This presentation discusses microfinance in India. Microfinance provides financial services like savings, insurance, and credit to poor and low-income individuals. Mohammed Yunus pioneered microfinance through the Grameen Bank in Bangladesh. In India, microfinance is delivered mainly through self-help groups linked to banks and microfinance institutions. Some of the largest microfinance institutions in India are SKS Microfinance, Bandhan Financial Services, and Janalakshmi Financial Services. Microfinance in India reaches over 100 million homes and accounts for over 7% of the global microfinance portfolio.

1. A Presentation on Microfinance
Prepared by :-
Akshay Sikarwar
Srishti Gaur
GLA University, Mathura

2. CONCEPT OF MICRO - FINANCE
Microfinance is defined as
 “Financial Services (savings, insurance, fund, credit etc.)
provided to poor and low income clients so as to help them raise
their income, thereby improving their standard of living”
 Mohammed Yunus was awarded the Noble Prize for application of
the concept of microfinance, with setting up of the Grameen Bank
in Bangladesh.

3. FEATURES OF MICROFINANCE
1) It is an essential part of rural finance.
2) It deals in small loans.
3) It basically caters to the poor households.
4) It is one of the most effective and warranted Poverty
Alleviation Strategies.
5) It supports women participation in economic activities.

4. 6) It provides an incentive to grab the self employment
opportunities.
7) It is more service-oriented and less profit oriented.
8) It is meant to assist small entrepreneur and
producers.
9) Poor borrowers are rarely defaulters in repayment of
loans as they are simple and God-fearing.
10) India needs to establish several Microfinance
Institutions.

5. MICROFINANCE
MODELS IN INDIA
Microfinance services are provided mainly by two
models:-
1. Self Help Group - Bank Linkage Program (SBLP)
Model
2. Micro-Finance Institutions Model (MFI).
These both together have about 7 crore clients.

6. What is SHG Bank Linkage
Programme?
SHG-Bank Linkage Programme was
introduced by NABARD in 1992. Under the SBLP,
the following three different models have emerged:
1. Model I: SHGs promoted, guided and financed by banks.
2. Model II: SHGs promoted by NGOs/ Government agencies
and financed by banks.
3. Model III: SHGs promoted by NGOs and financed by banks
using NGOs/formal agencies as financial intermediaries.

7. 2. Micro Finance Institutions (MFls)
MFls include NGOs, trusts, social and economic
entrepreneurs, these lend small sized loans to individuals
or SHGs.
MFIs operate under following models:-
a) Bank Partnership Model
i. MFI As Agent :-
ii. MFI as Holder of Loans:-
b) Banking Facilitators

8. Microfinance Institutions in India
Top Microfinance Institutions:-
SKS Microfinance Ltd.
Bandhan Financial Services Pvt. Ltd.
Janlakshmi Financial Services Ltd.
Fusion Microfinance Pvt Ltd.
Ujjivan Financial Services Ltd.

9. Janalakshmi Financial Services
Chairman : Ramesh Ramanathan
Founded - 2006

10. Two tier structure
1. For-profit operating companies for investors
2. Not-for-profit holding company called
Janalakshmi Social Services

11. Our Investors
 Bellwether Microfinance Fund:
 Tree Line Investment Management Limited:
 Citi Venture Capital International:
 India Financial Inclusion Fund (IFIF)
 Gawa Microfinance Fund
 Morgan Stanley Private Equity Asia
 QRG Enterprises
 Tata Capital Growth Fund

12. SERVICES
Savings
Small loans
Transfers
Insurance

13. Partnered Products
Bajaj Allianz Life Insurance Co. Ltd.
1) Group Term Life Insurance Plan
2) Group Credit Protection Plan
3) Sarve Shakti Suraksha
1. National Pension Scheme - Lite (NPS – Lite)
i. National Pension Scheme
2. DCB Bank - Janajeevan Card
i. Prepaid Cards
3. Goal Based Savings
i. Savings Plan
4. HDFC life Scheme
i. Group Term Life Insurance

16. Facts about Microfinance in India
 The gross loan portfolio of India's microfinance
sector accounts for more than 7 percent of the sector's
worldwide loan portfolio size.
 As much as 30 per cent of the world's microfinance
borrowers are in India.
 India is the largest microfinance market in the world,
with some 120 million homes with no access to
financial services.

17.  The microfinance market has grown at an average
annual rate of nearly 80 percent over the last three
years.
 There are more than 3,000 MFIs and NGO-MFIs, of
which about 400 have active lending programmes,
according to CRISIL Research.
 The top 10 MFIs account for nearly three-fourths of
loans outstanding.