2. WHAT : FI is about the process of ensuring access to
appropriate financial products and services
WHOM : society in general and vulnerable groups such as
weaker sections and low income groups in particular
HOW: at an affordable cost in a fair and transparent
manner by mainstream institutional players
3. There is huge demand for micro-credit. however,
penetration rate is low
Lack of formal outlets of banks + norms too tough ?
Inaccessibility of villages
Poor infrastructure (transport, connectivity power)
Inadequate number of good NGOs: network, weak capacity of
NGOs, low understanding of SHPI staff !
Lack of mature credit culture – tendency to transact in cash only
Traditional practices in vogue : important to know the
sensitivity of local people
4. WWhheerree aarree wwee iinn SSHHGG pprroommoottiioonn
SHG savings coverage
Mapping- March 2011
Sikkim
Arunachal
Pradesh
Assam
Meghalaya
Meghalaya
As on 31 March 2011, NER has
3.24 lakh SHGs ?…0.4% of
country’s share. Credit linkage
very low
About 1.74 lakh SHGs have to be
promoted in the next 3 years if
50% rural households have to be
covered.
Limited potential exists ! Most
states have reached their
saturation point ?
Quality & continuance an issue !
Jammu &
Kashmir
Himachal Pradesh
Uttar
Pradesh
Punjab
Haryana
Rajasthan
Goa
Karnataka
Delhi
Andhra
Pradesh
Orissa
Madhya
Pradesh
Gujarat
Maharashtra
Kerala
Tamil
Nadu
Bihar
West
Bengal
Jharkhand
Sikkim
Assam
Nagaland
Manipur
Tripura Mizoram
Chhattisgarh
Green coverage -
good
17
Red < 50 %
coverage
6
Yellow > 50 - 70 % 2
Brown >70 - 90 % 4
7. SSuuppppllyy IInntteerrvveennttiioonnss
Use of Dept of Post : for channelising Fin services delivery ?
Where land patta is not available, agricultural loans may
be given based on user certificates or letter of comfort
from local bodies.
Village Development Board / Local bodies may act as
guarantors for agricultural loans where there are no land
documents.
Village Development Boards can assist in loan recovery.
JLGs may be promoted to meet the credit demand of
farmers without land documents.
Special thrust for the promotion of SHGs in NER as this
could bring about Financial Inclusion.
8. DDeemmaanndd IInntteerrvveennttiioonnss
Capacity building to improve skills and ability to
undertake enterprises (Micro Enterprise Development
Programme). MEDP /MEPA
Creation of infrastructure/ marketing linkages,
especially through public funds.
Awareness creation to propagate basics of SHG / JLG.
Simplification of processes to enhance demand.
Financial education/ literacy.
Insurance products.
9. Literacy is not necessarily a barrier to learning and education
We can contribute even if we are illiterate (contrary to
normal belief where we see illiteracy as THE barrier to
learning & developing)
Savings: an important financial service need for the poor
Savings : there is a need for enabling it and increasing
opportunity for it
Savings : has the potential to fulfill a part of the lifecycle
needs
Credit options: needs to be minimal
Credit steroids: without the commensurate economic
capacities to repay loans… can lead to crisis.
10. Credit does not work in isolation. It has to be converged.
Traditional Institutions which needs to be leveraged for
sustainable financial inclusion in the Region
Marups in Manipur, VDBs in Nagaland, Xonchois of lower
Assam for expanding financial outreach in the state ?- poor
docs, low relation with banks, high ROI,cash flow funding,
reliance on one person, But find a way ….
Need for link :Traditional Instit. to the Formal Institutions
mFIs and DOP can also serve the cause for FI !
But; high interest rate charged by the MFIs could lead to
reverse resource transfer of the primary assets of the poor to
the rich.