India’s population is more than 1000 million, around 350
million, are living below the poverty.
Only 20% access loan from the formal sources and 80% from
the informal sources.
Out of that 20% only 10% have access to Micro finance.
Annual credit demand by the poor is estimated to be about Rs
60,000 crores. And only 12,000 crores are disbursed. (April 11)
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
In case any member defaults the entire circle is
denied access to credit
• Helped in reducing the poverty.
• Huge networking available.
• Not properly regulated.
• High number of people access to informal sources of finance.
• Concentrating on few people only and mainly in urban areas.
• Huge demand and supply gap.
• Employment Opportunity.
• Huge Untapped Market.
• Opportunity for Pvt. Banks, NBFCs, Foreign Banks to enter this business
• High Competition.
• Neophyte Industry.
• Over involvement of Govt.
Rural India is potentially the largest segment of
the Indian market.
Executives have long recognized that to build
real sales volumes they will have to reach outside
the big cities.
67% of the total sales is contributed by Rural
According to MART
› Rural India buys 46% of all soft drinks sold, 49%
of motorcycles, 59% of cigarettes and 11% of rural
women use lipstick.
According to NCAER
› Rural households form 71.7% of the total
households in the country.
› Spending in this segment is growing rapidly and
consumption patterns are closing in on those of
Rural marketing involves persuading people to try and adopt
products they may not have used before
› Colgate has to build toothpaste by convincing
› Coca-Cola is growing at 37% in rural markets, compared
with 24% in urban areas.
In rural India low penetration rates can be attributed to three
› Low income levels
› inadequate infrastructure facilities
› different lifestyles.
The objectives of Project Shakti
› To create income-generating capabilities for under privileged
In 2001, with rural self-help groups (SHGs) started to educate
rural women, while also making them part of the company's
This micro-enterprise offers low risks and high returns
A typical Shakti distributor sells products worth Rs 10,000-
15,000 a month & earn Rs 700-1,000
The Shakti model was piloted in 50 villages of the Nalgonda
district in Andhra Pradesh.
› Now it has created 26,000 women distributors covering
› By 2010, the goal is to recruit 100,000 Shakti distributors
covering 500,000 of India's more than 600,000 villages.
› Shakti project includes Shakti Vani (or voice), a social
awareness program, and iShakti, a community portal
Increase in income
Education to children
Social Recognition to rural women
Knowledge about health and Hygiene
Knowledge of urban areas
Enhancement of purchasing power
ICICI partnership gave micro credit
ITC's enhanced distribution network came from the
recognition that the existing agri-produce distribution
› The company exports various agricultural products --
soybean, rice and wheat
› In 2000, ITC embarked on an initiative to deploy
technology to reengineer the procurement of soybeans
from rural India
E Choupal’s connectivity - both physical and informational --
between the farmer and the market that it facilitated has
allowed ITC to use it for distribution of goods and services
from the market to the farmer
The E Choupal infrastructure consists of:
› A collaborative network of companies orchestrated by ITC
with a pan-India presence.
In 2004, ITC introduced the Choupal Sagar
› A rural retail outlet at the hub.
› First was set up at Sehore in Madhya Pradesh.
› This is 7,000 sq. ft. mall sells consumer goods as well as
Better content of information
Knowledge to access technology
Indian rural market is huge just to strengthen the
Reliance Infocomm, a mobile services provider. Its
network now encompasses 240,000 towns and
villages, accounting for 42% of the rural population
Godrej Aadhaar -- plans to set up 1,000 stores across
India in the next five years.