The slides do not contain descriptions because it is a presentation in Pre-submission Seminar for Ph.D and scholar was personally presenting his topic. Slide 24, 25 & 26 are mostly related with Micro Finance.

1. FACULTY OF COMMERCE
BANARAS HINDU UNIVERSITY
VARANASI-221005, U.P., INDIA
Progress and prospects of
Microfinance in Varanasi District -
An Appraisal
Presented by
Jamaluddeen
Research Scholar
Under the Supervision of
Dr. F. B. Singh
Professor
Thesis Submitted for the Award of the Degree of
DOCTOR OF PHILOSOPHY
in
COMMERCE
Enrolment No. 281666 Year : 2013

2. 3. In wider sense, it includes Self Help Group (SHG)
with the above terms
1. The term Microfinance (MF) means-
Provision of financial services as a whole to the poor
2. It offers-
A variety of products and services such as-
I.Micro-Credit (MC),
II.Micro-Savings (MS), and
III.Micro-Insurance (MI)
Introducti
on
Introducti
on

3. Micro
Credit
Micro
Credit
1. MC means-
The small loans provided
To the very poor (lacking mainstream of Financial
Institutions).
 To reduce poverty and improve in living standards.
 To help them keep engaging in productive and
income-generating activities
2. MC is two types-
Micro Grant, and Solidarity Lending

4. Micro
Saving
Micro
Saving
1. MS means-
Collection of small savings in small deposits account
offered to lower income families
or
Individuals as an incentive to store funds for future use.
 Diversified savings like voluntary, purpose
oriented, compulsory, need based, cash and kind.
 Smaller amounts of money in accounts for which Min.
Bal. requirements are often waived-off or very low

5. Micro
Insurance
Micro
Insurance
1. MI is –
Characterized by low premium and low caps or
low coverage limit
and
Sold as part of a typical risk - pooling and
marketing arrangements
 Protection of belongings related with the poor
2. MI is two types-
Wealth Insurance and Safety Insurance
 Designed to service low-income people and Bus.

6. Self Help
Group
Self Help
Group
1. SHG refers to –
Village-based voluntary association of 15 - 20 local
persons
with
The same employment objective
2. SHG Models are two types-
 SPA (Self Help Group Promoting Agency)
 SBL (Self Help Group Bank Linked Programme)

7. Varanas
i
Varanas
i
1. Total area under Varanasi district is about 1,535 square
kilo metre with density of 2,399.
2. There are 8 DBs
and
1,327 Villages.
DB A B Cn Cr H K P S
No. of GP
107 78 84 81 85 87 98 82

8. Varanasi with Boundaries of 5 Neighbour DistrictsMap of Varanasi with 8 Development Blocks
Varanasi
Map
Varanasi
Map

9. Working
Population
Working
Population
Source: Dainik Jagaran (Hindi-Daily), Sep. 22, 2010

10. MFIs. in
Varanasi
MFIs. in
Varanasi
1. There are many active MC Institutions in Varanasi,
like
2. Majority of the poor is served by
SKS Microfinance,
Spandan
Bandhan and
&
Cashpor Micro Credit (CMC),
Utkarsh Microfinance,
Other smaller and not registered

11. 3. Only two Micro Credit Institutions,
1.6 Continue
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1.6 Continue
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&
4. Others operating business from outside
5. Utkarsh Microfinance has 6 branches
4 in Rural Areas
2 in Urban Areas

12. Statement of
Problem
Statement of
Problem
1. Literature does not show MS as an element of MF.
and
Literature also silent for all the four aspects (MC,
MS, MI and SHG) together as elements of MF
3. Are roles played by MFIs satisfactory?
2. What is the advantage (prospects) of MF as –
 Tool of creating employment,
 Tool for Eradication of poverty, and
 Social safety
4. What are the performance of incorp. and Working MFI

13. Objectiv
es
Objectiv
es
 To find out Dimensions and Issues of Microfinance.
 To examine MF as a tool to create employment and
eradicate poverty.
 To analyse performance of Microfinance Intermediaries.
 To examine the progress and prospects of MF in Vns.
 To suggest for the improvement of performance of MF
in Varanasi.

14. Hypothese
s
Hypothese
s
1. Ho1
: There is no significant difference of age for loan
clients of 8 Development Blocks of Varanasi.
2. Ho2
: MC is not helpful for creating employment for
micro creditors of 8 Development Blocks.
3. Ho3
: Compulsory Micro Insurance (CMI) Policy is
accepted willingly by microfinance users in
Varanasi.

15.  Entrepreneurs at every level get opportunity to be
employed and it is also a way to wealth creation
Significance of the
Study
Significance of the
Study
 Discipline to assist weaker, smaller and farmers and
their female members to work and develop themselves
according to their capacity and calibre.
 A tool to create employment & eradicate poverty,
facilitate the poor and the weaker to have a good-deal
among themselves as per prescribed norms.
 It is a wider campaign in which financial intermediaries
and financial institutions play their respective roles.

16. Limitation of
Study
Limitation of
Study
 A few reports have been taken from New Papers
published in Varanasi
 Limited with its scope (area), period and
researcher’s approach.
 Study imbibed information related with MF users and
findings based on inferences drawn from the data
collected though 400 schedules.
 Secondary data has been collected from official
websites of CMC, Utkarsh Microfinance and Official
Website for Census of Varanasi.

17. Research
Design
Research
Design
2. Exploratory: To find out and show the element of MF
and its integration, proportional relation
of elements of MF.
3. Experimental: To test the Hypotheses
1. Descriptive: To describe the facts.

18. 3.1 Scope of the
Study
3.1 Scope of the
Study
• Place: Varanasi District with its 8 DB
• Population (N): N=34,942 (ALC of CMC as on 30.06.2011)
• Sampling Unit: Member of Self Help Group
• Sample Size(n): (N * 1)/100 = 349 ~ 400(50 from each DB)
• S. Technique: Geographical Purposive (Judgement)
• Study Period: (a) 1991 – 2011
(b) 2002 – 2012
(c) 2009 – 2013

19. Data
Sources
Data
Sources
1. Both the sources primary and secondary
Data Collection
2. Primary data collected through structured schedule
and unstructured interview
Detail Met Selected Filled Used
Number of
Schedules
467 429 407 400

20. Data
Processing
Data
Processing
Coding Meaning of
Alphabets
Meaning of
Numbers
A1, A2, A3....A50 A for Arajiline Nos. (1, 2, 3, ...
50) indicate
serial No. for
schedules,
where
1 for first,
2 for second,
3 for third, etc.
respectively
B1, B2, B3...B50 B for Baragaon
Cn1, Cn2, Cn3... C50 Cn for Cholapur
Cr1, Cr2, Cr3, ... Cr50 Cr for Chiraigaon
H1, H2, H3, ... H50 H for Harahua
K1, K2, K3, K50 K for K.Vidyapeeth
P1 ,P2, P3, ... P50 P for Pindra

21. Data
Analysis
Data
Analysis(a) Data Presentation: Pie-charts, Bar-charts, Histograms,
Tables and Percentage
(b) Descriptive Statistics:
Univariate - Mean, Maximum, Minimum, Range,
Standard Deviation, Coefficient of
Standard Deviation and
Coefficient of Variation.
Bivariate - Karl Pearson’s Coefficient of Correlation
(c) Inferential Statistics: Limit fixing (lower and upper)
at 95% and 99% level of
confidence, ℵ2
test, independent t-
test and One-way ANOVA

22. Plan of
Study
Plan of
Study
Part Chapter Description
I
1 Introduction
2 Review of Literature
3 Objective, Scope & Research Methodology
II
4 Microfinance: An Overview
5 Self Help Group
6 Micro Credit
7 Micro Saving
8 Micro Insurance
III 9 Summary of Findings and Suggestions

23. Summary of
Major
Findings
Summary of
Major
Findings
This Part covers –
Major Findings,
Important Issues, and
Conclusion of the study

24. MF and Its
Elements
MF and Its
Elements
MF and Its Elements with Mathematical Function
MC ∈ MF,
AND
MS ∈ MF,
AND
MI ∈ MF,
AND
SHG ∈ MF,
MF= {MC, MS, MI, SHG}

26. Continue
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Continue
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MF, Elements of Mf and its Integration with MF

27. Microfinan
ce
Microfinan
ce
Min. Age Max. Age Mean SD Coef. of SD Coef. of Var.
22 65 41.38 12.46 0.3011 30.11
ANOVA
Sources of
Variance
Sum of
Squares
df (Degree of
Freedom)
Mean
Square F
SSB 229.62 7; (8 – 1), i.e. (k – 1) V2 = 32.802 Greater
Variance
SSW 61712.86 392; (400–8), i.e. (N–k) V1=157.431 Smaller
Variance
Total 61942.48 399; (400–1), i.e. (N–1) = V1/V2 = 4.8
Tabulated Value (F0.05, V1 = 392, V2 = 7) somewhere between (3.27 - 3.23)

28. Continue …Continue …
Education of All Respondents
Education No. of Res. Percentage Classification
Illiterate 140 35.00 Un-educated
Un-formally
Educated
121 30.25 Primary
(83.50)
Class (1-5) 73 18.25
Class (6-8) 38 9.50 Above Primary
(16.50)High School 19 4.75
Intermediate 9 2.25
Total 400 100.00 Percentage = (Value*100)/400

29. Continue …Continue …
Variables RangSelf
Help Group
p (Prob.) SEprop Confidence
Level
Possessing
Phone
1.8881% -
5.6118%
0.0375 0.0095 95%
Possessing
Mobile
73.1417% -
81.3583%
0.7725 0.021 95%
BPL 25,755 -
37,745
0.3175 0.023275 99%

30. Self Help
Group
Self Help
Group
Objectives to Join-in or form the Group
Raising
Loans
Start
Business
Protection Combination
of Two
Objectives
More than
Two
Objectives
24.75% 4.25% 1.5% 50.75% 18.75%
Detail about Group Members
Average No. of
Members
SD Coefficient of
SD
Coefficient of
Variation
19.32 2.576 0.1333 13.33%

31. Continue
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Continue
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Feeling about the Group & Expectation
General 52.25% Support 55.25%
Special 26% Direction 10.25
Synergic 9% Co-operation 8.25
Other Variables
Neighbors 52.25% Want to Change Present
Member
43%
Included from O
(1 – 2) Member
15% Do not want to Change
Present Member
55.75%
Help by Financing 41.25%

32. Micro
Credit
Micro
Credit
Feeling about the Group & Expectation
Sources of Credit MFI
MFI 76.5% CMC 30.75%
Co-
operative
So.
5% SKS
Microfinance
16.25%
Employer 5% Bandhan 13.25%
Bank 6.5% Utkarsh 10%
Sahukar 2.5% Other-MFI 6.25%
Others 4.5% Non-MFI 23.5%

33. Continue
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Continue
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MC is Helpful for Creating Employment
Tabulated Value =
2.167
Confidence Level = 95% d.f. = 7
(ℵ2
= 2.2544)
Sources of Loan & Accumulated Loan Amount ( )
One Source 54% More than 1 S. 46%
Bellow 8,000 15.5% 16,000 – 30,000 35%
8,000 – 16,000 41.75% Above 30,000 7.75%

34. Micro
Saving
Micro
Saving
Daily Saving and Motivating Person for Saving
Daily Saving in ( ) Motivating Person for Saving
0 - 10 13.75% Your Children 15.50%
10 - 25 29.00% Spouse 21.25%
25 - 50 34.50% Friends 6.25%
50 - 100 19.75% Relatives 12.25%
100 - 150 2.50% Others 6.00%
Above 150 0.50% None (Self) 38.75%

35. Continue
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Preference for Investing
Saved Money
Who decide to
Liquidate Your Saving
With Own 37.50% Yourself 44.25%
Bank 22.75% Husband 29.00%
Post-Office 7.75% Child/Children 7.50%
Saving Certifi. 2.75% Father/Mother 4.25%
Chit Fund
19.50%
Father/Mother-
in-law 15.00%
Others
9.75%

36. Micro
Insurance
Micro
Insurance
Compulsory MI Policy is Accepted Unwillingly
Tabulated Value 2.167 Confidence Level = 95% d.f. = 7
ℵ2
= 3.3913
Insured Amount ( )for Compulsory IP
Bellow 8,000 8.75% 16,000 – 30,000 29.25%
8,000 – 16,000 34.25% Above 30,000 8.00%
One – Time Premium Variation in Premium
75% ( ) 28 - 460

37. Continue
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1. The maximum (20.75%) respondents have OP for
(20,000 – 30,000) and minimum (5.25%) respondents
have optional policy for (30,000 – 40,000).
2. Under optional policy, there is more variation in
premium payment as compared to premium paid under
compulsory policy.
3. Average time taken to get insured amount after death
or maturity is 1.496 month or 44 to 45 days for CP
while it is 8.695 months or 260 to 261 days for OP

38. Suggestio
n
Suggestio
n
Microfinance
1. The persons should not be ignored on the ground of
sex, marriage or separation. Although, some additional
or separate norms, if necessary, may be added.
2. Thus, PBL and MF user should be interlinked. So,
there would be no need for collecting separate data for
poor people or people who should be listed in PBL.

39. Self Help Group
Continue
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1. Some persons hesitate to join the group and raise loans.
Such persons should be educated about the norms, practices
of MF and make them frank about the financial condition
and rely on prosperity.
2. Majority SHG members form the groups for raising loans
and treat the group as financial need. SHG members should
be educated about treating with the groups and make relation
in the group as social relation rather financial need. The
members should be also educated about their neighbourhood
relation rather than favouring caste, religion or relative.

40. Continue
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1. Micro Credit providers, generally, show their progress and
performance according to their business needs. They neither
consider region or district as separate unit nor provide data for
further research. Micro Credit provider should not forget that
research is backbone of development.
2. Loan clients do not restrict themselves from Multiple-
lending, Over-borrowing and Ghost-borrowers. In all the
conditions their financial condition becomes worse from bad
and worst from worse. So, they should be educated about their
need & capability to repay for raising loans.
Micro Credit

41. Continue
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Micro Credit
MF user keep their savings with own and do not
prefer to invest, because they are, generally,
illiterate and wants safety and liquidity for their
investments. Thus, there should be simple norms
for opening & maintaining account and option of
withdrawing invested money any time for small
investors

42. Continue
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Continue
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Micro Insurance
1. MI Policy is compulsory for MF users and they are
required to pay one time premium at the time of raising loans
for loan amount and loan repayment period. So, they should
be given option to take insurance policy for more than loan
amount) as well as options for premium payment (one time,
two times, monthly, or every time with instalment)
2. If MF users do not get offer to get insured for more than
loan amount (according to their need) and /or options for
premium payment, they should exercise alternative (choose
optional policy).

43. Further Scope of
Study
Further Scope of
Study
This study conducted to know progress and performance
of microfinance and its users in Varanasi. For the purpose
of study, all the elements of microfinance (i.e. MC, MS,
MI and SHG) included in the schedule with selected
variables. A new study can be undertaken for all the
aspects (variables) related with one element (any one
among MC, MS, MI or SHG of microfinance). In this
way study will fetch a more reliable and accurate result.

44. Continue
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Continue
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IRDA issues a list of MI products. Reviewing the
literature and suitability of terms & conditions of MI product,
a MI product can be recommended for inclusion in the list or
exclusion from the list. Similarly, by conducting survey and
finding out number of the persons, mortality rate of the poor,
their premium paying capacity and requirements, new MI
policy can be formulated applicable in a particular region.

45. Sparing your
Valuable Time
Thank You
For
JAMALUDDEEN