This is a project I had made for my school project at Don Bosco School Lilauh. Feel free to use data provided in it.

1. Micro-finance in rural
credit

3. What is
Microfinance?

4. Microfinance is the provision of
financial services to low-income
clients or lending groups including
consumers and the self-employed
who traditionally lack access to
banking and related services.

5. Best example of microfinance:
Nobel prize winner,
Mohammad Yunus
who founded the
Grameen Bank

6. Need for
Microfinance

7. What happens in
India?
 Without banking facilities, the poor farmers go to
money-lenders
who give them loans and exploit them with high interest
rates by
taking advantage of their situation and also their lack of
education.

8. What happens in
India?
 The earning of the farmers is so meager that they don’t
have
any savings and are highly prone to the sudden need of
credit.

9. How microfinance helps:
 Microfinance come useful to poor households as they
cushion them against external shocks like crop failure etc,
and prevent unwanted
incidents of farmer suicides and other activities, by
providing them
with micro-credit at low interest rates.

10. Can you believe it?

11. How microfinance helps:
 Subsidies from donors and government can be
successfully
channelized by micro-finance institutions to the correct
people who
actually need them.

12. How microfinance helps:
 It also helps the poor to develop saving habits by letting
them save
the smallest of amounts that are feasible for them to save.
In this
way, they can use the savings in times of need and would
not need
outside financial assistance.

13. Problems with
the present
system

14. Less Penetration

15. • Unfortunately, microfinance for
some is just a
source of easy money and they
mismanage their
financial affairs and increase over-
indebtedness.
•When the government buys produce from
the
farmers, the corrupt officials charge their
commission
too, thus exploiting the farmers.

16. •Often, the loans are spent in marriage,
dowry and
other activities as there is no forced use
of the money.
•Once again, due to corruption, half the
money
doesn’t reach the right people and is eaten
up in the various stages of the process.

17. Unproductive use of rural credit:

18. •Since women get loans at low rates
people obtain
credit from MFIs for unproductive
purposes through their medium.

19. Can it eradicate
poverty?

20. No, because:
O Credit may be a trigger for
eradicating poverty, but
eradicating poverty requires all
round development.
O It wont trigger growth in a
country like India where there
is poor governance and
insecurity of exploitation.

21. No, because:
O Despite major structural
changes in credit institutions,
the exploitation of the rural
masses in the credit market is
one of the most pervasive and
persistent features.
O Thus, NO……it cannot solve
the problem of mass poverty in

22. Our suggestions
for betterment

23. Our suggestions for
betterment
O Effective steps should be taken
to remove corruption and stop
exploitation of the poor people
by the credit institutions.
O Forced use of credit for only
productive purposes should be
implemented.

25. Our suggestions for
betterment
O Microfinance institutions can
patch up with other institutions
which guides farmers on how
to use their land properly. This
will ensure more repayment of
loans and greater productivity.

26. Data provided by:
 Akash Gain (1)
 Ankit Duggar (12)
 Gurkirat Singh Matharoo (23)
 Pratik Rai (34)
 Vishal Saraf (56)
Powerpoint Presentation by:
 Soham Hazra
(45)

27. Your Questions please!