Micro Finance
NABARD
Status of Micro Finance in India
National Bank for Agriculture & Rural Development Meghalaya Regional Office
“WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
NABARD
Micro Finance Approaches
SHG –Bank Linkage - Dominant Model Financing through MFIs - Emerging Model
“WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
NABARD
SHG-Bank Linkage Programme
“WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
NABARD
The Self Help Group (SHG). . What is it ?
A homogeneous group of about 15 to 20 Every member to save a small amount regularly. Pooled savings kept in a savings bank account in SHG’s name transaction costs of both the poor and bank reduced ! SHG to use pooled thrift to give interest bearing loans to members – decisions taken in group meetings Every member learns prioritisation and financial discipline. Their capacities to think and handle larger resources improves! Depending on the SHG’s maturity, bank gives loan to the SHG as a multiple of the pooled savings. Bank loan added to the SHG kitty. Adequate & sustained access to financial services!
“WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
Design features of SHGs
NABARD
Enables exclusion of rich Self-selection Focus on women Saving first and credit later Intra group appraisal systems and prioritization: Credit rationing Shorter repayment terms Market rates of interest Progressive lending
“WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
NABARD and microFinance
NABARD
INFLUENCING POLICY
INVOLVING INSTITUTIONS
ENCOURAGING INNOVATIONS
CREDIT SUPPORT
MOTIVATING PARTNERS
NABARD
TECHNICAL SUPPORT COORDINATION WITH PARTNERS
GROUP FORMATION
TRAINING AND CAPACITY BUILDING
GROUP LINKAGE
“WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
NABARD
SHG-Bank Linkage Models
MODEL-I SHGs formed and financed by Banks – 20% MODEL-II NGOs act
Status of Micro Finance in India
National Bank for Agriculture & Rural Development Meghalaya Regional Office
“WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
NABARD
Micro Finance Approaches
SHG –Bank Linkage - Dominant Model Financing through MFIs - Emerging Model
“WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
NABARD
SHG-Bank Linkage Programme
“WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
NABARD
The Self Help Group (SHG). . What is it ?
A homogeneous group of about 15 to 20 Every member to save a small amount regularly. Pooled savings kept in a savings bank account in SHG’s name transaction costs of both the poor and bank reduced ! SHG to use pooled thrift to give interest bearing loans to members – decisions taken in group meetings Every member learns prioritisation and financial discipline. Their capacities to think and handle larger resources improves! Depending on the SHG’s maturity, bank gives loan to the SHG as a multiple of the pooled savings. Bank loan added to the SHG kitty. Adequate & sustained access to financial services!
“WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
Design features of SHGs
NABARD
Enables exclusion of rich Self-selection Focus on women Saving first and credit later Intra group appraisal systems and prioritization: Credit rationing Shorter repayment terms Market rates of interest Progressive lending
“WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
NABARD and microFinance
NABARD
INFLUENCING POLICY
INVOLVING INSTITUTIONS
ENCOURAGING INNOVATIONS
CREDIT SUPPORT
MOTIVATING PARTNERS
NABARD
TECHNICAL SUPPORT COORDINATION WITH PARTNERS
GROUP FORMATION
TRAINING AND CAPACITY BUILDING
GROUP LINKAGE
“WE MAKE BANKING POSSIBLE WITH THE LAST , THE LOST AND THE LEAST”
NABARD
SHG-Bank Linkage Models
MODEL-I SHGs formed and financed by Banks – 20% MODEL-II NGOs act