Microfinance provides small loans, savings opportunities, and insurance to low-income individuals. It began as a way to provide financial services to the poor so they can become self-sufficient. Microfinance includes products like loans, deposits, insurance, and money transfers for microenterprises, poor and low-income households. While it aims to alleviate poverty, microfinance institutions face challenges like high costs and risk of lending to poor clients who lack collateral, as well as balancing social and financial sustainability.

1. MICRO FINANCE PRESENTED BY R.KUMARAVENKATESAN ADVOCATE PATENTS DEPARTMENT ALTACIT GLOBAL PRESENTATION

2. FINANCE A branch of economics concerned with resource allocation , resource management , as well as acquisition and investment . Deals with matters related to money and the markets . The management of money, banking, investments, and credit classified ob the basis of quantum, period, field, beneficiaries, rural/urban etc. INTRODUCTION

3. Microfinance providers are “banks for poor”. A type of banking service different from the traditional banking system the goal: to give low income people an opportunity to become self-sufficient by providing a means of saving money, borrowing money and insurance. Loans provided to unemployed or low-income individuals or groups who would otherwise have no other means of gaining financial services MICROFINANCE

4. MICROFINANCE Includes, deposits, loans, payment services, money transfers and insurance, products, savings and credit services Types: Urban microfinance and rural microfinance Beneficiaries: microenterprises, poor, women, low-income households Act: The micro finance institutions (development and regulation) bill, 2011-

5. CORE PRINCIPLES FOR MICROFINANCE The poor needs access to financial services The poor has the capability to repay loans and generate savings an effective tool for poverty alleviation to provide financial services to an increasing number of disadvantaged people greater reach and sustainable development

6. to raise their income levels and improve their living standards. women, to start or expand very small, self-sufficient businesses. tool to fight against poverty, The transparency of financial activities CORE PRINCIPLES FOR MICROFINANCE

7. On the basis of legal status Formal Microfinance Institutions – rural/village banks, commercial banks, telecom firms, and cooperatives Semi-formal Microfinance Institutions – nongovernmental organizations providing micro-sized loans Informal Microfinance Sources – money lenders and shopkeepers MICROFINANCE INSTITUTIONS

8. risk of lending to the poor (the loan may be misused easily) high costs involved in small loan transactions lack of awareness about sources the poor’s inability to offer marketable collateral for loans difficulty in measuring the social performance of MFIs PROBLEMS FACED BY MICROFINANCE

9. Continued….. mixing of charity with business by microfinance providers high interest rates of loans made to the poor lack of customized microfinance models for the poor inappropriate targeting of poor lack of microfinance training for MFIs poor distribution system to spread out loan facilities into rural areas dual mission of MFIs to be financially sustainable as well as development oriented PROBLEMS FACED BY MICROFINANCE

10. increased self-employment opportunities especially for women (Women are granted 75% of microcredits) micro entrepreneurs development : Small shopkeepers, peddlers, craftsmen or farmers. acquired the know-how to generate a regular income. ADVANTAGES

11. started in the early 1980s with self-help groups Small Industries Development Bank of India (SIDBI) National Bank for Agriculture and Rural Development (NABARD) Grameen Financial Services Pvt Ltd, Share Microfin Limited, Shri Kshetra Dharmasthala Rural Development Project, Grama Vidiyal Micro Finance Pvt Ltd,SKS Microfinance Ltd MICROFINANCE IN INDIA

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