...AMRITA BUSINESS SCHOOL, BENGALURU | MICROFINANCE INSTITUTIONS | MARKET RESEARCH PROJECT | | | Contents LIST OF TABLES 2 INTRODUCTION 2 WHY MICROFINANCE? 3 MICRO FINANCE SERVICE PROVIDERS 4 THE EMERGENCE OF PRIVATE MICROFINANCE INDUSTRY 4 MICRO FINANCE IS ALL AROUND US 5 LITRETURE REVIEW 6 SUMMARY OF Y. H. MALEGAM COMMITTEE REPORT 2011 14 Why Malegam Committee Report was Set up? 15 Key recommendation 16 PROFIT AND NON PROFIT ORGANIZATION 21 Differences between for-profit MFI’s and non-profit MFI’s 23 For Profit MFI 23 Non Profit MFI 24 METHODOLOGY 25 CAPITAL STRUCTURE AND ASSET ALLOCATION 25 DEPTH AND BREADTH OF OUTREACH 27 EFFICIENCY 28 PRODUCTIVITY 29 QUALITY OF THE PORTFOLIO 31 ANALYSIS OF NUMBER OF ACTIVE BORROWERS 33 PROFITABILITY AND SUSTAINABILITY 35 CONCLUSION 36 REFERENCES 36 LIST OF TABLES Table 1 Table of Comparision 12 Table 2 Comparison of Debt Equity Ratio 25 Table 3 Debt Equity Ratio 26 Table 4 Comparison of Depth and Breadth of MFIs for the year 2012 with 2010 27 Table 5 Comparison of Depth and Breadth of MFIs for the year 2011 with 2010 27 Table 6 Operating Expense / Loan Portfolio 28 Table 7 Industry Standard for Operating Expense / Loan Portfolio 29 Table 8 Productivity of MFI’s for the year 2010 29 Table 9 Productivity of MFI’s for the year 2011 30 Table 10 Industry standards for year 2010 30 Table 11 Quality of portfolio for the year 2010 31 Table...
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...Microfinance From Wikipedia, the free encyclopedia Jump to: navigation, search This article may be too technical for most readers to understand. Please help improve this article to make it understandable to non-experts, without removing the technical details. The talk page may contain suggestions. (January 2010) Community-based savings bank in Cambodia. There are a rich variety of financial institutions which serve the poor. Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services. More broadly, it is a movement whose object is "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers."[1] Those who promote microfinance generally believe that such access will help poor people out of poverty. Microfinance is a broad category of services, which includes microcredit. Microcredit is provision of credit services to poor clients. Although microcredit is one of the aspects of microfinance, conflation of the two terms is endemic in public discourse. Critics often attack microcredit while referring to it indiscriminately as either 'microcredit' or 'microfinance'. Due to the broad range of microfinance services, it is difficult to assess impact, and very few...
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...A PROJECT ON MICRO FINANCE MANAGEMENT AND ITS ANALYSIS IN INDIA BANKING MANAGEMENT CONTENTS PAGE NO. 1. ABSTRACT 3 2. OBJECTIVE 3 3. METHODOLOGY 3 4. INTRODUCTION 4 5. EMERGENCE OF MICRO FINANCE 5 6. CLIENTS OF MICRO FINANCE 6 7. MICRO FINANCE NEED IN INDIA 6 8. MICRO FINANCING REGULATIONS IN INDIA 7 9. ACTIVITIES IN MICRO FINANCE 8 10. LEGAL REGULATIONS 9 11. GOVERNMENT ‘S ROLE IN SUPPORTING MICRO FINANCE 12 12. MICRO FINANCE SUPPORTING WOMEN 13 13. MICRO FINANCE MODELS 14 14. SUCCESS OF MICRO FINANCE IN INDIA ...
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...Microfinance Industry in India Lok Capital March 2010 Microfinance Industry in India 2 March 2010 EXECUTIVE SUMMARY • The microfinance sector in India has developed a successful and sustainable business model which has been able to overcome challenges traditionally faced by the financial services sector in servicing the low income population by catering to its specific needs, capacities and leveraging preexisting community support networks. As of March 2009, microfinance institutions (“MFIs”) in India reached over 22 million borrowers and had a portfolio outstanding in excess of $2.3 billion. The microfinance business model in India typically generates a Return on Equity (“ROE”) of between 20% and 30%, driven by financing from commercial banks, strong operating efficiency and high portfolio quality.1 Despite achieving rapid growth with a CAGR of 86% in loan portfolio outstanding and 96% in borrowers over the last five years, the microfinance sector still faces a large unmet demand which means that it still has great potential for continued growth. The microfinance sector is maturing and beginning to diversify its product and service base to address other unmet financial and non-financial needs of the low income population either directly or by acting as a conduit for third-party providers – savings, insurance, remittance and low cost education and healthcare services being some of the key examples. Given this growth and maturity dynamic, the Indian...
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...State of Microfinance in Bangladesh Prepared for Institute of Microfinance (InM) As part of the project on State of Microfinance in SAARC Countries By Dewan A. H. Alamgir 2009 Disclaimer Any opinions expressed and policy suggestions proposed in the document are the author’s own and do not necessarily reflect the views of Institute of Microfinance (InM). The report also does not represent the official stand of the Government of the countries studied. 2 | State of Microfinance in Bangladesh List of Acronyms ADB ASA BBS BDT BEES BIDS BKB BMDA BRAC BRDB BSBL CARB CBO CBN CDF CFPR CIDA COSOP CPD DANIDA DFID DOL DOF EC FSP FSS FY GB GDP GOB HCP HIES IBBL IFAD IGA IGVGD InM JC LGED ME MFMSP Asian Development Bank Bangladeshi NGO (formerly Association for Social Advancement) Bangladesh Bureau of Statistics Bangladesh Taka Bangladesh Extension Education Services Bangladesh Institute of Development Studies Bangladesh Krishi Bank Barind Multi-Purpose Development Authority Building Resources Across Communities (Largest NGO) [Formerly Bangladesh Rural Advancement Committee] Bangladesh Rural Development Board Bangladesh Sanchya Bank Limited Center for Agricultural Research-Barind (a Bangladeshi MFI) Community Based Organization Cost-of-basic-needs Credit and Development Forum Challenging the Frontiers of Poverty Reduction Programme Canadian International Development Agency Country Strategic Opportunities Paper (of IFAD) Centre for Policy Dialogue Danish International...
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...Urban Microfinance 9 5. Financial Inclusion in India 11 6. Microfinance as an Anti-Poverty Vaccine 15 7. Transformation of Microfinance in India 19 8. Scaling up Microfinance 22 9. Microfinance in India - A Tool For Poverty Reduction 26 10. SWOT Analysis of Microfinance 29 11. Delivery Models of Microfinance 32 12. Interest Rates in MFIs and prevailing trends 36 13. Scope of further study 42 14. Conclusion 44 15. Bibliography 46 OBJECTIVE OF THIS PROJECT WORK This project work tries to outline the prevailing condition of the Microfinance in India in the light of its emergence till now. Microfinance refers to small savings, credit and insurance services extended to socially and economically disadvantaged segments of society. It is emerging as a powerful tool for poverty alleviation in India. The prospect of Micro-Finance is dominated by SHGs (Self Help Groups) - Banks linkage Program. Its main aim is to provide a cost effective mechanism for providing financial services to the poor. To understand the transformation experiences better, the issues that trigger transformation were identified viz.: size, diversity of services, financial sustainability and focus. It is argued that the transformation experiences in India are not large in number. However, I found that there are three forms of organizations that seem to be popular in the microfinance sector...
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...This is with this sentence that Grameen Koota’s managers synthetized the model of their microfinance organisation. Indeed, they argued right from the beginning that Grameen Koota was strictly following the Grameen methodology, as it had been conceived in its early days. Grameen Koota was then born to deliver, in a cost-effective and sustainable manner, affordable credit to the poor in Bangalore, making it possible for them to borrow money without being required any documentation, collaterals and transaction history. The purpose of this report will be to analyse how Grameen Koota institution integrates in the Indian framework of microfinance and financial inclusion. One knows the microfinance context in India has soon been dominated by Self-Help-Groups. Usually formed by 20 members, they work as a micro-bank which collect members’ savings and grant them loans. Many cultural and operational differences can be observed with the Grameen model where groups are ruled quite strictly by a MFO: savings are compulsory, loans are granted according to an inflexible logic and reimbursement are highly scheduled. Even though the Grameen classic model has seen the necessity to adapt itself – with the Grameen II model in 2001 – and in spite of India SHGs tradition, to what extent Grameen Koota strictly replicates the original Bengali Grameen model? Have the organization been inspired by Indian microfinance legacy? Is Grameen Koota model replicable? Grameen Koota background: a book, a teacher...
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...institutions and markets. It includes institutional, product and process innovation. Why do we need financial Innovation? Finance is the lifeblood of the world economy that affects every other sector and in turn is affected by every other sector. A Simple Financial Innovation like a debit card can lift millions of people out of poverty and connect them to the global economy. It helps entrepreneurs raise money for the next idea. In the coming few pages I shall attempt to discuss few financial innovation and how they have affected the global economy. Microfinance Microfinance is a source of financial services for entrepreneurs and small businesses lacking access to banking and related services. Microfinance is a broad category of services, which includes microcredit. Microcredit is provision of credit services to poor clients. Microcredit has enjoyed spectacular success in poor nations like Grameen Bank in Bangladesh and SKS Microfinance in India. What is Microcredit? Much of the current interest in microcredit stems from the Microcredit Summit (2-4 February 1997), and the activities that went into organizing the event. The definition of microcredit that was adopted there was: Microcredit programmers extend small loans to very poor people for self-employment projects that generate income, allowing them to care for themselves and their families. Definitions differ, of course, from country to country. Some of the defining criteria used include- size – loans are micro, or very...
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...enforcement issues. 21 Government policy 21 Why Do Small, Rural Borrowers Find Rural Banks Unattractive? 26 Absence of flexible products and services 26 Transactions costs 26 Collateral 27 IV. RECENT EFFORTS IN INDIA TO IMPROVE RURAL ACCESS TO FINANCE: THE ROLE OF FORMAL—INFORMAL LINKAGES AND NEW PRODUCTS 28 SHG-bank Linkage Approach: Linking Commercial Banks to Grassroots Borrowers 28 How Effective Has SHG Bank Linkage Been in Targeting the Poor? 30 Impact on vulnerability of poor households 32 Some Lessons from SHG Bank Linkage 33 Key concerns: Limited outreach and scale of lending and issues in financial sustainability 34 Microfinance Institutions (MFIs) 35 What has constrained the outreach and scale of MFIs? 36 The “Service Provider” Model of Microfinance Piloted by Private Banks 37 The Kisan Credit Card 39 Recent Innovations in Micro- and...
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...Term paper On Microcredit ECO -242 Principles of Macroeconomics Prepared for Janifar Alam Lecturer School of business Prepared By Group 1 Sec: B Semester: Summer-2013 31th July 2013 To Janifar Alam Lecturer School of business University of Information Technology and Science (UITS) Subject: Submitted the Term paper of ECO-242 Dear Madam It is indeed a great pleasure for us to be able to hand over the result of our hardship of the group Term paper on Microcredit.This report is the result of the knowledge. This has been acquired from the respective course. We tried our level best for preparing this report. The information of this report is mainly based on our knowledge and Internet information. We fervently hope that you will find this plan worth reading. Please feel free for any query or clarification that you would like us explain. Hope you will appreciate our hard work and excuse the minor errors. Thanking you for your cooperation. Sincerely Group 1 Name&ID Signetures Rahat a jan 12310577 Jinia Afrin 12410291 Abdia Sultana 12310290 Jahidul Islam 12310377 Obaidur Rahman 123210572 Acknowledgement First of all we want to give thanks to almighty Allah for giving us the opportunity to complete...
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...has become a popular strategy for alleviating poverty and stimulating economic development (Khandker, 2005). For example, the worldwide proliferation of microfinance institutions is based on the assumption that providing individuals with better access to financial capital will fuel entrepreneurship and microenterprises, providing opportunities for people to work their way out of poverty. The results of such efforts, however, have been mixed (Snow & Buss, 2001), in part, because not all microfinance borrowers have the entrepreneurial skills sufficient to make a microenterprise succeed (Karnani, 2007a). Cross culturally, successful entrepreneurs have been shown to possess a different set of knowledge structures, or mental schema, than non-entrepreneurs (Mitchell, Smith, Seawright, & Morse, 2000). Interestingly, franchisees—often considered to be entrepreneurs (e.g., Baucus, Baucus, & Human 1996; Grunhagen & Mettelstadedt, 2005)—have been found to have entrepreneurship-related knowledge structures more closely resembling non-entrepreneurs than entrepreneurs, implying that the franchise business model may in many ways compensate for a franchisees’ lack of entrepreneurial skills. Applied to a development context, franchising can be employed as a social innovation—compensating for some of the shortcomings of traditional microfinance strategies that often assume a minimum level of entrepreneurial ability in their borrowers. The purpose of this paper...
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...7 1.4 Objectives 7 1.5 Hypothesis 7 2.0 Literature Review 8 2.1 Kenya's Horticultural Sector at a Glance 9 2.1.1 Horticultural Leading Products 10 2.1.2 Top Importers 10 2.1.3 Private Sector Drive 10 2.2 Kenyan Contract Farming At a Glance 11 2.2.1 Definition of Contract Farming 11 2.2.2 Contract Groups 12 2.3 Supply of Microfinance 14 2.4 Types of Enterprises Engaged In By Microfinance Clients 15 2.5 Effect of Microfinance Services on Agribusiness-Oriented Small Scale Enterprises 15 3.0 Methodology 16 3.1 Area of Study 16 3.2 The Sample 16 3.3 Data Collection 16 3.4 Demographic Details for both Study Areas 17 3.5 Data Analysis 18 4.0 Work Schedule 19 5.0 Budget 20 6.0 References 21 7.0 Appendices 23 7.1 Appendix 1: Preliminary Data Analysis: Interview Questions 23 7.2 Appendix 2: Thematic Data Analysis 24 Abstract Micro-financing refers to the provision of financial services to individuals and groups which are not included in the formal financial systems based not only on assets and security but also other demographic, cultural, social, and gender constraints (Sindi, 2008). Microfinance institutions are those informal financial systems offering such services. Studies on Agribusiness Oriented Small Scale Enterprises in Kenya have reported that access to formal finance; supply inputs; and marketing quandaries are the three principal limitations which hamper agricultural growth and development in the country. A recent research...
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...Microfinance in Assam: Hymns, Myths and Realities. Dr. Jyotish Bordoloi, Associate Professor, Haflong Govt. College. Ms. Brahnisikha Bordoloi,Assistant Professor, Lakhimpur Commerce College. Introduction: Microfinance has emerged as an effective method to fulfil the financial needs of small borrowers and poor sections of the society to uplift their economic conditions. In spite of creditable expansion of institutional credit network in our country majority of poor and rural population remained scarce in getting financial assistance from formal credit delivery institutions. Many credit intervention programmes floated by the government are found to be expensive, ineffective and defective. Indian experience revealed that steps taken to address the poor and poverty have not been yielding the desired result and considerable portion of aids and subsidies meant for the poor are channelized to affluent sections. Institutional mechanism involved in financing the poor through different developmental schemes unsuccessful in doing much to improve the situation and in fact many new problems arise in course of doing so. Poor recovery and siphoning of funds meant for poor have affected not only the viability of developmental schemes but also the profitability of the institutions. The shortcomings and failures of financial institutions and poverty alleviation and development programmes to meet the needs of needy small and poor borrowers kindle the micro finance concept. The...
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...own capacities. empowerment of women, also called gender empowerment, has become a significant topic of discussion in regards to development and economics. Entire nations, businesses, communities, and groups can benefit from the implementation of programs and policies that adopt the notion of women empowerment.[1] Empowerment is one of the main procedural concerns when addressing human rights and development Microcredit: Is the extension of very small loans (microloans) to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the...
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...The Mifos is management information system (MIS) which is accessible as web-based management for microfinance institutions. Effectively, Mifos “Micro Finance Open Source” provides resource for businesses both nationally and internationally. The system is designed for users assuming they are familiarized with the microfinance system, which assists the poverty level society to get loans based on their ability to pay them back not just with collateral. Some of the many features of the Mifos, functions are for users to view fees, funds, checklists, holidays, and offices in a business. Users can also record the reports of their business progress. Meeting reports can be recorded also through the Mifos system. The Mifos system was designed to be cost effective for businesses. The Mifos has been referred to as the central station for a globalized community. Businesses use the Mifos system is to provide support for their large group settings, attendance for their company and for training purposes. In addition, it supports savings and the lending portfolios; it provides rules, interest rates and a payment plan. It is user friendly with an easy navigation for users. Mifos streamlines the process for data entry, a continuous workflow system, collects a bulk of information for creating loans and the approvals. It is a speedy process for defining and configuring loans and savings limitations. Mifos is also designed for robust security mechanisms, preventing fraud including role base permissions...
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