1. Microfinance : An issue and futurePRESENTED BY :SUDHIR KUMAR
2. What is MicrofinanceCREDIT SAVINGINSURANCETRAINING
3. Evolution of microfinance in India Microfinance has been in practice for ages through informallyway. Legal framework fro establishing the co-operative movementset up in 1904 . Reserve bank of India Act , 1934 provided the establishmentof the Agriculture Credit Department . Nationalization of banks in 1969 . Regional rural banks created in 1975. Set up of gamin bank in Bangladesh by Muhammad. Yunus in1976. NABARD established as a apex body for rural finance in 1982.
4. Scenario of Microfinance in India India population growth is more than 100 Crore , around 32Crore are living below the poverty . only 20 % access loan from formal sources and 80 % frominformal sources . out of that 20% , only 14% have access to microfinance . During 2011-2012 ,the microfinance through MFI channelhas grown 16.25 % in 2012 in terms of client out reach and13.75% in term of credit portfolio . Customers of microfinance are “ small and marginalfarmers”, “rural artisan and economically weaker sections” .
5. Salient feature of microfinance Borrowers are from the low income group. Loans are of small amount – micro loans. Short duration loans. Loans are offered without collaterals. High frequency of repayment. Loans are generally taken for income generation purpose.
6. Channels of Microfinance1. SHG-Banking linkage programe (SBLP)2. Microfinance institutionsSHGBLPCustomerMFIs
7. Issues of microfinance in India High rate of interest Lending for non productive purposes. Multiple borrowing and lending Ghost loans Coercive practices
8. Malegaon report on MFIs On the recommendation of Malegaon report , RBI put up aregulation on MFIs , by put a cap on lending rate of MFIs at26 % per annum and a margin cap of 12 % over cost of funds,whichever is lower . In order to control overleveraging, RBI laid down rule thatonly two MFIs lend to one borrower and both together cannotprovide loans beyond Rs50,000. For controlling coercive practices , RBI also set up agrievance redressed machinery .
9. Problem face by MFI Financial illiteracy Managerial problems In ability to generate fund . Drop out and migration of Group members .
10. Future Legislation and regulation by RBI to a great extent addressedthe flaws in MFIs in India. It can play a big role in povertyelevation , empowerment and sustainable development.