Comparison between

shg ,ngo’s, banks and

mfi’s

Shashank Mishra(46)
Mohit Khurana(21)
Manas Kanungo(115)
Utpal Patowary
Neha Thakur(80)
 The Self Help Group (SGH)
 SHGs is a small group of rural poor, who have voluntarily come
forward to form a group for improvement of the social and economic
status of the members.

 Homogeneous group of about 15 to 20.

 Every member to save small amounts regularly.

 Every member learns prioritization and financial discipline.

 Condition required for membership for SHG’s

• Members should be between the age group of 21-60 years.
• From one family, only one person can become a member of an SHG.
(More families can join SHGs this way).
• The group normally consists of either only men or only women.
• Members should be homogenous i.e. should have the same social and
financial background.
• Members should be rural poor.

 How SHG works ( practical example)

 Micro Finance Institutions (MFIs)

 MFIs are an extremely heterogeneous group comprising

NBFCs, societies, trusts and cooperatives.
 They are provided financial support from external donors and
apex institutions including the Rashtriya Mahila Kosh (RMK) ,
NABARD etc.
FUNCTION OF MFIs

 The primary function of a microfinance loan is to help alleviate

poverty. Prospective borrowers are given loans to start or
expand a business. Some loans are given so borrowers can
improve their profit margins by purchasing in bulk or buying
equipment for streamlining production. Microfinance institutions
also educate about finances and entrepreneurship, empower
women and connect people from across the globe to help stamp
out poverty.
 Contd….
• Empower Women

• Many microfinance institutions specifically target

women. Studies have shown lending to women,
especially in areas where women are
marginalized, has a positive effect on women's
self-confidence, how women are viewed by the
community and their family and on the community
in general.
 CONTD….
• Encourage Entrepreneurship and Self-
Sufficiency

• Underprivileged people may have potentially

profitable business ideas, but they cannot put
them into action because they lack sufficient
capital for start-up costs. Microcredit loans give
clients just enough money to get their idea off the
ground so they can begin turning a profit.
 BANKS
 Banks are like reservoirs

 They collect the savings of some people and

give them to others who use them
productively. In the process, they earn a
commission, out of which they pay interest to
those who save and deposits fund with them

 A bank is an institution in which those people

who have spare cash deposit it and those
who need funds borrow from it
 NGO
• Non – Governmental
• Non Profit
• Concerned with charitable aims &
objectives as defined by Law.
• There structure can be either:
a) Formal
b) Informal
 DIFFERENCE BETWEEN……
Point of Difference SHG NGO BANKS MFI

Existence 1992 1959 1828 1970

Structure Informal Either formal Formal Formal

or Informal

Funding By By By Public
Members Membershi
fees,
Service
Provision,
Service
Grants
products and Less Wide Wide Less
facilities Scope Scope

Service No such Door step Branch door step

service
 DIFFERENCE BETWEEN……
Point Of SHG NGO Banks MFI
Difference

Activities social- Helping the society, Savings, Microcredit,

advocacy Project management, lending etc Micro
organizatio Public insurance etc
ns and relations,consulting
halfway
services
(e.g., drug
rehabilitati
on centers)

Rules and Trust According to

regulations 2) Society Banking
3) Section-25 Regulation
Company   Act and RBI
 Contd………

Point of SHG NGO Banks MFI

Difference
Members 10-20 Min 7 no Min. 10 Min. 50
Limit upper limit

Apex NABARD Confederatio RBI Micro

Body n of NGOs Finance
OF RURAL Institutions
INDIA Network &
NABARD

Group of Homogenoues Hetrogenous Hetrogenous Hetrogenous

people
धन्यवाद