Micro finance and financial inclusion

Presented By :-Shrawan Kumar DwivediNitesh Kumar Narayan

Masarrat Ali Rajnagalwala

OBJECTIVEThe main purpose of the research paper is to

demonstrate the effects of Microfinance as a part of Financial Inclusion in India.

Is Microfinance really a tool to fight against poverty?

Our research paper is totally based on the secondary data available on websites of different financial institution.

Microfinance can be defined as 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.

Financial Inclusion is the delivery of banking services at affordable costs to vast sections of disadvantaged and low income groups.

Microfinance – the key tool of financial inclusion

Microcredit – small loans to the poorMicrofinance savings, insurance, money transfer

services and other financial products targeted at low-income clients

Clients – women; low income; no access to formal financial services

Providers – NGO/MFIs, government programs, commercial banks, development banks.

Funders – development community; foundations; private sector.

FINDINGS

Distribution of Bank Offices in India

Why low income families Likes/Dislikes Banking Services in IndiaLIKES DISLIKESLower Interest

rates,Very little pressure

to repay,Waiving of loans,Enabling schemes

for the farmers.

Time consuming,Bribe officials,Loans subject to

favoritism,No collateral

security,

Illiteracy .

Less constrained spending

Low cost services

Free Use of Money

Easy pathway out of poverty

Good Social, economic

High standard of living

Financial lliteracy Good financial habits

Good education

Macro -environment Personal characteristics

Social/wider inclusion

Financialinclusion

Low or controlled debtAsset ownership

Employment

High Income

‘ABC’ of Financial InclusionAdvice – solving money and debt problems at

low costBanking – increasing the take up of basic

bank accounts and other similar services like those a credit union could provide

Credit – providing affordable loans and other forms of credit

Financial Inclusion – Steps Taken

Co-operative Movement Setting up of State Bank of India Nationalization of banks RRBs Self Help Groups

--- Still We Failed! --- Why?

----becauseo Large Populationo Absence of reach and coverageo Delivery Mechanismo High maintenance costs for accountso Lack of electricity

Major Milestones 1969 : Nationalization of Banks1975 : Establishment of Regional Rural Banks1982 : Establishment of NABARD1992 : Launching of the SHG – Bank Linkage1998 : NABARD sets a goal for linking one million SHGs by 20082000 : Establishment of SIDBI Foundation for Microcredit2005 : One million SHG linkage target achieved 3 years ahead of

date2006 : Committee on Financial Inclusion2007 : Proposed bill on microfinance regulation introduced in

parliament2008 : Number of Kisan Credit cards – 76 million2009 : No.of rural bank branches – 31,727 constituting 39.7% of

total bank branches,2010 : Increased Rs.100 crore each for Financial Inclusion and

Financial Inclusion Technology.

13

CONCLUSION

THANK YOU

15