A Bout Micro Finance

About Micro Finance

Ha. Friends I would like to share about the Micro Finance .today I was attended the micro finance modules class this session engaged by Mr. Pavan sir taken the class .

Microfinance is a source of financial services for entrepreneurs and small businesses lacking access to banking and related services. The two main mechanisms for the delivery of financial services to such clients are:   relationship-based banking for individual entrepreneurs and small businesses; group-based models, where several entrepreneurs come together to apply for loans and other services as a group. Only 20% access loan from the formal sources and 80% from the informal sources Micro finance .Annual credit demand by the poor is estimated to be about Rs 60,000crores. And only 12,000 cores are disbursed. (April 09)Customers of Micro Finance are “Small and marginal farmers", " rural artisans" and "economically weaker sections“

 Focus on, providing the capital for poor women to use their innate "survival skills" to pull themselves out of poverty. Lend  mostly to women in small groups (credit circles), say of five or seven. Draw up a weekly or bi-weekly repayment schedule .In case any member defaults the entire circle is denied access to credit There is hue and cry on the high rate of interest which is being charged  by many MFI’s. Policymaker concern over high interest rates

Futures of micro finance

Estimated that in next five years, 65% of the poor people will have excess to MFIs. Many Pvt. Banks and Foreign Banks would enter this business segment, because of very low NPAs. Estimated that 5 % of the number of people below the poverty line will get reduced in the next 5 years. World Bank report  I learnt in detail the process of Micro Finance, from its need at the grass root level .Functioning of various Semi Gout& various other delivery channels. Practical learning of how SHGs are formed .Practical learning of how the MFIs works. Most important learning, how it can change the life of the Economic disadvantaged people.