Unit 4

Noida Institute of Engineering and Technology,
Greater Noida
Microfinance & Development
Unit: IV
Subject Name:
Faculty Name
Indian Financial Market and Services
Iftikhar Baig
Course Details Assistant professor
(MBA 3rd Sem.) Department-MBA
Faculty Name: Iftikhar Baig Subject code and abbreviation: AMBA FM0313 IFMS Unit Number::IV 1
03/19/2024
Syllabus
UNIT I: Structure of Indian financial system (6 Hours)
• Structure of Indian financial system: An overview. Theories
of the Impact of financial development and savings; Prior
saving theory, Credit creation Theory, Theory of forced
savings, Financial regulation theory, Financial liberation
Theory.
UNIT II: RBI & Financial Institutions (10 Hours)
• Reserve Bank of India: organization, management and
functions, Recent monetary policy of RBI, Commercial banks:
meaning, functions, present structure, types, e-banking and
recent developments in commercial banking, NBFC, Sectorial
financial institution NABARD, Exim Bank and PFC
03/19/2024 Faculty Name: Iftikhar Baig Subject code and abbreviation: AMBA FM0313 IFMS 2
Unit Number::IV
Syllabus
UNIT III: Indian Financial Markets (8 Hour)
• Money market: meaning, constituents, functions of money
market, Money market instruments: call loans, treasury bills,
certificates of deposits, commercial bills, trade bills, Recent
trends in Indian money market, Capital market: primary and
secondary markets, their role recent developments, Government
securities market, SEBI: objectives and functions.
UNIT IV: Microfinance Development (8 Hours)
• Overview of micro finance; Types of micro finance; Income
generating activities and Micro Enterprise Market (demand)
analysis, Technological analysis, Socioeconomic analysis,
Environmental analysis. Logical framework, Implementation &
Monitoring Credit Delivery Methodology; Strategic Issues in
Microfinance: Sustainability.
Unit Number::IV
Syllabus
UNIT V: Principles and Practice of Insurance (7 Hours)

• Principles and Practice of Insurance-Introduction to Risk and
Insurance, Types of Insurance-General and Life, Basic
principles of General and Life Insurance, Insurance contracts-
Regulations on investments (IRDA), Costing and pricing of
insurance products, Insurance Premiums & Riders, maturity
& Claims.
Unit Number::IV
Topic Mapping with course outcomes
Mapping
Unit-IV So. Topic Course Level
No. Outcomes
IV 1 Micro Finance CO4 High

History of Microfinance CO5 Low
2 Name of Microfinance Cos. CO4 High
Microfinance Approach CO5 Medium
Faculty Name: Iftikhar Baig Subject code and abbreviation: AMBA FM0313 IFMS Unit Number::IV
03/19/2024 5
Introduction to Microfinance
• Microcredit
Microcredit is the extension of very small loans (microloans) to the
unemployed, to poor entrepreneurs and to others living in poverty
who are not considered bankable.
• Micro Finance
“It is a provision of a broad range of financial services such as
deposits, loans, payment services, money transfers, and insurance to
poor and low-income households and their micro-enterprises.”
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Introduction to Microfinance
•Micro insurance
Financial arrangement to protect low-income people against
specific perils in exchange for regular premium payments
proportionate to the likelihood and cost of the risk involved
•Micro savings
Deposit services that allow one to store small amounts of money for
future use. Often without minimum balance requirements, savings
accounts allow households to save in order to meet unexpected
expenses.
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Microfinance Features
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Few Name of Microfinance Cos.
Few Name of Microfinance Cos.
• Annapurna Microfinance Pvt. Ltd
• Arohan Financial Services Pvt. Ltd
• Asirvad Microfinance Pvt. Ltd
• Bandhan Financial Services Pv.t Ltd
• BSS Microfinance Pvt. Ltd
• Cashpor Micro Credit
• Disha Microfin Pvt. Ltd
• Equitas Microfinance Pvt. Ltd
• ESAF Microfinance and Investments Pvt. Ltd
• Fusion Microfinance Pvt. Ltd
03/19/2024 Faculty Name: Iftikhar Baig Subject code and abbreviation: AMBA FM0313 IFMS Unit Number::IV 9
History of Microfinance
• History of Microfinance
The Pioneers :
1. Grameen Bank:
• Grameen Bank is a microfinance organisation and
community development bank founded in Bangladesh. It
makes small loans to the impoverished without requiring
collateral.
• Founder: Muhammad Yunus
• Founded: October 1983, Bangladesh
• Headquarters: Dhaka, Bangladesh
• Number of locations: 2,568
• Subsidiaries: Grameen Capital Management Limited, MORE
• Key people: Muhammad Yunus, Abul Khair
History of Microfinance in India

• Microfinance is not a new concept. Small operations have existed
since the 18th century. The first occurrence of microlending is
attributed to the Irish Loan Fund system, introduced by Jonathan
Swift.
• Microfinance has been in practice for ages (though informally).
• Legal framework for establishing the co-operative movement set
up in 1904.
• Reserve Bank of India Act, 1934 provided for the establishment
of the Agricultural Credit Department.
• Nationalization of banks in 1969.
• Regional Rural Banks created in 1975.
• NABARD established as an apex agency for rural finance in
1982.
2. ACCION International:
Accion is a global nonprofit with a mission to advance financial
inclusion by giving people the financial tools to improve their
lives. Founded as a community development initiative serving
the poor in Venezuela, Accion is known as a pioneer in the
fields of microfinance and fintech impact investing.
• Headquarters: Massachusetts, United States
• Founder: Joseph Blatchford
• Founded: 1961
• Former name: Accion U.S. Network
• Subsidiaries: Accion U.S. Network, Accion Africa Asia
Investment Company
• Type of business: Non-profit organisation
3. FINCA International:
FINCA International is a non-profit, microfinance

organization, founded by John Hatch in 1984. Sometimes
referred to as the "World Bank for the Poor", FINCA is the
innovator of the village banking methodology in microcredit and
is widely regarded as one of the pioneers of modern-day
microfinance.
• Headquarters: Washington, D.C., United States
• Founder: John Hatch
• Founded: 1985
• Assets: 13.05 crores USD (2011)
• Revenue: 6.19 crores USD (2011)
• Subsidiaries: FINCA Uganda Limited,

• Microfinance has been in practice for ages (though
informally).
• Legal framework for establishing the co-operative movement
set up in 1904.
• Reserve Bank of India Act, 1934 provided for the
establishment of the Agricultural Credit Department.
• Nationalization of banks in 1969.
• Regional Rural Banks created in 1975.
• NABARD established as an apex agency for rural finance in
1982.
Microfinance Approach
• Microfinance Approach
• Poor are Bankable; successful initiatives in micro finance
demonstrate that the borrowers are not 'weaker sections' in
need of charity, but can be treated as responsible people on
business terms for mutual profit.
• They have the inherent capacity to save small amounts
regularly and are willing to save provided that they are
motivated and facilitated to do so.
• Easy access to credit is more important than cheap subsidized
credit which involves lengthy bureaucratic procedures.
• Peer pressure' in groups helps in improving recoveries.
Daily Quiz
1. Every financial market has the following characteristic:
A) It determines the level of interest rates. B) It allows common stock
to be traded. C) It allows loans to be made. D) It channels funds
from lenders-savers to borrowers-spenders.
2. Financial markets have the basic function of
A) bringing together people with funds to lend and people who want to
borrow funds. B) assuring that the swings in the business cycle are less
pronounced. C) assuring that governments need never resort to
printing money.
3. Which of the following can be described as involving direct
finance?
A) A corporation’s stock is traded in an over-the-counter market.
B) People buy shares in a mutual fund. C) A pension fund manager buys
commercial paper in the secondary market. D None of the above.
Daily Quiz
4. Define banks.
5. Define banker.
6. Discuss investors
7. Define financial transaction.
8. Discuss financial assets.
9. Explain clearing house.
10. Discuss savings.
Summary
• We have covered the following topics in this lecture:

• Micro Finance
• Name of Microfinance Cos.
Prerequisite and Recap
• Micro Finance
• Name of Microfinance Cos.
Mapping
Unit- So. Topic Course Level
IV No. Outcomes
1 Types of Microfinance CO4 High

IV Impact of Microfinance CO5 Medium
over poverty
2 Current Scenario of CO4 High
Microfinance in India CO5 Medium
03/19/2024 20
Objectives of topic/Session
• Students will be able to know the following concepts:

• Types of Microfinance
• Impact of Microfinance over poverty
• Current Scenario of Microfinance in India
• Microfinance industry posts 38% growth in 2018-19
Types of Microfinance
1.Self Help Groups (SHGs)
SHGs is group of rural poor who have volunteered to organize
themselves into a group for eradication of poverty of the
members. They agree to save regularly and convert their savings
into a Common Fund known as the Group corpus.
• A self-help group may consist of 10 to 20 persons.
• All members should belongs to B P L families, but in some
exceptional cases they can be from families above the poverty
line.
• The group should be able to collect the minimum voluntary
saving amount from all the members regularly in group
meetings.
• Joint Liability Group(JLG)
Joint Liability Group can be explained as the informal group
consists of 4-10 individuals who try to avail loans against
mutual guarantee from banks for the purpose of agricultural
and allied activities.
• This category generally consists of tenants, farmers and other
rural workers. They work primarily for lending purposes,
although they also offer the savings facility.
• In this type of institution every individual of a borrowing
group is equally liable for the credit. This kind of institution is
simple in nature and requires little or no financial
administration
3. The Grameen Bank Model
• Grameen Model was introduced by the Nobel laureate Prof.
Muhammad Yunus in Bangladesh during 1970s. It has been
widely adopted in India in the form of Regional Rural Banks
(RRB).
• The goal of this system has been the overall development of the
rural economy which generally consists of financially backward
classes.
• But this model has not been fully successful in India as rural
credit and system of recovery are a real problem. Huge amount of
non-performing assets also led to failure of these regional banks.
• Compared to this model Self Help Groups have been more
successful as they are more suited to the population density of
India and far more sustainable (Dash, 2013).
4. Rural Cooperatives
• Rural Cooperatives in India were set up during the time of
independence by the government. They used the mechanism to
pool the resources of people with relatively small means and
provide financial services.
• Due to their complex monitoring structure, their success has
been limited. In addition, this system only catered to the
credit-worthy individuals of rural areas, not covering a large
part of the country’s financially backward section (Rajendran,
2012).
Impact of Microfinance over poverty
1.Through the labour market
2.Through the capital market
3.Through the markets for goods consumed by poor people
4.Through production linkages
Current Scenario of Microfinance in India
• The total number of microfinance accounts was 9.33 crore at
the end of March 2019
• Non-Banking Finance Company-Microfinance Institutions
(NBFC-MFIs) hold the largest share of portfolio in micro-
credit
Microfinance industry posts 38% growth in 2018-19
•Microfinance industry posts 38% growth in 2018-19
• NEW DELHI : The microfinance industry's gross loan
portfolio (GLP) stood at ₹1,87,386 crore at the end of March,
up 38 per cent year-on-year, said a Microfinance Institutions
Network (MFIN) report.
• The total number of microfinance accounts was 9.33 crore at
the end of March 2019, showing a growth of 21.9 per cent,
said Microfinance Institutions Network (MFIN), an RBI-
recognised self-regulatory organisation and industry
association of the microfinance industry.
• Non-Banking Finance Company-Microfinance Institutions
(NBFC-MFIs) hold the largest share of portfolio in micro-
credit with the total loan outstanding of ₹68,868 crore, which
is 36.8 per cent of total micro-credit universe.
Faculty Name: Iftikhar Baig Subject code and abbreviation: AMBA FM0313 IFMS Unit
03/19/2024 28
Number::IV
As on March 31, 2019, aggregated GLP of NBFC-MFIs stood
at ₹68,207 crore, 47 per cent year-on-year growth compared
to March 2018, said MFIN.
• In 2018-19, microfinance in India showed rapid, regionally-
balanced and resilient(flexible) growth, said Harsh
Shrivastava, chief executive officer, MFIN.
• "Apart from the growth in loan size and loan accounts, the
growth of the staff of NBFC-MFIs was also heartening at 34
per cent, now totalling to 1,04,973 people," he said.
• Eastern India's growth continues, with Bihar and Odisha now
ranked 2 and 3 in terms of states, MFIN added.
• MFIN members constitute 53 NBFC-MFIs and, collectively,
they have disbursed 3.25 crore loans worth ₹82,928 crore
during 2018-19.
"This represents a growth of 63 per cent compared to 2017-18.

Total equity grew by 42 per cent during the same period and is
at ₹14,206 crore," MFIN said.
• MFIN's current primary members consist of 53 NBFC-MFIs
along with 38 associates including banks, small finance banks
and NBFCs.
Daily Quiz
printing money.
finance?
Daily Quiz
4. Define FDI.
5. Define banker.
Summary

Mapping
IV No. Outcomes
1 Challenges in the Indian CO4 High

IV context CO5 Low
Microfinance for women
in India
2 Part I core values of CO4 High
microfinance CO5 Medium
03/19/2024 35

• Challenges in the Indian context
• Microfinance for women in India
• Code of conduct for microfinance institutions in India
• Part I core values of microfinance
Challenges in the Indian context

• Appropriate legal structures for the structured growth of MF
operations.
• Finding adequate levels of equity for the new entities to
leverage loan funds.
• Ability to access loan funds at reasonably low rates of interest.
• Ability to attract and retain professional and committed human
resources.
• Design of apt MIS including user friendly software for
tracking accounts and operations.
• Appropriate loan products for different segments.
03/19/2024 37
• Ability to innovate, adapt and grow.

• Bring out a compendium of small and micro enterprises for the
MF clients.
• Identify and prepare a panel of locally available trainers.
• Ability to train trainers.
• Capacity to provide backward linkages or create support
structures for marketing.
• There is a break-even point in loan and deposit sizes below
which banks lose money on each transaction they make. Poor
people usually fall below it.
• Designing financially sustainable models
Microfinance for Women in India
• Microfinance for Women in India

• Women's Role in Economy
• Women and micro finance
• Women’s participation in Micro financing activities
Rural Finance for Rural women
• Rural Finance for Rural women

• Rural women at a glance
*Loan facilities
*Saving facilities
• Sources of finance available
*Official system
*Unofficial system
*Agriculture organization
• Training and information for rural women
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Number::IV
SWOT Analysis of Microfinance Cos.
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Number::IV
Code of conduct for microfinance institutions in
india
• Code Of Conduct For Microfinance Institutions In India
• Preamble
• Microfinance Institutions (MFIs), irrespective of legal forms, seek
to create social benefits and promote financial inclusion by
providing financial services to clients of financially un-served and
underserved households.
• Over time, the Microfinance Sector has become an integral part of
the financial infrastructure for the vulnerable sections of society in
India.
• This document includes:
• Part I: The Core Values of Microfinance Part II: Code of Conduct for
Microfinance Institutions (The Code) Part III: Client Protection
Guidelines for MFIs Part IV.
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Number::IV
Part I core values of microfinance
• Part I Core Values Of Microfinance

• The Core Values of Microfinance can be stated as follows:
• A. Integrity:
• B. Quality Of Service:
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Number::IV
• C. Transparency:
• D. Fair Practices:
• E. Privacy Of Client Information:
• To safeguard personal information of clients, allowing
disclosures and exchange of relevant information with
authorized personnel only, and with the knowledge and
consent of clients.
• F. Integrating Social Values Into Operations:
• To ensure high standards of governance and management.
• To monitor and report social as well as financial data.
• G. FEEDBACK and Grievance Redressal MECHANISM:
• To provide clients formal and informal channels for feedback
and suggestions.
• To consistently assess the impact of services in order to
enhance competencies and serve clients better.
• To provide a formal grievance redressal mechanism for
clients.
Daily Quiz
printing money.
finance?
Daily Quiz
4. Define banks.
5. Define banker.
Summary


Mapping
IV No. Outcomes
1 Code of conduct for CO4 High

IV microfinance
2 Transparency CO4 High
03/19/2024 50

• PART II
• Code of conduct for microfinance
• Transparency
• Client protection
PART II
• PART II
• Code of conduct for microfinance institutions
• All Microfinance Institutions are required to follow all regulatory
norms as well as consumer protection practices (specifically,
RBI’s Guidelines on Fair Practices issued for NBFCs) laid down
by the government and the regulators in both letter and spirit.
• The Code of Conduct lays down additional requirements to
enhance and improve sector practices. The code of conduct is to
be followed by all MFIs regardless of their form.
• Application of the code:
• This Code applies to the following activities undertaken by
Microfinance Institutions:
• 1. Providing credit services to clients, individually or in groups.
• 2. Recovery of credit provided to clients
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Number::IV
PART II
• 3. Collection of thrift from clients, where ever applicable.

• 4. Providing insurance and pension services, remittance
services, or any other related products and services.
• 5. Formation of any type of community collectives including
self-help groups, joint liability groups and their federations.
• 6. Business development services including marketing of
products or services made or extended by the eligible clients or
for any other purpose for the welfare and benefit of clients.
PART II
• MFIs must agree to:

• 1. Promote and strengthen the Microfinance movement in the
country by bringing low-income clients to the mainstream
financial sector.
• 2. Build progressive, sustainable, and client-centric systems
and practices to provide a range of financial services
(consistent with regulation) to clients.
• 3. Promote cooperation and coordination among themselves
and other agencies in order to achieve higher operating
standards and avoid unethical competition in order to serve
clients better.
03/19/2024 Number::IV 54
Code of conduct
• Code of conduct
• I Integrity and ethical behaviour
• 1. MFIs must design appropriate policies and operating
guidelines to treat clients and employees with dignity.
• 2. MFIs must incorporate transparent and professional
governance system to ensure that staff and persons acting on
their behalf are oriented and trained to put this Code into
practice.
• 3. MFIs must educate clients on the Code of Conduct and its
implementation
Code of conduct
• II Transparency
• 1. MFIs must disclose all terms and conditions to the client for
all services offered. Disclosure must be made prior to
disbursement in accordance with the Reserve Bank of India’s
(RBI) fair practices code, in any of the following ways:
• a) Individual sanction letter
• b) Loan card
• c) Loan schedule
• d) Passbook
• 2. MFIs must communicate all the terms and conditions for all
products/services offered to clients in the official regional
language or a language understood by them.
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Number::IV
Code of conduct
• 3. At the minimum, the MFI must disclose the following

terms:
• a) Rate of interest on a reducing balance method
• b) Processing fee
c) Any other charges or fees howsoever
described
• d) Total charges recovered for insurance coverage and risks
covered
03/19/2024 Number::IV 57
Code of conduct
• 4. MFIs must communicate in writing, charges levied for all

financial services rendered. Fee on non-credit
products/services will be collected only with prior declaration
to the client.
• 5. MFIs must declare all interest and fees payable as an all-
inclusive Annual Percentage Rate (APR) and equivalent
monthly rate.
• III CLIENT PROTECTION
• A. Fair Practices
• 1. MFIs must ensure that the provision of micro finance
services to eligible clients is as per RBI guidelines.
Code of conduct
• 2. MFIs must obtain copies of relevant documents from

clients, as per standard KYC norms. Additional documents
sought must be reasonable and necessary for completing the
transaction.
• 3. Products should not be bundled. The only exceptions to
bundling may be made with respect to credit life, life
insurance & live-stock insurance products, which are typically
offered bundled with loans.
• The terms of insurance should be transparently conveyed to
the client and must comply with RBI & Insurance Regulatory
and Development Authority (IRDA) norms. Consent of the
client must be taken in all cases.
Daily Quiz
printing money.
finance?
Daily Quiz
4. Define banks.
5. Define banker.
Summary

• PART II
• Code Of Conduct For Microfinance
• Transparency
• Client Protection
• PART II
• Code Of Conduct For Microfinance
• Transparency
• Client Protection
Mapping
IV No. Outcomes
1 Participants in money CO4 High

IV market CO2 Medium
2 Primary market CO4 High
Rights issue CO2 Medium
03/19/2024 64

• Participants in money market
• Measures to improve Indian money market
• Primary market
• Rights issue
B. Avoiding Over-indebtedness
• B. Avoiding Over-indebtedness
• 1. MFIs must conduct proper due diligence as per their
internal credit policy to assess the need and repayment
capacity of client before making a loan and must only make
loans commensurate with the client’s ability to repay.
• 2. If a client has loans from 2 separate lenders, then
irrespective of the source of the loans, a MFI shall not be the
third lender to that client.
• 3. MFIs must not, under any circumstance, breach the total
debt limit for any client, as prescribed by RBI or Central/State
Government(s).
• C. Appropriate interaction and collection practices
• 1. MFIs must have clearly defined guidelines for employee
interactions with clients.
• 2. MFIs must ensure that all Staff and persons acting on behalf
of the MFI
• a) Use courteous language, maintain decorum, and are
respectful of cultural sensitivities during all interaction with
clients.
• b) DO NOT indulge in any behavior that in any manner would
suggest any kind of threat or violence.
• c) DO NOT contact clients at odd hours, as per the RBI
guidelines for loan recovery agents.
• d) DO NOT visit clients at inappropriate occasions such as
bereavement, sickness, etc., to collect dues.
• 3. MFIs must provide a valid receipt (in whatever form

decided by the MFI) for each and every payment received
from the borrower.
• 4. MFIs must have a detailed Board approved process for
dealing with clients, at each stage of default.
• 5. MFIs must not collect shortfalls in collections from
employees and their HR policies must categorically denounce
this practice. An exception can however be made in proven
cases of frauds by employees.
• D. Privacy of client information MFIs must keep personal
client information strictly confidential. Client information may
be disclosed to a third party subject to the following
conditions:
• 4. MFIs will appoint an audit committee of the Board with an

independent director as chairperson.
• 5. MFIs must ensure transparency in the maintenance of books
of accounts and reporting/ presentation and disclosure of
financial statements by qualified auditor/s.
• 6. MFIs must put in best efforts to follow the Audit and
Assurance Standards issued by the Institute of Chartered
Accountants of India (ICAI).
• 7. MFIs must place before the Board of Directors, a
compliance report indicating the extent of compliance with
this Code of Conduct, specifically indicating any deviations
and reasons therefore, at the end of every financial year.
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Digital technology has opened avenues for MSME
to create an impact
• Digital technology has opened avenues for MSME to create
an impact
• Changing customer behaviour, technology and competition
have transformed the landscape in which entrepreneurs
operate. Hence, it is essential for entrepreneurs to continuously
focus on improving their operations and building scalable and
sustainable businesses.
• At a time when several companies and sectors are feeling a
threat of digital economy, small and medium scale enterprises
are set to ride on the technology and see a spurt in their growth
according to a report by CII and KPMG.
Credit Guarantee Fund Trust for Micro and Small
Enterprises (CGTMSE)
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is jointly set up by Ministry of Micro, Small & Medium
Enterprises (MSME), Government of India and Small Industries Development Bank of India (SIDBI) to catalyse flow of institutional
credit to Micro & Small Enterprises (MSEs). Credit Guarantee Scheme (CGS) was launched to strengthen credit delivery system and
to facilitate flow of credit to the MSE sector, create access to finance for unserved, under-served and underprivileged, making
availability of finance from conventional lenders to new generation entrepreneurs. Over the past 22 years, CGTMSE has been
instrumental in providing guarantee cover to collateral and/or third party guarantee free credit facilities extended by eligible Member
Lending Institution [MLIs] to MSEs.
CGTMSE has created a new landmark by touching the milestone figure of approving guarantees worth `1 lakh crore during FY 2022
- 23. This financial achievement has been an outcome of various key initiative implemented during the financial year.
CGTMSE with its untiring efforts and unflinching commitment to enable the economy to touch the landmark figure USD 5 Tn, as set
out by the Hon’ble Prime Minister, coupled with several key initiatives, has assumed a greater role of the enabler in the financial
eco-system and have fostered an entrepreneurial mindset across the nation.
Taking note of this achievement of CGTMSE, honourable Prime Minister while expressing his happiness, has rightly said, “We are
betting on the entrepreneurial zeal of our youth to propel our economy to even greater heights.” In India’s journey of next economic
superpower, guaranteeing loans worth `1 lakh Crore in a single FY may just be a new beginning for CGTMSE.
03/19/2024 Faculty Name: Iftikhar Baig Subject code an 72
d abbreviation: AMBA FM0313 IFMS Unit
03/19/2024 Faculty Name: Iftikhar Baig Subject code an 73
d abbreviation: AMBA FM0313 IFMS Unit
Video Links
• Youtube/other Video Links

• https://youtu.be/zfmIA05OQ3Y
• https://youtu.be/0IfahmCr3k0
• https://youtu.be/k4vtdkKkyQE
• https://youtu.be/0JyrjSn4RQI
Daily Quiz
1. The Reserve Bank of India was established on _______.
a) April 1, 1935
b) July 12, 1982
c) May 26, 2006
d) September 30, 2005
2. Who works as RBI's agent at places where it has no office
of its own?
a) State Bank of India

b) Ministry of Finance
c) Government of India
d) International Monetary Fund
Daily Quiz
3. Which among the following is incorrect?
a) RBI is the Bank of Issue

b) RBI acts as Banker to the Government
c) RBI is Banker's Bank
d) RBI does not regulate the flow of credit
4. India is a member of the International Monetary Fund
since _____.
a) 1934
b) 1935
c) 1947
d) 1949
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Daily Quiz
5. When did the Reserve Bank of India notify the draft

regulations relating to the Credit Information Companies
(Regulation) Act, 2005?
a) April 5, 2006
b) May 26, 2006
c) June 29, 2007
d) September 30, 2005
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MCQ s
1. Micro credit or micro finance is a novel approach to bank
with the poor. In this approach bank credit is extended to
the poor through
• A. Self Help Groups
• B. Anganwadees
• C. o-operative Credit Societies
• D. RBI
2. Loans to poor people by banks have many limitations
including lack of security and high operating cost. So to
help them which type of finance system developed ?
(a) Ponzi schemes
(b) Micro Finance System
(c) Money Laundering Schemes
(d) Money tampering finance
MCQ s
3. The following statements are related to Micro Finance
System. Locate the wrong option ?
(a) It provides micro credit having scope for small savings and
remittance of funds
(b) It based on the principle of livelihood creation
(C) None
4. Who introduced the concept of Micro Finance in
Bangladesh in the form of the "Grameen Bank"? He is the
Nobel laureate known by many as the "father of micro
finance systems".
(a) C. D. Deshmukh
(b) Amartya Sen
(c) Muhammad Yunus
MCQ s
5. The beneficiaries of Micro finance business are
_____________
(a) Land Less labour
(b) Marginal farmers
(c) Vendors in the small markets
(d) All the above
6. The Micro Finance Institutions (MFI) differ from one
another in terms of
(a) Product offering
(b) Loan repayment Structure
(c) Product offerings
(d) All of these
MCQ s
7. One of the delivery channel for Micro Finance is SHG
model. SHG means ?
(a) Soar Help Group
(b) Sake Help Group
(c) Self Hope Group
(d) Self Help Group
MCQ s
8. In the Not-For-Profit Micro Finance Institutes, which
among the following are included ?
(a) Societies
(b) Public Trusts
(c) Non-Profit Companies
(d) All of these
9. Co-operatives registered under state or National Acts and
MACs come under Mutual benefit MFIs. MACS means ?
(a) Moral-Aided Co-Operative Societies
(b) Mint-Aided Co-Operative Societies
(c) Mutually-Aided Co-Operative Societies
(d) Mutually-Aided Co-Operative Societies
MCQ s
10. Who launched an 'India Micro-finance Platform', a portal
on micro-finance activities across the country, with the
assistance of World bank funds on 28th June 2013 ?
(a) SBI
(b) ICICI
(c) SIDBI
(d) Exim Bank
Weekly Assignment
• Q.1What is micro finance?

• Q.2 Explain the demand analysis.
• Q.3 Throw the light on strategic issues of micro finance.
• Q.4What are the types of micro finance?
Old Question Papers
Old Question Papers
Old Question Papers
Old Question Papers
Old Question Papers
Old Question Papers
• MM: 100
• SECTION A
• Attempt all questions in brief. 2 x 7 = 14
• a. Define Prior Saving Theory.
• b. What do you mean by Financial System?
• c. What is EXIM?
• d. Differentiate between CRR and SLR.
• e.“Money market speeds up the liquidity position of a
company”. Justify.
• f. What are Deep-discount bonds?
• g. What is CASA?
Old Question Papers
• SECTION B
• Attempt any three of the following:7 x 3 = 21
• a. Explain the various types of Financial services.
• b. Explain the various roles performed by RBI for the
development of Indian banking sector.
• c. What are the various intermediaries of Primary capital
market?
• d. Explain the various types of Derivatives with their striking
features.
• e. Explain the structure of Indian banking sector.
Old Question Papers
• SECTION C
• Attempt any one part of the following: 7x1=7
• (a) Explain the Theory of forced savings with suitable
examples.
• (b) Describe the regulation mechanism of Indian Financial
System.
• (a) Explain the impact of monetary policy to accelerate the
growth of Indian
• economy.
• (b) Explain the role of NABARD in the economic and social
development of the country.
Old Question Papers
Attempt any one part of the following: 7 x 1 = 7
• (a) Explain the various powers enjoyed by SEBI as the regulator
of Capital market.
• (b) Describe the various instruments of Money Market.
• (a) What do you mean by GDRs? Explain the issue mechanism of
GDRs.
• (b) What is share? What are the various benefits enjoyed by a
shareholder?
• (a) What are the various products offered by commercial banks to
meet out the credit requirements of customers?
• (b) List out the various technological advancements floated in
payment mechanism of Indian scenario .
Old Question Papers
Attempt any one part of the following: 7 x 1 = 7

• (a) Explain the various powers enjoyed by SEBI as the regulator of
Capital market.
• (b) Describe the various instruments of Money Market.
• (a) What do you mean by GDRs? Explain the issue mechanism of
GDRs.
• (b) What is share? What are the various benefits enjoyed by a
shareholder?
• (a) What are the various products offered by commercial banks to
meet out the credit requirements of customers?
• (b) List out the various technological advancements floated in
payment mechanism of Indian scenario.
Expected Questions for University Exam
1. Can banks replace Microfinance Institutions in Rural Credit?
Justify it.
2. What are the critical variables to consider for a research on
public trust and demand for microfinance services?
3. What are the main challenges with microfinance?
4. What is Micro Finance? Briefly explain the features and
channels of Micro .
5. Enumerate the Poverty Alleviation Programmes adopted by
Government of India?
6. “Lack of capital is the main constraint why microfinance
institutions do not grow into big organizations in the India”.
Discuss the truth of this statement. Do you think
microfinance sector should adequately funded?
Summary

References
References:
03/19/2024 Number::IV 98
References
Thank You
03/19/2024 99
Number::IV

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Noida Institute of Engineering and Technology,

UNIT V: Principles and Practice of Insurance (7 Hours)

IV 1 Micro Finance CO4 High

History of Microfinance in India

FINCA International is a non-profit, microfinance

History of Microfinance in India

• We have covered the following topics in this lecture:

1 Types of Microfinance CO4 High

• Students will be able to know the following concepts:

"This represents a growth of 63 per cent compared to 2017-18.

• We have covered the following topics in this lecture:

1 Challenges in the Indian CO4 High

• Students will be able to know the following concepts:

Challenges in the Indian context

• Ability to innovate, adapt and grow.

• Microfinance for Women in India

• Rural Finance for Rural women

• Part I Core Values Of Microfinance

• We have covered the following topics in this lecture:

• Challenges in the Indian context

1 Code of conduct for CO4 High

• Students will be able to know the following concepts:

• 3. Collection of thrift from clients, where ever applicable.

• MFIs must agree to:

• 3. At the minimum, the MFI must disclose the following

• 4. MFIs must communicate in writing, charges levied for all

• 2. MFIs must obtain copies of relevant documents from

• We have covered the following topics in this lecture:

1 Participants in money CO4 High

• Students will be able to know the following concepts:

• 3. MFIs must provide a valid receipt (in whatever form

• 4. MFIs will appoint an audit committee of the Board with an

• Youtube/other Video Links

a) State Bank of India

a) RBI is the Bank of Issue

5. When did the Reserve Bank of India notify the draft

• Q.1What is micro finance?

Attempt any one part of the following: 7 x 1 = 7

• We have covered the following topics in this lecture:

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