In India 224 million people living below poverty line with the population of more than 1000 million. Based on the 2015 data, a further 21.9% of Indian population falls below the national Poverty line. India is the largest market for long term sustainability of Microfinance Institutions. The purpose of selection of this topic is to know the impact of microfinance institutions on the Economy and how it is going to change Economy.

2. INTRODUCTION
• In India 224 million people living below poverty line with the
population of more than 1000 million. Based on the 2015 data, a
further 21.9% of Indian population falls below the national Poverty
line.
• India is the largest market for long term sustainability of Microfinance
Institutions.
• The purpose of selection of this topic is to know the impact of
microfinance institutions on the Economy and how it is going to
change Economy.

3. OBJECTIVES OF THE STUDY
1. To know the concept and structure of Microfinance .
2. To study the various microfinance delivery
Methodologies.
3. To know the role of NABARD in SHG linkage
programme.
4. To understand the role and imortance of Microfinance
institutions in poverty reduction.
5. To study the impact of Micro- Finance on economy.

4. WHAT IS MICROFINANCE ?
Brief History
•Mr. Yunus had created separate Bank i.e. Grameen Bank in 1983 in
Bangladesh specially for poor people as he was shocked to see poor
people were borrowing money less than a dollar from money lenders
and being exploited from them.
•Mr. Mohammad Yunus and the Grameen Bank Bangladesh were
awarded the Nobel Prize in the year 2006.
•His innovation is being famous all over the globe. As a result today’s
biggest Microfinance Programme in the world is run in India.

5. MICROFINANCE
• Microfinance Institutions are usually
established to provide small loans & other small
scale financial services to the poor People.
• Microfinance, also called Microcredit, is a type
of banking service that is provided to
unemployed or low-income individuals or
groups who otherwise have no other access to
financial services

6. HOW MICROFINANCE
HELPS TO BREAK THE
POVERTY CYCLE-

7. SOURCES OF FUNDS TO MICROFINANCE
INSTITUTIONS

8. MICROFINANCE SERVICES MODELS
• Self Help Group(SHG) Model
• Grameen Bank Model
• Cooperative Model
• Non Banking Finance Company Model
• For Profit Model

9. NABARD AND SHG –BANK LINKAGE
PROGRAMMES
• NABARD had issued policy guidelines for bank
linkages with SHGs in 1992,
• The model of ‘SHG-BLP’ was evolved as a cost
effective mechanism for providing financial services to
the unreached and underserved poor households.
• It was started as a pilot to link around 500 SHGs of poor
to the formal financial institutions during the year 1992-
93, has now become the largest microfinance programme
in the world, in terms of the client base and outreach.

10. SHG –BANK LINKAGE PROGRAMME MODELS
• Model-I :Bank – SHG – Members
• Model-II :Bank - Facilitating – SHG - Members
• Model-III :Bank – NGO - mFI –SHG - Members

11. ACHIEVEMENTS OF SHG-BANK LINKAGE PROGRAMME 2016-17
Sr.
No
Particulars Achievements
2015-16
Achieveme
nts
2016-17
Achieveme
nts
2017-18
Physical
(No. in lakh)
Financial
(Rs. in
crore)
Physical
(No. in
lakh)
Financial
(Rs. in
crore)
Physical
(No. in
lakh)
Financial
(Rs. in
crore)
1. Total number of
SHGS saving
linked with banks
79.03 13691.39 85.77 16114.23 83.88 16037.08
2 Total number of
SHGs credit
linked during
18.32 37286.90 18.98 38781.16 12.45 21250.12
3 Total number of
SHGs having
loans outstanding
46.73 57119.23 48.48 61581.30 46.61 63138.19
Source-NABARD:https://www.nabard.org/aboutdepartments.aspx?id=5&cid=477

12. GRAPHICAL PRESENTATION
Figure I

13. ANALYSIS AND INTERPRETATION
Figure 1 shows the comparitive study of three years from 2015-16 to 2017-
18 (upto 30th
sept.2017) regarding following data:
• Total number of SHGS saving linked with banks
It is showing growth in 2016-17 but sligtly decrese in 2017-18
• Total number of SHGs credit linked
It shows very slow increase in 2016-17 but decrease in 2017-18
• Total number of SHGs having loans outstanding
Outstanding loan rate is constant slightly showing increase in 201617
but
again decrease in 2017-18

14. THE MICROFINANCE INDUSTRY IS SHOWING A STEADY GROWTH.
COMPARED TO LAST YEAR’S CLIENT BASE OF 371 LAKHS THE
NUMBER OF CLIENTS HAS GONE UP TO 399 LAKHS IN 2016. THE
FOLLOWING CHART REPRESENTS THE JOURNEY OF THE INDUSTRY
SINCE 2001.
Soure :https://indiamicrofinance.com/indian-mfi-rs-64000-
2016-2017.html

15. CONCLUSION
.
• As per the status of Microfinance in India 2016-17 NABARD is
proud to say that the Self Help Group - Bank Linkage Programme,
which is the largest microfinance programme in the world, today
touches 10 crore households through more than 85lakh SHGs with
deposits of Rs.16114 crore and annual loan offtake of Rs.38800
crore and loan outstanding of nearly Rs.61600 crore.
• As per this status surely we can say Microfinance Institutions are
Backbone of the Economy as they are lifting poor people below
poverty line. They are really working as a change agent of
• the Economy by increasing the Income of Poor people which will
ultimately result in Economic Development.

16. THANK YOU