Name of the Student: Arun Khandelwal Enrollment No: 07BS0050

Mobile No: 9903510832 E-mail Id: arunkhandelwal1983@gmail.com

Management Research Project

Project Proposal

Synopsis
"In a world where 3 billion people live on less than $2 a day, it is not enough to
help 1,000 or even 100,000 individuals. Our goal is to bring microfinance to tens
of millions of people—enough to truly change the world."
—ACCION International
Microfinance Institutions: Financial services, primarily credit, provided by
regulated and competing financially self-sufficient institutions, to economically-
active poor and lower-income women, from funds provided by public savings and
other commercial funds

Challenges faced by Microfinance Institutions in India:

1. Widespread political opposition to higher interest rates that allow
Microfinance Institutions to cover costs and risks.
2. High levels of Nonperforming Assets.
3. 1000 private Microfinance Institutions, only 2 or 3 of which have major
clients, i.e more than 1,00,000 customers and have economies of scale

Summary: The major challenges for the Microfinance Institutions will be high
levels of Nonperforming Assets. The Microfinance Institutions are thus more
focused on their Nonperforming Asset management. Based upon the past data of
Nonperforming Assets in Microfinance, and analysis of statistics, Projections of
Nonperforming Assets over the next 3 years will be made. Increasing
Nonperforming Assets decreases the Net Business Margin of the Microfinance
Institutions. This project will attempt to determine the strategies for recovering
Non Performing Assets in the past and develop strategies to reduce Non
Performing Assets in the future. As the value of individual Nonperforming Assets
is very small, what should be the approach towards Nonperforming Asset
management in Microfinance Institutions when compared to traditional banking?
1) Project Proposed: Nonperforming Asset Management in Microfinance
Institutions
2) Description of the project in brief: The Project deals with
1. Understanding the concepts of Microfinance.
2. History of Microfinance
3. Understanding Nonperforming Assets in
Microfinance, its magnitude and major causes.
4. Current scenario of Nonperforming Assets in
Micro-Finance
5. Future of Microfinance &Projection of
Nonperforming Assets over next 3 years
6. How Microfinance institutions are recovering
Nonperforming Assets
7. Comparison with the traditional banking approach
to recovering Nonperforming Assets
8. Recommendations
3) Objective of the Project:
1. Improving the Nonperforming assets position in Microfinance Institutions
2. New Lessons, if any, for traditional Banking from management of
Nonperforming assets by Microfinance Institutions
4) Methodology:
Research: Papers in journals, newspapers, questionnaire, seminars,
lectures and related websites.
Analysis of research data and results in the Microfinance Institutions to
determine how these are affected in the short and long terms by interest
rates, inflation rates ,GDP growth and unemployment, utilizing SPSS.
Project the Non-performing Assets over next 3 years, using Trend,
extrapolation and Regression Analysis.
 5) Schedule:
Schedule: Project will take 6-8 months for completion according to the
following schedule:-
Following to be completed by 5 Sept’08
1. Understanding the concepts of Microfinance.
2. History of Microfinance
3. Understanding Nonperforming Assets in Micro-Finance, its magnitude and
major causes.
4. Current scenario of Nonperforming Assets in Microfinance
Following to be completed by 5 Dec’08
1. Future of Microfinance &Projection of Nonperforming Assets over next 3
years
2. Personal visit to Microfinance institutions.
Following to be completed by 20 Feb’09
1. How Microfinance institutions are recovering Nonperforming Assets
2. Comparison with the traditional banking approach to recovering
Nonperforming Assets
3. Recommendations
6) Limitations of the study:
1. Relates to managing nonperforming assets in Microfinance
institutions within India.
2. Quantum of Nonperforming assets in Microfinance Institutions
cannot be directly accessed.
3. Samples are not random and will be predetermined.
4. Only a representative sample of 20-25 institutions, from the largest -
Grameen Bank to the smallest, across the entire range will be
studied.
7) References:
1) Papers in journals related to Microfinance
2) Websites related to Microfinance
3) Articles, Seminars & lectures related to Microfinance
4) Questionnaire.
5) Personal visit to Microfinance institutions.
8) Faculty Guide Name: Prof. Ravi Kumar

Signature of the Student