Microfinance refers to financial services targeting low-income clients, particularly women, with loans, savings, insurance and remittances. The study found that only 10% of people have life insurance and less than 1% have non-life insurance. It also found that half of households do not have a formal bank account and most borrow from friends and relatives due to a lack of financial literacy and identification documents. The study concluded that concerted efforts are needed from all sectors to make microfinance more effective and provide an opportunity for economic growth.

2. Presentation
STUDY ON MICRO FINANCE IN THE TRICITY
(Primarily focused on Chandigarh-Panchkula-Mohali region)

3. Microfinance :
Microfinance refers to a variety of financial services that target low-income clients, particularly
women. Microfinance products tend to be for smaller monetary amounts than traditional financial
services. These services include loans, savings, insurance and remittances.
It is widely recognized in economic literature that there are at least five different types of capitals –
1. Physical (roads, buildings, plant and machinery, infrastructure)
2. Natural (land, water, forests, livestock, weather)
3. Human (nutrition, health, education, skills, competencies)
4. Social (kinship groups, associations, trust, norms, institutions)
5. Financial ( cash, access to banks, access to formal sources of credit/Insurance/savings )

5. Review Literature :
NABARD (1995):
SHGs are voluntary associations of people formed to attain collective goals. People who are
homogeneous with respect to social background, heritage, caste or traditional occupations come
together for a common cause to raise income and manage the resources.
Karmarkar K.G. (1999):
Microenterprises face constraints such as the inability to grow due to a lack of resources, inadequate
infrastructure like water, power, markets, insufficient market information, inability to access finance,
the absence of a brand image, lack of standards and standardization, absence of clear cut
government policy.
Bhide and Mehta (2004):
Bhide and Mehta emphasized that education is paramount in enabling an individual to escape
poverty. Thus, investment in education must be accompanied by making available income generating
opportunities.

6. Research Methodology
1. Research Design
Research Design was a conducive mix of Secondary as well as Primary data. Secondary data in the
form of bank documents were analysed as to find out incidence of Micro Finance.
2. Sample Selection
The sampling method adopted is Non Probability Sampling as every person did not had equal
probability of getting selected. The respondents included, Rickshaw Pullers, Road side Artisans,
Vegetable vendors, Contract Farmers, House hold maids.
3. Data Collection
In order to collect the data both Primary and Secondary research was conducted. For Secondary Data
various online websites, journals, research papers and committee reports were referred in order to
conduct proper analysis.

7. 4. Data Analysis
The Primary data in form of Survey was analysed with the help of software, Statistical Package for
Social Services 8 and Microsoft Excel 2010.
5. Instrument Used
Instrument used for the research work was a Schedule. It consisted to 25 questions inclusive of
questions on demographics and crucial investigative questions which provided a comprehensive
aide in achieving the objectives.

8. 1. The proportion of people having some form of life insurance cover stands at 10 % and people with
any form of non-life insurance cover stands at less than 1 %.
2. There are only 3 policies per thousand people in India.
3. Lending to the economically active poor both rural and urban is pegged at around Rs 7,000
crores in the Indian banks’ credit outstanding.
4. According to even the most conservative estimates, the total demand for credit requirements for
this part of Indian society is somewhere around Rs 2,00,000 crores.
5. Microfinance played a significant role in achieving Millennium Development Goals.
Findings :

9. 0
20
40
60
80
100
120
% Indebted HH % Non Indebted % Indebted to formal
sources
% Excluded by formal
sources
NR NER ER CR WR SR UT INDIA NE,E,C
Extent of Exclusion :

10. 6. 2 modes of disbursing credit to low income groups a. Self Help Groups b. MFI
7. North Eastern Region is the most excluded portion in Indian economy.
8. Southern Region is the most included portion in Indian economy.
9. 1/2 house hold is not equipped with a formal bank account.
10. Borrowings from Friends and Relatives is the most common source of credit.
11. Unavailability of Identity Cards , Banks KYC norms , Lack of Financial Literacy , Demographics ,
Male Dominated Society are the underlying factors of low levels of microfinance.
12. Poor face 2 types of risks a. Idiosyncratic (household) b. Covariate (common).

11. Key Learnings :
1. Pattern of credit in hands of low income earners of the society.
2. Demand side factors which are impeding economic growth.
3. Extensive work done my RBI and NABARD in achieving the set targets.
4. In order to mobilise savings ,financial inclusion is a must.
5. Role of women empowerment plays an unparallel role in social and financial upliftment.
6. Microfinance and allied activities are must to increase return on investment and return of
investment for the citizens and the government of India.
7. Citizens of India have a moral and implied responsibility to act as a catalyst for change.

12. Suggestions :
1. Human Development
2. Access to NREGA
3. Infrastructure Support
4. Mobile Banking Services
5. Literacy
6. Financial Literacy
7. Awareness
8. Ease in compliances
9. Supply side policy tweaks
10. Increase small credit volumes to reduce costs

13. Conclusion :
1. A whole-hearted effort is called for from all the corners of the society, viz., banks, beneficiaries
and regulators in order to make Microfinance more meaningful and effective.
2. Banking and Non-Banking Institutions should look at Micro Finance as a business opportunity
and as a social responsibility.
3. Banking on the poor can actually be a rich banking proposition.
4. Financial inclusion and Microfinance is a win-win opportunity for the poor, for the banks and
for the nation.
5. Because of growing incomes, and improving awareness levels, aspirations of the poor are on the
rise.
6. It is for the banks to convert what they see as a dead-weight obligation into an exciting
opportunity and move on aggressively on financial inclusion and Micro Finance and make India
a developed nation.

14. Thank You