Micro financing & Micro Borrowers

8/14/2019 Micro financing & Micro Borrowers

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MICRO FINANCING&MICRO BORROWERS

By Group 1


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ySecond fastest developingnation .. HDI rank at 134 in 2009

BPL rank at 89 in 2009

25% of population below BPL

75% of population survives on lessthan 1 $ / day


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oBusinesses involved inremoving poverty Microfinance Institutions (MFIs) Self Help Groups (SHG) SME GOV of INDIA

is there still any gap ..What happens to poorest of poor

Shankar Datta, it is not enough to give the poormoney

then what else should have to be

done.


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EQUIP MICRO BORROWERSWITH KNOWLEDGE.

Is this really being


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Gov of India initiatives

CAPART

NREGA

PMGSY

Bharat Nirman - these schemes objective is to have a

rural development..

..not only in monetary terms, but something beyond

it


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CAPART- Council for Advancementof Peoples Action and RuralTechnology It was established in1986

12,000 voluntary organizations and 9 regional committeesacross country

Up to Rs 25 lakhs can be sanctioned to each organization

Up to 1998, has sanctioned 18126 projects of Rs. "2"95.20crore. Against this, an amount of Rs. 363.8"2" crore hasbeen releasedSCHEMES

Public cooperation Organization of beneficiaries

Information TechnologyDivision

Watershed development

Disability Action Division Rural Technology Division

Young Professional Scheme Marketing Division


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CAPART

Regional Centre No of Projects Amount Sanctionedin Rs Lakhs

Ahmedabad 31 146

Bhubaneswar 77 351

Chandigarh 82 439

Dharwad 86 570Guwahati 101 375

Hyderabad 229 484

Jaipur 44 118

Lucknow 80 539

Patna 92 282


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NREGA- National RuralEmployment Guarantee Act Established in 2005

Wages of Rs.100/ day and employment not less than 100days per year

Rs.30,000 crore is the budgeted expenditure for 2009

Proportion of money from Disinvestment of PSU has beenplanned to spent on NREGA

Employment provided tohouseholds

3.57 crore

Person days in crores

Total 154.04

Women 78.01

Total no of works taken up 28.44 lakhs

Works completed 9.09 lakhs

Work in progress 19.35 lakhs


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PMGSY- Pratan Mantri Gram

Sadak Yojana

The primary objective is to provide Connectivity

368,000 km of new road construction

370,000 km of up gradation/renewal

At a cost of about $26 billion

PHASES POPULATIONCRITERIA

1 1000

2 500

3 250

No of Road WorksCleared

95124

New connectivity 63466

Up gradation 31655Completed 62942

Progress 31831


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Bharat Nirman

Rural infrastructure 2005 -2009 with total investment ofRs.1,74,000 crore

ELECTRICITY: for remaining 1,25,000 villages A.P, Gujarat, Goa, Haryana , Maharastra, Kerala,

Nagaland, Punjab,

Tamil nadu are 100% electrifiedROADS : 1,46,185 Kmsroad length is proposed to be

constructed by 2009 benefitting 66,802 unconnectedeligible habitations in the country

DRINKING WATER : 55,067 uncovered habitations to becovered by 2009.

TELEPHONE :Every village to be connected by telephone: Achieve 40% rural teledensity by 2014HOUSES : 60 lakh houses to be constructed for the rural poor by

2009 New target of 1.2 cr houses by 2014 adopted


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Some aspects of MFIs:

SHG-Bank linkage programme of NABARD - emerged as theprimary model for microfinance services

Rashtriya Mahila Kosh-rewarded with a corpus of Rs 500crore from the present Rs 100 crore

Geographically unevenly distribution

Lack of systems to check the loan-utilization

Primary objective diluted by targeting richer clients toincrease profits

Cannot mobilize large amount of lending funds due to theinappropriate legal and financial structure

Present IRDA guidelines do not permit the convergence oflife and nonlife insurance policies by the same insuranceprovider

Most of the large MFIs are not allowed to accept savings

Venture firms and private equity funds are waiting to enter

the industry


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SHGs

1.Out reach SHG members

Who does not join?

Drop outs2.The social role

Politics

Social harmony

Social justice Community action


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Sustainability & financialaspects

1.Record keeping

2.Equity

3.Default & recoveries

4.Sustainability

5.

6.


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Implications

SHGs for what? SHGs for whom? Improve transparency & record keeping

Realising the social potential How much external credit? Group enterprises

Dealing with defaults & drop-outs Promotion what, how much & for how

long? Bank & national reporting


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SME Scenario

Total no.of SMEs nearly 10.52 million as on3rd All India Census of SSI

Accounts for almost 50% of total output

and 42% of Indias total exports Clusters nearly 636 (industrial)

Total employment is 24.93 million, with perunit employment being 2.37 persons


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growth rate of employment in SSI sector

3.3

4

5.2

4.1

4.84.5

2.6

4 43.6

3.9

0

1

2

3

4

5

6

1992

-199

3

1993

-199

4

1994

-199

5

1995

-199

6

1996

-199

7

1997

-199

8

1998

-199

9

1999

-200

0

2000

-200

1

2001

-200

2

2002

-200

3

growthrate(%)

Series1

: & ,Source Ministry of commerce industries GoI


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SME in poverty reduction

High contribution to domestic production

Significant export earnings

Low investment requirements

Operational flexibility

Low intensive imports

Capacity to develop appropriate indigenous

technology Import substitution


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SME Development

Interest rate cut by SBI SIDBI awarded as Outstanding

Development Project Award for settingup SMERA

Partnership with HP to establish colourprinting solution


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Information Initiatives

1.MYSMEnews: blend of the power oftechnology with existing realities andsocial networks.

Launched in slums of Kolkata with 3,00,000micro entrepreneurs

Delivery models

Personally customized information Closing info gap

Potentially broad reach


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2.Airtel rural service

combination of distribution and service.

Identification and training of

entrepreneurs Consumer queries

3.Spoken web

4.Micro finance Management Institution5.SME Chamber of India


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CONCLUSION

Positive growth in the last two quarters

Limitations like:-

qRegulatory Restricitons

qProblem of Human Resource

qLack of Information

"Doing Good and Doing Well: The

need for balance Bright Future

Micro financing & Micro Borrowers

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