have partnered
with NGOs and institutions to extend loans to the poor.

India has started replicating Grameen Bank model in

carefully selected and the most poverty stricken villages in Uttar

33
Pradesh and Rajasthan- two states of India.
The Grameen Project of our Bank in its initial period of a little
over two years has covered more than two dozen villages;
disbursed loans aggregating US$ 227,184; mobilised groups and
individual saving of US$ 62,158; repaid loans aggregating US$
130,158 and maintained a record of 100% repayment in weekly
meetings.

As many as 100 countries are reported to have adopted the concept. Even
advanced countries such as the U.K. and the U.S. are turning to micro credit to
address issues of poverty and deprivation. The success of the Grameen Bank's
experiment is often cited to support the currently fashionable but broader goal
of financial inclusion. There is, of course, much more to inclusion than micro
credit but the success in Bangladesh shows that even the more difficult inclusive
practices — such as viable lending to the poorer sections — can be
implemented with a high degree of success.

There is plenty of evidence to show that the Indian financial sector has
been quite innovative. After all, the State Bank of India and a few other
government owned banks pioneered lending to small-scale industry and
agriculture. Though such institutions cannot be placed in the same league as the
Grameen Bank with its success in micro credit, these are stupendous
achievements by themselves. Even the practice of lending with low or nil
security has not been uncommon here.

34
7.0 SELF HELP GROUP STRUCTURE IN
INDIA
D i ff e r e n t s t r u c t ur e h a s d e s i g n e d t h r o u g h w h i c h
m i c r of i n a n c e i n s t i t u t i o n s a n d n o n g o v er n m e n t a l o rg a n i z a t i o n s
could overcome capital constraints and expand their reach. The
s t r u c t u r e s i n c l u d e d b u y i n g t h e m i cr o f i n a n c e p o r t f o l i o s of M F I s
e i t h e r o n a s e l e c t i v e b a s i s o r b u y i n g t h e c o m p l e t e l o a n s of a
b r a n c h o r a p a r t i c u l ar a r e a . A n d a l s o e n t e r i n g i n t o p a r t n er s h i p
arrangements with MFIs . this helped in leveraging the
o p e r a t i o n a l s t r e n g t h o f N G O / M F I w i t h t h e f i n a n c i a l s t r e n g t h of
commercial banks.

In march 2004 he cumulative disbursement to SHGs stood

a Rs.39 billion. According to industry experts, the demand for
m i c r of i n a n c e i n I n d i a w a s e s t i m a t e d a t a b o u t r s . 3 0 0 0 b i l l i o n .
This meant there was huge unmet gap between demand and
s u p p l y.

The main of micro financial initiative was to increase

p e n e t r a t i o n i n t o r ur a l a r e a s b y u t i l i z i n g i t s e x p e r t i s e i n
d i s t r i b u t i o n a n d s t r o n g f i n a n c i a l p o s i t i o n . d i ff e r e n t
commercial bank increased its presence in these areas through
i n n o v a t i v e d i s t r i b u t i o n c h a n n e l s i n or d e r t o p l a y a m a j o r r ol e i n
t h e m i c r o f i n a n c e s e c t o r i t w a s e s s e n t i a l t o d e v e l o p t h e b a n k ’s
r ur a l br a n c h n e t w o r k . T h i s h o w e v e r w a s a c o s t l y p r o p o s i t i o n .
ICICI bank tapped low cost banking channels and entered into
p a r t n e r s h i p s w i t h N G O s a n d M F I s a l r e a d y w o r ki n g i n t h e a r e a
o f r u r a l f i n a n c e . B e i n g t e c h n o l o g i c a l l y s a v v y, t h e b a n k
l e v e r a g e d i t s t e c h n o l o g i c a l e x p e r t i s e w i t h b a n k i n g e x p er i e n c e
a n d m a d e s i g n i f i c a n t i nr o a d i n h e I n d i a n m i c r o f i n a n c e s e c t o r.

35
7.1 SELF HELP GROUP STRUCTURE

B A N K S TA F F
PROJECT MANAGER

O U T S O U R C E S TA F F
C O O R D I N ATO R S

PROMOTERS

COMMUNITY
SELF HELP GROOP

G e n e r a l p re s c r i p t i o n

* 20 bank employee manage one project

36
 * o n e c o o r d i n a t o r f o r 6 p r om o t e r s ar e
prescribed
* one promoter managed 20SHGs
* 2 0 m e m b e r s f o r m o n e gr o u p

7.2 Some models of self help group

S e l f h e l p gr o u p w i l l n e e d t o m o v e o t h e s e c o n d p h a s e o f
p r o v i d i n g cr e d i t f o r s u p p o r t i n g e c o n o m i c a c t i v i t i e s a n d h e l p
heir members to increase heir income levels. Since the self help
g r o u p l a rg e l y t e n d t o b e i n f or m a l g r o u p w i t h i n t h e e x i s t i n g
p r o v i s i o n s of l o w a n d p r a c t i c e b a n k h a v e d i ff i c u l t i e s i n d e a l i n g
w i t h t h e m . t h u s d i ff e r e n t f i n a n c i a l i n s t i t u t i o n s h a s t a k e n m a n y
s t e p i n or d e r t o s h a p e i t t o s o m e s h o r t o f f o r m a l i z a t i o n . T h u s
d i ff e r e n t m o d e l c a m e i n e x i s t e n c e a n d s o m e of w h i c h ar e v e r y
e ff e c t i v e a n d i t h a s m i t i g a t e

7.2.1 Partnership model

T h e s e l f h e l p g r o u p pr o g r a m h a d b e e n f a i r l y s u c c e s s f u l i n
several states of India but reach was limited only to those areas
w h e r e t h e b a n k ’s b r a n c h e s w er e o p er a t i o n a l . T h e p ar t n e r s h i p
m o d e l o f I CI C I B a n k a i m e d a t r e a c h i n g t h o s e a r e a s w h e r e t h e
b a n k d i d n o t h a v e a n y br a n c h e s h i s m o d e l a i m e d a t s y n e rg i z i n g
t h e c o m p a r a t i v e a d v a n t a g e s a n d f i n a n c i a l s t r e n g t h of h e b a n k
w i t h s o c i a l i n t er m e d i a t i o n m o b i l i z a t i o n p o w e r a n d
i n f r a s t r u c t ur e o f M F I s a n d N G O s . T h r o u g h t h i s m o d e l I C I C I
B a n k c o u l d s a v e o n t h e i n i t i a l c o s t s of d e v e l o p i n g r u r a l
i n f r a s t r u c t ur e a n d m i c r o c r e d i t d i s t r i b u t i o n c h a n n e l s a n d c o u l d
t a k e a d v a n t a g e ; o f t h e e x p e r t i s e o f T h e s e i n s t i t u t i o n s i n r ur a l
a r e a s . I n i t i a l l y I C I C I B a n k s t a r t e d o ff b y l e n d i n g t o M F I s a n d
N G O s i n o r d er t o p r o v i d e t h e n e c e s s a r y f i n a n c i a l s u p p o r t t o
t h e i r a c t i v i t i e s l a t e r I C I C I b a n k c a m e u p w i t h a p l a n w h er e t h e
NGO/MFI continued to promote their microfinance schemes,
while the bank met the financial requirements of the borrowers

37
t h e s t r u c t u r e d i v e r s i f i e d t h e r i s k o f I CI C I b a n k a n d a t t h e s a m e
time reduced the capital constraints of NGOs and MFIs.
Under the partnership model the NGO/MFI concentrated
o n t h e m o b i l i z a t i o n a n d t h e b a n k d i r e c t l y l e n d t h e b o r r o w er s
sharing he risk with the NGO. Thus the NGO.MFI had an
a s s u r e d s o u r c e of f u n d s a n d c o n t i n u e d i t s a c t i v i t i e s l i k e l o a n
o rg a n i z a t i o n m o ni t o r i n g a n d c o l l e c t i o n . I C I C I B a n k i d e n t i f i e d
a p o r t f ol i o w h i c h c o u l d b e b o u g h t o u t d e p e n d i n g o n p a r a m e t e r s
l i k e y e a r s of e x p e r i e n c e i n t h e m i c r o f i n a n c e s c o r e n u m b er o f
c l i e n t s a c t i v e b o r r o w e r s p or t f o l i o o u t s t a n d i n g a n d r e p a y m e n t
r a t e t h e i d e n t i f i e d M F I a s s i g n e d t h e m i c r of i n a n c e r e c e i v a b l e s
to ICICE bank but continued to maintain its relationship with
i t s c l i e n t s t h r o u g h a c t i v i t i e s l i k e r e c o v e r y a n d m a n a g e m e n t of
loan.

7.2.2 On tap securitization model

I C I C I b a n k a l s o p i o n e er e d a n o t h er m o d e l k n o w n a s t h e O n
tap securitization model. Here the bank continuously took over
h e l o a n s a s t h e y w e r e m a d e . I n t hi s m o d e l t h e N G O / M F I
s o u r c e d h e l o a n s a n d a s s i g n e d t h e r e c e i v a b l e s u n d er t h e l o a n s
to ICICI bank under an agreement which specified the sourcing
c r i t e r i a a n d o p e r a t i o n a l g u i d e l i n e s . t h e b a n k pr o v i d e d t h e
M F I s s o m e a m o u n t a s a d v a n c e p ur c h a s e c o n s i d e r a t i o n . U s i n g
this he MFI could build assets. The asses thus created were
a s s i g n e d o t h e I CI C I b a n k . T h i s w a s a n o n g o i n g pr o c e s s w h er e
the MFI s continued building the asses and assigned the same
t o I C I C I B a n k s . T hr o u g h t h i s t h e M F I s c o u l d m a i n t a i n a
healthy debt-equity ratio . as the assed did not appear in their
b o o k s t h e M F I s c o u l d a l s o w i d e n t h e i r r e a c h a s t h e y di d n o t
f a c e a n y f i n a n c i a l l i m i t a t i o n s t h e y c o u l d a s s i g n t h e p or t f o l i o
and obtain money from the bank on a continuous basis .

7.2.3 Bank led model

The bank led model was derived from the SHG-Bank linkage
p r o gr a m of N AVA R D . T h r o u g h t h i s pr o g r a m , b a n k s f i n a n c e d
s e l f h e l p gr o u p s w h i c h h a d b e e n t o r ur a l a r e a s t h r o u g h i t s S H G
p r o gr a m . H o w e v e r r a t h e r t h a n s p e n d i n g t i m e i n d e v e l o p i n g
r ur a l i n f r a s t r u c t ur e of i t s o w n i n 2 0 0 0 , I CI C I b a n k a n n o u n c e d
m a e r d r of B a n k of M a d u r a ( B o M ) w h i c h h a d s i g n i f i c a n t
p r e s e n c e i n t h e r ur a l a r e a s of s o u t h I n d i a e s p e c i a l l y Ta m i l n a d u
w i t h a c u s t o m e r b a s e o f 1 . 2 m i l l i o n a n d 7 7 br a n c h e s . B a n k o f
M a d u r a ’s S H G d e v e l o p m e n t p r o g r a m w a s i n i t i a t e d i n 1 9 9 5 .

38
t h r o u g h t h i s p r o gr a m I h a d f or m e d t a r a i n e d a n d i n i t i a t e d s m a l l
groups of women to undertake financial activities like banking
s a v i n g a n d l e n d i n g . B y 2 0 0 0 i t h a d c r e a t e d ar o u n d 1 2 0 0 s e l f
help group
T h e g r o u p i s m a d e a w a r e o f d i ff er e n t o p p o r t u n i t i e s h a
were available to hem and were encouraged o work on social
i s s u e s . T h e s t a r t i n g p h a s e w a s cr u c i a l a s I w a s d ur i n g t h i s
phase that members were encouraged to save money
themselves. And were made aware that savings were very
i m p o r t a n t f o r t h e m t o e m e rg e o u t o f p o v e r t y. T h e o ff i c i a l
provided training to the group in leadership skills group
dynamics noting down the minutes of the meeting and
m a i n t a i n i n g b o o k s of a c c o u n t s .
F r o m a gr o u p o n e gr o u p l e a d e r a n d w o r e p r e s e n t a t i v e s
were chosen. The leader was responsible for managing the
g r o u p o rg a n i z i n g m e e t i n g s a n d m a i n t a i n i n g a c c o u n t s . T h e
r e p r e s e n t a t i v e s w e r e r e s p o n s i b l e f o r m a i n t e n a n c e of t h a t
m i n u t e s b o o k i n w h i c h t h e pr o c e e d i n g s o f e a c h m e e t i n g w er e
r e c o r d e d t h e r e pr e s e n t a t i v e s w e r e a l s o m e m b e r s a s w e l l a s t h e
s a v i n g s a n d l o a n r e g i s t e r w h i c h c o n t a i n e d d e t a i l s of s a v i n g s o f
e a c h m e m b e r a n d of h e g r o u p a s a w h o l e . D e t a i l s of i n d i v i d u a l
l o a n s r e p a y m e n t s i n t e r e s t c o l l e c t e d b a l a n c e e t c . T h e gr o u p m e t
twice each month once to discuss welfare activities and once
f or f i n a n c i a l b u s i n e s s . T h e g r o u p j n d e l i v er a t e d o n a t a n g e o f 2 3
t o p i c s d ur i n g w e l f a r e m e e t i n g s . T h e s e t o p i c s i n c l u d e d s o c i a l
u p l i f t m e n t w a t e r s h e d m a n a g e m e n t e d u c a t i o n f or c h i l d r e n h e a t h
m a n a g e m e n t i n c o m e g e n e r a t i o n e r a d i c a t i o n of s o c i a l e v i l s l i k e
a l c o h o l i s m d o wr y s p o u s a l a b u s e e t c .

7.2.4 Social initiative group

I n e a r l y 2 0 0 0 I CI C I B a n k e s t a b l i s h e d a d e d i c a t e d n o t f o r
p r of i t g r o u p k n o w n a s s o c i a l i n i t i a t i v e s gr o u p w h i c h a i m e d a
m a x i m i z i n g a c c e s s o t h e b a s i c f i n a n c i a l s e r v i c e s n e e d of h e
p o o r t h e m i s s i o n s e a m e n of S I G s a i d I a i m e d t o i d e n t i f y a n d
support initiatives designed to improve the capacities of the
p o o r e s t o f t h e p o o r t o p ar t i c i p a t e i n t h e l a rg er e c o n o m y SI G
w a s a j o i n t v e n t u r e b e t w e e n I C I C I B a n k a n d pr u d e n t i a l U D . I t s
a c t i v i t i e s w e r e a i m e d a t t h e u p l i f t m e n t of p e o p l e f r om l o w
i n c o m e s e g m e n t s a n d i t p ar t n e r e d w i t h s e v e r a l of N G O s
g o v e r n m e n t d e p a r t m e n t s i n t e r n a t i o n a l o rg a n i z a t i o n s c o r p or a t e
r ur a l i n t e r n e k i o s k n e t w or k s a n d M F I s i n t h i s d e e p i n g i n
mining their needs and repayment .

39
 RESEARCH METHODOLOGY

STATEMENT OF PROBLEM:
vegetable venders fall under low-income group. They need small
amount of money for smooth running of their business, thus their financial
requirement is also of small size. So due to small size of amount, in place of
appealing in banks they usually borrow from unorganized financial sources like
moneylenders, local committee, shopkeepers, and even friends & relatives.
Which sometime cause to pay high rate of interest.
Grameen bank emerged as a solution of this problem and it is working
well in different parts of world. But unfortunately it is in its infancy in India.
People don’t know much about micro finance. they do not know about different
programs conducted by Grameen bank. They have no idia how helpful Grameen
bank may be for such people.

RESEARCH OBJECTIVE

To study the financial requirement of vegetable venders. In normal

conditions.
To find out the prevailing sources of finance among vegetable venders.
To study the average monthly saving of vegetable venders. In Normal
conditions.
To study the awareness level of vegetable venders regarding Grameen
bank and Micro finance.
To find out the appropriate interest rate spectrum. Accepted by majority
of vegetable venders.

Research methodology

40
TYPE OF RESEARCH

Descriptive research has been done for understanding the Grameen bank
and idea of micro finance. descriptive study is a fact finding investigation with
adequate interpretation. It is simplest type of research and no adjustment has
been made with the data and information
exploratory research has been done for finding data regarding vegetable
venders.

DATA COLLECTION METHOD USED

Primary source
Primary data was gathered through questionnaire, with open ended
questions in undisguised form. Questionnaire had been prepared in
English and then translated in to Hindi, because most of venders could
not understand English. Some time questions asked verbally because Few
venders were uneducated.
Secondary source
Secondary data was gathered from different sources including Books,
Magazines, Journals and internet.

SAMPLE DESIGN
Sample size used
50 vegetable venders

Sample area covered

Lal pul Sabji bazaar, patelnagar, Dehradun, uttrakhand

Type of sampling used

Random sampling method was used since in a mart all vender are of same
class and usually share same opinion. Regarding finance.

LIMITATION
● Most of vegetable venders were either low educated or illiterate so they faced
problem in understanding the question.

● Most of vegetable venders are unknown with some technical terminology and
its meaning.

41
● Some vender had given the same answer as he/she hear from his/her
neighbors
Instate of giving their own answer.

● They were reluctant to given information regarding their earning, saving and
about their bank accounts.

● Some of them are scared about something unknown. And behave like victims.

● The primary data about Grameen bank gathered from internet and it seems to
be affected by somewhat ‘Window dressing’.

.01 NO. OF PERSON INVOLVED IN SINGLE BUSINESS UNIT (SHOP).

INTERPRETATION:

42
50 respondent gave the answer of this question out of which following data
been gathered. Adjusted for mathematical conveniences.
The no. of person engaged with a single unit of business (which is a shop ) is as
followed.
No. of family members %
1 35%
2 40%
3 13%
4 8%
More 4%
.02 NO. OF FAMILY-MEMBERS, FINANCIALLY DEPENDENT ON
SINGLE BUSINESS UNIT (SHOP

INTERPRETATION:

The no. of family members, which are financially dependent on that particular
business unit (shop). 50 respondent given the answer and outcome data has been
converted in percentage with little bit adjustments.

43
No. of family members %
1 0%
2 8%
3 22%
4 25%
More than 4 45%

.03 RESPONDENTS, HAVING CRAFT-SKILL.

INTERPRETATION:

44
The vegetable vendors having any craft-skills, or not, is being classified as -
skilled, semi skilled, unskilled. The skill is not been distinguished regarding
different kinds.
Particular percentage

Skilled 10%
Semi skilled 20%
Unskilled 70%

.04 RESPONDENT WHO WANT TO SWITCH TO SOMEONE OTHER

BUSINESS

INTERPRETATION:

45
50 respondents gave answer and about 58% do not want to change his/her
profession. And about 42% want to switch to some other profession. The kind
of profession for which they want to switch, was not mentioned .

Response %
Yes 42%
No 58%

.05 AMOUNT OF LIQUID FUND REQUIRED FOR PROPER

CARRYING OF BUSINESS.

INTERPRETATION:

46
50 person gave the answer of this question and only 10% respondent were there
who need more than Rs.5000 per month, and there was not a single answer for
below Rs.2000. thus the commonly held requirement is between Rs.2000-5000.
(the data was gathered for monthly basis.)

Amount Percentage
Up to 2000 0%
2000- 4000 30%
5000 60%
More than 5000 10%

.06 AVERAGE AMOUNT REQUIRED FOR DAILY TRANSACTION

INTERPRETATION:

Average amount required for daily transaction include purchase, carrying cost ,
sweepers wages and other type of implicit expenses.. The response given by the
vegetable venders is as follow:

47
Amount %
Up to Rs.500 18%
Rs.500-1000 45%
Rs.1000-2500 27%
Rs.2000-5000 10%
More than Rs. 50000 0%

.07 PROFIT PERCENTAGE SET BY RESPONDENT

INTERPRETATION:

48
Although the respondents were very reluctant to give the answer. Most of the
respondents have given answer in round figure. Which is converted into
percentage with some adjustments, for calculation convenience.

Profit percentage set by different vegetable venders

Profit percentage Respondent %
10% 60%
20% 30%
30% 10%
More than 30% 0%

.08 PERCENTAGE OF SCRAP IN NORMAL CONDITION

INTERPRETATION:

49
Percentage of scrap (which is very usual in vegetable business) following data
has gathered. Scrap includes normal /abnormal wastage and scraped wastage
also.

% of scrap % of respondents

0% - 5% 40%
6% - 10% 35%
11% - 20% 15%
More than 20% 10%

.09 SOURCE OF DEBT

INTERPRETATION:

50
This question was open ended as appeared in questionnaire, but some
respondent were unable to give the answer due to their unawareness regarding
sources. So the option were provided them verbally. the data gathered is as
follow.

Sources % of respondent
Government 0%
Financial institutes 5%
Local saving societies 15%
Friends/relatives 60%

.10 SATISFIED CUSTOMERS WITH PREVAILING INTEREST RATE

51
INTERPRETATION:

Out of 50 respondents no one gave the answer of this question in Yes. That
means 100% respondents are unsatisfied with prevailing interest rates of
different financial sources. It was the main focus area of entire survey and it
disclose. that Grameen bank can play a vital role in this regard.

.11 APPROPRIATE INTEREST RATE SUGGESTED BY RESPONDENT

INTERPRETATION:

52
This was an open ended question as appeared in Questionnaire but respondent
were not convenient about their suggestion . So they were provided with some
options verbally.
The options and the answer gathered are as follow.

Interest rate % of respondents

0-5% 80%
5-10% 20%
More than 10% 0%

.12 INVESTMENTS

53
INTERPRETATION:

50 respondents given the answer and only 2 respondents gave the answer that
they have invested their saving somewhere else beside their main business.
1 respondent invested his saving for building his house which is under
construction, and he is sure that the one portion of house will be given on rent.
Therefore it also included in investment.

.13 AWARENESS ABOUT MICRO CREDIT

54
INTERPRETATION:

it is very surprised that out of 50 respondents no one has ever listened the word
Micro-credit (Laghu rin in hindi). Thus 100% respondents are unaware about
Micro finance.

.14 AWARENESS ABOUT DIFFERENT CREDIT AND SAVING

POLICIES, PREVAILING THESE DAYS.

55
INTERPRETATION:

Out of 50 respondent 5 respondent are aware about different policies conducted

by different financial institutes. But they could not give any detail when asked.
Their answers were ambiguous and They are very confused with different
technical terms.

.15 NO. OF RESPONDENTS HAVING ACCOUNTS IN BANKS OR

POST OFFICE.

INTERPRETATION

56
Out of 50, only 15 respondent have opened their accounts. Most of them are
fixed account holders. Some people have saving account in Banks. But due to
the very fluctuating nature of this business they always been worried about due
or penalty. They don’t know the importance of current account and no one have
current account.

FINDINGS

● It is generally believed by most of vegetable venders that Two person are

sufficient for smooth conducting of business.

● There are big families dependent on single business unit.

● Some vegetable venders are skilled or semi skilled artisans. And want to
conduct their own profession as self enterprise.
● The average amount of liquid asset required per month falls within Rs.2000-
to-5000. The average profit rate set by them is about 20%-30% of sale value,
even than most of vegetable venders are financially poor.

● There are lot of fluctuation in business due to seasonal change. They never
prepare for contingency.

● there is a high rate of wastage in this business.

● Most of the vegetable venders. usually take loan from friends and some time
they entrapped by moneylenders and pay huge interest rate.

● Most of them are unsatisfied with the prevailed interest rates.

● there are lack of information regarding financial institution and their

accessibility.

● Most of venders never hared the term ‘Micro-finance.’

● Most of them never try to know about the policies and plans conducted by
different financial institution

57
● Some vegetable venders have decade old relationship with their money-
lenders and now they don’t want to change their conventional source of finance
even, it is available at much cheaper rate.

● Most of them never join any local saving committee. And never join any
union

58
 CONCLUSION

● It is generally believed by most of vegetable venders that Two person are

sufficient for smooth conducting of business but in most of cases there are more
than 2 person engaged in a single unit of business. Which yield hidden
un-employment.

● There are big families dependent on single business unit. Which reduce
monthly saving. Which is one of the main reason of poverty among these
families.

● There are some vegetable venders, who are good artisan and having hand-
craft skill so they could earn more if they were in that profession. But
unfortunately, due to lack of fund they could not start their own enterprise.

● The average amount of liquid asset required per month falls within Rs.2000-
to-5000. The average profit rate set by them is about 20%-30% of sale value,
which is a good profit percentage, comparing to other business. But due to
perishability of vegetable/Fruit they have to bear lot of wastage and scrap loses.
Which ultimately reduce profit

● There are lot of fluctuation in business due to seasonal change. They never
prepare for contingency.

● They use conventional storing technique for storing vegetables and fruits.
Which cause lot of wastage. Most of them never try to learn or know about
modern storing techniques of storing.

● Most of the vegetable venders never have maintained any kind of account.
They usually take loan from friends and some time they entrapped by
moneylenders and pay huge interest rate.

● Most of them are unsatisfied with the prevailed interest rates. But interesting
thing is that they themselves could not suggest any appropriate rate of interest.
It show the lack of awareness regarding finance.

59
● there are lack of information regarding financial institution and their
accessibility. They scared about paper work. And official formalities.

● Most of venders never hared the term ‘Micro-finance.’

● Most of them never try to know about the policies and plans conducted by
different financial institution and they are much confused with technical
terminology and worried about paper work. Not only illiterate person but also
most of literate vender, Shown aversion to get information due to so-called
tough terminology.

● Lack of trust on financial institution is the other cause of there unawareness

regarding financial policies

● Some vegetable venders have decade old relationship with their money-
lenders and now they don’t want to change their conventional source of finance
even, it is available at much cheaper rate.

● Most of them never join any local saving committee, and never been the
member of any union. There is complete lack of organized business. Due to
which some time they have to face and fill illegal demand. Moreover they have
to loose many advantages and benefits of organized business.

60
 SUGGESTION

There is no doubt that concept of ‘Grameen bank’ is a noble concept and can
serve very effectively for helping poor vegetables venders. Which is the target
group of our survey. However, unfortunately The grameen bank is in its
infancy in India and it have to go long way.

The self help groups are the executive unit of grameen bank. Which are formed
by people, on the basis of mutual-understanding. With the size of 6 to 8 person
in a group. in order to obtain loans a vender must join a group and be a member
of it. Because it will provide him many financial facilities and will encourage
mutual cooperation among venders.

Vegetable venders are working in an unorganized sector. So they should make

self help groups. It can help them to modifying it as organized sector. and they
will enable to tap most of the advantages which an organized sector enjoy.

Micro finance provided by self help group, is a small amount of loan, which
equipped a poor person to start its own business. So those vegetable venders
who are artisan or having craft skill they can switch their business and can start
there own desired enterprise.

The self help group provides both obligatory and voluntary saving form. Thus
vegetable venders can save their monthly saving in routine way. and in case of
contingency they do not need to have face forced saving, because of its
obligatory nature.

As we know the vegetable vending is a very busy job and vender do not have
much time to go to the bank. so they should join the self help group because it
provides services at the door step of the members on the principle that the
people should not go to the bank, bank should go to the people..

Vegetable venders can get loan in a continuous sequence. New loan becomes
available a borrower if his/he previous loan is repaid. This business is of
recurring type and self-help group is the best option for such type of business.
In which saving and borrowing take place continuously.

61
As we find in our survey. There are many people engaged in single business
unit (shop). While common belief is that just two persons are sufficient for
smooth conducting of business. Thus Grameen bank can play a vital role in this
regard.Grameen bank provide self employment by creating such opportunity in
different field including learning and training program. Thus the family
members of vegetable vender can take this advantage.

Grameen banks thumb rule is to keep interest rate as close to the market rate
prevailing in the commercial banking sector as possible. This is the top most
advantage which a vegetable vender can get after joining a self help group. Thus
he/she must take all these advantages.

62
 ABBREVATIONS

NABARD National Bank of Agriculture and Rural Development.

BGB Bangladesh Grameen Bank.

SHG Self Help Groups.

MFI Micro Finance Institutions.

MFDF Micro Finance Development Fund.

NBFC Non Banking Financial Corporation.

SCB State Cooperative Bank.

BARD Bangladesh Academy for Rural Development.

MEL Micro Enterprise loan.

RMK Rastriya Mahila Kosh.

SG Solidarity Group.

63
 REFERENCES

1 www.google.com.in
2 www. Bangle desh grameen bank.com

64
 QUESTIONNAIRE

(SURVEY ON REQUIREMENT OF MICRO CREDIT FOR

VEGETABLE VENDERS)

State:……………………….
Dist.: ………………………
City : ………………………
Zone: ……………………….

Name of respondent:……………………….
Age: …………………………………………
Educational condition:……………………..
Occupation: …………………………………

Family Composition

Infants 0-2 yrs: ……………………………..

Children 2-12 yrs: ………………………….
Teenagers 13-19 yrs: ……………………….
Adult 20+ : ………………………………….
Total family members: …………………….

 How many persons of your family are engaged in this business? .

………………

 How many persons are dependent on this business?

……………………………

 How many persons are sufficient for smooth running of this business ?
…………
 How many days in a month your shop been closed?
……………………………

 Is there any effect you appear in your business due to seasonal fluctuation?
…………………………………………………………………………………

 Have you ever think about switching this business for some other?
……………

65
 Do you have any craft-skill or technical know how?
……………………………

 If yes please give details:

…………………………………………………………
……………………………………………………………………………………
…………………………………………………………………………………

 How much liquid fund do you think would enough for proper carrying of your
business? (Per month.) …………………………………………………………

 How much amount (average) do you require for purchasing vegetable/fruits

from mart each day?
……………………………………………………………………

 How much extra cost have you incurred beside purchasing cost?
…………………………………………………………………………………

 Have anybody ever make any illegal demand?

…………………………………………………..……………………………

 Please give details:

……………………………………………………………………………………
…………………………………………………………………………………

 What profit-percentage have you set for normal condition?

……………………..

 What is the percentage of scrap in normal condition?

……………………………

 How much money you save each month?

………………………………………

 Have you make any investment? (Somewhere else)

……………………………

 Have you any account somewhere in bank/post office etc.?

……………………

 What is your source for debt?

……………………………………………………

66
 What percent of interest do you pay for this debt?
………………………………

 Do you need a reliable source for debt, with minimum interest rate ?
…………..

 Have you ever been a member of any local saving/lending committee?

…………

 If yes what about your experience?

……………………………………………………………………………………
……………………………………………………………………………………

 Have you ever try to know about different loan policies prevailing these days?
…………………………………………………………………………………

 Have you ever listen about micro credit?

…………………………………………

 If I give you a loan of 25,000 with least possible interest rate, what is the first
thing you will do?
……………………………………………………………………………………
……………………………………………………………………………………
…………………………………………………………………………………

 What interest rate do you think is appropriate in normal condition, with which
you can easily repay your loan?
……………………………………………………………………………………

 How much maximum saving you can make in a month for repaying this loan?
……………….………………………………………………………………

 Is there any other way you can invest this money beside your routine
business?
……………………………………………………………………………..……
……………………………………………………………………………………

67
 What is your utmost need for improving business conditions?
……………………………………………………………………………………

 Any suggestion.
…………………………………………………………………………………
……………………………………………………………………………………
…………………………………………………………………………………

THANKING YOU

68
 Ikz”ukoyh

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losZ{k.k

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+++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++
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+++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ +
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+ ++++ + +++++ ++ + + + ++++ + +++++ ++ + +
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+ ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++
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+++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++

69
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++++ ++ + + + ++++ +++

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+ + + + ++++ + +++++ ++++++

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+ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++++

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70
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D;k vkius orZeku O;olk; ds vfrfjDr dgha vkSj fdlh izdkj dk dksbZ fuos”k fd;k
gS\

D;k orZeku esa vkidk fdlh laLFkku ¼cSad iks0vk0 vkfn½ esa dksbZ thfor
[kkrk gS \ vkidk _.k dk
lzksr D;k gS +++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ +
+ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ +++
++++ + +++++ ++ + + + ++++ + +++++ + ++++ + +++++ ++ + +++

LkkekU; _.k ds fy;s vki fdl nj ls C;kt pqdkrs gSa \+++ + +++++ ++ + + + ++++
+ +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++

D;k vki fdlh fo”oluh; _.k lzksr dh vko”;drk eglwl djrs gSa tks vkidks U;wure
C;kt nj ij _.k miyC/k djok lds \+++ + +++++ ++ + + + ++++ + +++++ ++ + + +
++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++
++ + +++++ ++

71
D;k vki dHkh fdlh LFkkuh; lap; _.k lfefr ds lnL; jgsa gSa +++ + +++++ ++ + +
+ ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++

;fn gka rks vkidk vuqHko dSlk jgk % +++ + +++++ ++ + + + ++++ + +++++ +
+ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ +
+ + ++++ + +++++ ++

D;k vkius fofHkUu laLFkkuksa }kjk pykbZ tk jgh fofHkUu _.k ;kstukvksa ds
ckjs esa tkuus dk iz;kl fd;k gS \ +++ + +++++ ++ + + + ++++ + +++++ ++ + +
+ ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + +
+++ + +++++ ++

D;k vki y?kq _.k ¼ekbdzks dzsfMV½ ds ckjs esa dqN tkurs gS \ +++ + +++++
++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++
+ + + ++++ + +++++ ++ + + + ++++ + +++++ ++

;fn vkidks 25]000 :0 dk _.k U;wure laHko C;kt nj ij miyC/k djok;k tk;s rks vki
igyk
dke D;k djsaxs \ +++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + ++++
+ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ +
+

lkekU; ifjfLFkfr;ksa esa C;kt dh fdl laHko nj dks vki mi;qDr le>rs gSa \ ftl nj ij
vki vklkuh ls _.k pqdk ldsa A +++ + +++++ ++ + + + ++++ + +++++ ++ + + +
++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++
++ + +++++ ++

iz;kl djus ij vki lkekU; ifjfLFkfr;ksa esa vf/kdre fdruh jkf”k izfrekg cpk ldrs gSa
\ +++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++
++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ +++ + ++++
+ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ +
+ + + + ++++ + +++++ ++ + + + ++++

D;k orZeku O;olk; ds vfrfjDr fdlh vU; txg bl jkf”k dk fuos”k dj ldrs gSa \ +++
+ +++++ ++ + + + ++++ +
+++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + ++
+++ ++ + + + ++++ + +++++ ++

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O;olk; esa lq/kkj ykus ds fy;s vkidh loksZPp izkFkfed vki”;drk D;k gS \ +++ +
+++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++
+ + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++

D;k vki dksbZ lq>ko nsuk pkgrs gSa% +++ + +++++ ++ + + + ++++ + +++++
++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++ + + + ++++ + +++++ ++
+ + + ++++ + +++++ ++

/kU;okn

Self help groups has attracted attention as a possible way of delivery micro
finance services to poor populations that have been difficult to reach directly
through banks or other institutions.

An economically poor individual gains strength as part of a group.

SHG reduces transaction costs for both lenders and borrowers.

While lenders have to handle only a single SHG account instead of a large
number of small-sized individual accounts, borrowers as part of an SHG cut
down expenses on travel (to & from the branch and other places) for completing
paper work and on the loss of workdays in canvassing for loans.

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 Self-help groups have bank-linkage programs. They borrow from banks once,
accumulate a base of their own capital, and have established a record of
accomplishment of regular repayments.

By aggregating their individual savings into a single deposit, Self-help groups

minimize the bank's transaction costs and generate an attractive volume of
deposits.

Through self-help groups, the bank can serve small rural depositors while
paying them a market rate of interest.

Self-help groups work as non-profit organizations (NGOs) that generally have

broad
Anti -poverty agendas

. Self-help groups are seen as instruments for a variety of goals including

empowering women, developing leadership abilities among poor people,
increasing school enrolments, and improving nutrition and the use of birth
control.

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