MICROFINANCE MICROFINANCE

W W MicroIinance is the provision oI Iinancial services to MicroIinance is the provision oI Iinancial services to
low income clients and solidarity lending groups like low income clients and solidarity lending groups like
consumers who are lacking access to banking and consumers who are lacking access to banking and
related services. related services.
W W It is a broad category oI services which includes It is a broad category oI services which includes
micro credit & is the provision oI credit services to micro credit & is the provision oI credit services to
poor clients. poor clients.
ISTORY ISTORY
W W Credit unions and lending cooperatives have been Credit unions and lending cooperatives have been operating operating
around hundreds oI years. around hundreds oI years.
W W TThe pioneering oI modern microIinance is credited to Dr. he pioneering oI modern microIinance is credited to Dr.
Mohammad Yunus, who began experimenting with lending to Mohammad Yunus, who began experimenting with lending to
poor women in the village oI Jobra, Bangladesh during his poor women in the village oI Jobra, Bangladesh during his
tenure as a proIessor oI economics at Chittagong University in tenure as a proIessor oI economics at Chittagong University in
the 1970s. the 1970s.
W W Against the advice oI banks and government, Against the advice oI banks and government, Yunus Yunus carried on carried on
giving out 'micro giving out 'micro- -loans' and in 1983 Iormed the loans' and in 1983 Iormed the Grameen Grameen
Bank Bank and w and woon the Nobel Peace Price in n the Nobel Peace Price in 2006. 2006.
W W Since then, innovation in microIinance has continued and Since then, innovation in microIinance has continued and
providers oI Iinancial services to the poor continue to evolve. providers oI Iinancial services to the poor continue to evolve.
W W Today, the world bank estimates that about 160 million people Today, the world bank estimates that about 160 million people
in developing countries are served by in developing countries are served by microIinance microIinance ..
ADVANATAGES ADVANATAGES
It allows poor to receive loans It allows poor to receive loans- -
MFI allows the poor to get the loans they need to MFI allows the poor to get the loans they need to
save ,invest and create a sustainable liIestyle oI Iinancial save ,invest and create a sustainable liIestyle oI Iinancial
independence and growth. independence and growth.
It creates long term Iinancial interdependence It creates long term Iinancial interdependence
MFI help to create sustained impact by educating MFI help to create sustained impact by educating
recipients on how to create their own businesses and how to recipients on how to create their own businesses and how to
properly manage and grow their money. properly manage and grow their money.
It empowers women It empowers women- -
MFI provide not only women loans ,it helps them MFI provide not only women loans ,it helps them
pull out oI poverty ,but it also promotes gender equality pull out oI poverty ,but it also promotes gender equality
throughout the world. throughout the world.
DISADVANTAGES DISADVANTAGES
To the borrowers To the borrowers
They have to pay high interest rates and little Iund They have to pay high interest rates and little Iund
is available Ior them to borrow. is available Ior them to borrow.
To the bank To the bank
The capital is always small and the borrowers are The capital is always small and the borrowers are
Iew Ior the problem oI reaching out to the people. Iew Ior the problem oI reaching out to the people.
ICROFINANCE INSTITUTIONS IN ICROFINANCE INSTITUTIONS IN
INDIA INDIA
SKS MicroIinance Ltd (SKSMPL) SKS MicroIinance Ltd (SKSMPL)
Spandana Sphoorty Financial Ltd (SSFL) Spandana Sphoorty Financial Ltd (SSFL)
Share MicroIin Limited (SML) Share MicroIin Limited (SML)
Asmitha MicroIin Ltd (AML) Asmitha MicroIin Ltd (AML)
Shri Kshetra Dharmasthala Rural Development Project(SKDRDP) Shri Kshetra Dharmasthala Rural Development Project(SKDRDP)
Bhartiya Samruddhi Finance Limited (BSFL) Bhartiya Samruddhi Finance Limited (BSFL)
Bandhan Society Bandhan Society
Cashpor Micro Credit (CMC) Cashpor Micro Credit (CMC)
Grama Vidiyal Micro Finance Pvt Ltd (GVMFL) Grama Vidiyal Micro Finance Pvt Ltd (GVMFL)
Grameen FinancialServices Pvt Ltd (GFSPL) Grameen FinancialServices Pvt Ltd (GFSPL)
Madura Micro Finance Ltd (MMFL) Madura Micro Finance Ltd (MMFL)
BSS MicroIinance Bangalore Pvt Ltd (BMPL) BSS MicroIinance Bangalore Pvt Ltd (BMPL)
Equitas Micro Finance India P Ltd (Equitas) Equitas Micro Finance India P Ltd (Equitas)
GRAEENBANK GRAEENBANK- -A ROLE ODEL IN A ROLE ODEL IN
ICROFINANCE ICROFINANCE
W W TThere were thousands oI people in rural Bangladesh who had here were thousands oI people in rural Bangladesh who had
improved their living conditions with the help oI the improved their living conditions with the help oI the
microIinance programs oI Grameen Bank, a pioneer in microIinance programs oI Grameen Bank, a pioneer in
microIinance . microIinance .
W W Grameen Grameen Bank helped thousands oI poor Bangladeshi women Bank helped thousands oI poor Bangladeshi women
to improve their lives by extending loans to them to start to improve their lives by extending loans to them to start their their
own enterprises own enterprises. .
W W By 2003, it was reported that between 33 By 2003, it was reported that between 33- -48 oI Grameen 48 oI Grameen
Bank borrowers had moved above the poverty line. By 2003, Bank borrowers had moved above the poverty line. By 2003,
with 1,170 branches across Bangladesh, Grameen Bank was with 1,170 branches across Bangladesh, Grameen Bank was
seen as a role model Ior microIinance all over the world. seen as a role model Ior microIinance all over the world.