Escolar Documentos
Profissional Documentos
Cultura Documentos
Session: 2011-13 Submitted by: Santosh Kumari MBA sem III Submitted to: Mrs.Kaneenika Jain SSISTNT PROFESSOR
PREFACE
The main motive behind this project is to provide the knowledge about MICROFINANCE. In this report I tried to depict the subtle and major aspects of Microfinance in India with respect to current scenario. Sources of collection of information are Internet, Books, journals and Magazines. I have taken assistance from teachers and faculty of SIMCS. This report has been written in a very fair, simple and lucid language.
ACKNOWLEDGEMENT
I am extremely please to express my gratitude to Mr. V. K. Varma (Managing Director,JCCB, head office Vaishali Nagar, Jaipur) for allowing me to undertake summer training as such estimate organization.
The satisfaction and euphoria that accompanied the successful completion of any task would be incomplete without the mention of the people who made it possible, whose constant guidance and encouragement crowned out effort with success. I take this opportunity to express our deep sense of gratitude and respect to our teacher Mrs. Kaneenika Jain Faculty Member for the valuable guidance for providing us with essential facilities for completing and presenting this project. I am greatly indebted to their help, which has been of immense value and has played a major role in bringing this to a successful completion. I would like to thank our family and friends for their constant support and encouragement throughout our project.
Santosh Kumari
Executive Summary
To study the Microfinance in India, microfinance as banking perspective. Understand the concept of Micro finance, need and importation of it. And study the Co-operative Banks their function, major roles and SHGs works. Threw JCCB mainly Customer satisfaction, customer expectation, perception etc
TABLE OF CONTENT
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Particulars
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Recommendations Biblography
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Chapter 1: Introduction
Microfinance is defined as any activity that includes the provision of financial services such as credit, savings, and insurance to low income individuals which fall just above the nationally defined poverty line, and poor individuals which fall below that poverty line, with the goal of creating social value. The creation of social value includes poverty alleviation and the broader impact of improving livelihood opportunities through the provision of capital for micro enterprise, and insurance and savings for risk mitigation and consumption smoothing. A large variety of actors provide microfinance in India, using a range of microfinance delivery methods. Since the ICICI Bank in India, Grameen banks various actors have endeavored to provide access to financial services to the poor in creative ways. Governments also have piloted national programs, NGOs have undertaken the activity of raising donor funds for on-lending, and some banks have partnered with public organizations or made small inroads themselves in providing such services. This has resulted in a rather broad definition of microfinance as any activity that targets poor and low-income individuals for the provision of financial services. The range of activities undertaken in microfinance include group lending, individual lending, the provision of savings and insurance, capacity building, and agricultural business development services. Whatever the form of activity however, the overarching goal that unifies all actors in the provision of microfinance is the creation of social value.
Microfinance Definition
According to International Labor Organization (ILO), Microfinance is an economic development approach that involves providing financial services through institutions to low income clients. In India, Microfinance has been defined by The National Microfinance Taskforce, 1999 as provision of thrift, credit and other financial services and products of very small amounts to the poor in rural, semi-urban or urban areas for enabling them to raise their income levels and improve living standards. "The poor stay poor, not because they are lazy but because they have no access to capital." The dictionary meaning of finance is management of money. The management of money denotes acquiring & using money. Micro Finance is buzzing word, used when financing for micro entrepreneurs. Concept of micro finance is emerged in need of meeting special goal to empower under-privileged class of society, women, and poor, downtrodden by natural reasons or men made; caste, creed, religion or otherwise. The principles of Micro Finance are founded on the philosophy of cooperation and its central values of equality, equity and mutual self-help. At the heart of these principles are the concept of human development and the brotherhood of man expressed through people working together to achieve a better life for themselves and their children. Traditionally micro finance was focused on providing a very standardized credit product. The poor, just like anyone else, (in fact need like thirst) need a diverse range of financial instruments to be able to build assets, stabilize consumption and protect themselves against risks. Thus, we see a broadening of the concept of micro finance--- our current challenge is to find efficient and reliable ways of providing a richer menu of micro finance products. Micro Finance is not merely extending credit, but extending credit to those who require most for their and familys survival. It cannot be measured in term of quantity, but due weightage to quality measurement. How credit availed is used to survive and grow with limited means.
Access to conventional formal financial institutions, for many reasons, is inversely related to income: the poorer you are, the less likely that you have access. On the other hand, the chances are that, the poorer you are, the more expensive or onerous informal financial arrangements. Moreover, informal arrangements may not suitably meet certain financial service needs or may exclude you anyway. Individuals in this excluded and under-served market segment are the clients of micro finance.
As we broaden the notion of the types of services micro finance encompasses, the potential market of micro finance clients also expands. It depends on local conditions and political climate, activeness of cooperatives, SHG & NGOs and support mechanism. For instance, micro credit might have a far more limited market scope than say a more diversified range of financial services, which includes various types of savings products, payment and remittance services, and various insurance products. For example, many very poor farmers may not really wish to borrow, but rather, would like a safer place to save the proceeds from their harvest as these are consumed over several months by the requirements of daily living. Central government in India has established a strong & extensive link between NABARD (National Bank for Agriculture & Rural Development), State Cooperative Bank, District Cooperative Banks, Primary Agriculture & Marketing Societies at national, state, district and village level.
India is said to be the home of one third of the worlds poor; official estimates range from 26 to 50 percent of the more than one billion population.
About 87 percent of the poorest households do not have access to credit. The demand for microcredit has been estimated at up to $30 billion; the supply is less than $2.2 billion combined by all involved in the sector.
Due to the sheer size of the population living in poverty, India is strategically significant in the global efforts to alleviate poverty and to achieve the Millennium Development Goal of halving the worlds poverty by 2015. Microfinance has been present in India in one form or anoth er since the 1970s and is now widely accepted as an effective poverty alleviation strategy. Over the last five years, the microfinance industry has achieved significant growth in part due to the participation of commercial banks. Despite this growth, the poverty situation in India continues to be challenging. Some principles that summarize a century and a half of development practice were encapsulated in 2004 by Consultative Group to Assist the Poor (CGAP) and endorsed by the Group of Eight leaders at the G8 Summit on June 10, 2004: Poor people need not just loans but also savings, insurance and money transfer services. Microfinance must be useful to poor households: helping them raise income, build up assets and/or cushion themselves against external shocks. Microfinance can pay for itself. Subsidies from donors and government are scarce and uncertain, and so to reach large numbers of poor people, microfinance must pay for itself. Microfinance means building permanent local institutions. Microfinance also means integrating the financial needs of poor people into a countrys mainstream financial system. The job of government is to enable financial services, not to provide them. Donor funds should complement private capital, not compete with it. The key bottleneck is the shortage of strong institutions and managers. Donors should focus on capacity building.
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Interest rate ceilings hurt poor people by preventing microfinance institutions from covering their costs, which chokes off the supply of credit. Microfinance institutions should measure and disclose their performance both financially and socially.
Lifecycle Needs: such as weddings, funerals, childbirth, education, homebuilding, widowhood, old age.
Disasters: such as fires, floods, cyclones and man-made events like war or bulldozing of dwellings.
Investment Opportunities: expanding a business, buying land or equipment, improving housing, securing a job (which often requires paying a large bribe), etc.
Poor people find creative and often collaborative ways to meet these needs, primarily through creating and exchanging different forms of non-cash value. Common substitutes for cash vary from country to country but typically include livestock, grains, jewellery and precious metals.
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As Marguerite Robinson describes in The Microfinance Revolution, the 1980s demonstrated that microfinance could provide large-scale outreach profitably, and in the 1990s, microfinance began to develop as an industry. In the 2000s, the microfinance industrys objective is to satisfy the unmet demand on a much larger scale, and to play a role in reducing poverty. While much progress has been made in developing a viable, commercial microfinance sector in the last few decades, several issues remain that need to be addressed before the industry will be able to satisfy massive worldwide demand. The obstacles or challenges to building a sound commercial microfinance industry include: Inappropriate donor subsidies Poor regulation and supervision of deposit-taking MFIs Few MFIs that mobilize savings Limited management capacity in MFIs Institutional inefficiencies Need for more dissemination and adoption of rural, agricultural microfinance methodologies
Role of Microfinance:
The micro credit of microfinance progamme was first initiated in the year 1976 in Bangladesh with promise of providing credit to the poor without collateral , alleviating poverty and unleashing human creativity and endeavor of the poor people. Microfinance impact studies have demonstrated that Microfinance helps poor households meet basic needs and protects them against risks. The use of financial services by low-income households leads to improvements in household economic welfare and enterprise stability and growth. By supporting womens economic participation, microfinance empowers women, thereby promoting gender-equity and improving household well being. The level of impact relates to the length of time clients have had access to financial services.
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Microfinance Today
In the 1970s a paradigm shift started to take place. The failure of subsidized government or donor driven institutions to meet the demand for financial services in developing countries let to several new approaches. Some of the most prominent ones are presented below. Bank Dagan Bali (BDB) was established in September 1970 to serve low income people in Indonesia without any subsidies and is now well -known as the earliest bank to institute commercial microfinance. While this is not true with regard to the achievements made in Europe during the 19th century, it still can be seen as a turning point with an ever increasing impact on the view of politicians and development aid practitioners throughout the world. In 1973 ACCION International, a United States of America (USA) based non governmental organization (NGO) disbursed its first loan in Brazil and in 1974 Professor Muhammad Yunus started what later became known as the Grameen Bank by lending a total of $27 to 42 people in Bangladesh. One year later the Self-Employed Womens Association started to provide loans of about $1.5 to poor women in India. Although the latter examples still were subsidized projects, they used a more business oriented approach and showed the world that poor people can be good credit risks with repayment rates exceeding 95%, even if the interest rate charged is higher than that of traditional banks. Another milestone was the transformation of BRI starting in 1984. Once a loss making institution channeling government subsidized credits to inhabitants of rural Indonesia it is now the largest MFI in the world, being profitable even during the Asian financial crisis of 1997 1998.
In February 1997 more than 2,900 policymakers, microfinance practitioners and representatives of various educational institutions and donor agencies from 137 different countries gathered in Washington D.C. for the first Micro Credit Summit. This was the start of a nine year long campaign to reach 100 million of the world poorest households with credit for self employment by 2005. According to the Microcredit Summit Campaign Report 67,606,080 clients have been reached through 2527 MFIs by the end of 2002, with 41,594,778 of them being amongst the poorest before they took their first loan. Since the campaign started the average annual growth rate in reaching clients has been almost 40 percent. If it has continued at that speed more than 100 million people will have access to microcredit by now and by the end of 2005 the goal of the microcredit summit campaign would be reached. As the president of the World Bank James Wolfensohn has pointed out, providing financial services to 100 million of the poorest households means helping as many as 500 600 million poor people.
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Activities in Microfinance
Micro savings: These are deposit services that allow one to save small amounts of money
for future use. Often without minimum balance requirements, these savings accounts allow households to save in order to meet unexpected expenses and plan for future expenses.
Micro insurance: It is a system by which people, businesses and other organizations make
a payment to share risk. Access to insurance enables entrepreneurs to concentrate more on developing their businesses while mitigating other risks affecting property, health or the ability to work.
Remittances: These are transfer of funds from people in one place to people in another,
usually across borders to family and friends. Compared with other sources of capital that can fluctuate depending on the political or economic climate, remittances are a relatively steady source of funds.
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Microfinance in India
At present lending to the economically active poor both rural and urban is pegged at around Rs 7000 crores in the Indian banks credit outstanding. As against this, according to even the most conservative estimates, the total demand for credit requirements for this part of Indian society is somewhere around Rs 2,00,000 crores.
At the very bottom in terms of income and assets, are those who are landless and engaged in agricultural work on a seasonal basis, and manual labourers in forestry, mining, household industries, construction and transport. This segment requires, first and foremost, consumption credit during those months when they do not get labour work, and for contingencies such as illness. They also need credit for
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acquiring small productive assets, such as livestock, using which they can generate additional income.
The next market segment is small and marginal farmers and rural artisans, weavers and those self-employed in the urban informal sector as hawkers, vendors, and workers in household micro-enterprises. This segment mainly needs credit for working capital, a small part of which also serves consumption needs. This segment also needs term credit for acquiring additional productive assets, such as irrigation pumpsets, borewells and livestock in case of farmers, and equipment (looms, machinery) and worksheds in case of non-farm workers.
The third market segment is of small and medium farmers who have gone in for commercial crops such as surplus paddy and wheat, cotton, groundnut, and others engaged in dairying, poultry, fishery, etc. Among non-farm activities, this segment includes those in villages and slums, engaged in processing or manufacturing activity, running provision stores, repair workshops, tea shops, and various service enterprises. These persons are not always poor, though they live barely above the poverty line and also suffer from inadequate access to formal credit.
Well these are the people who require money and with Microfinance it is possible. Right now the problem is that, it is SHGs' which are doing this and efforts should be made so that the big financial institutions also turn up and start supplying funds to these people. This will lead to a better India and will definitely fulfill the dream of our late Prime Minister, Mrs. Indira Gandhi, i.e. Poverty. One of the statement is really appropriate here, which is as: Money, says the proverb makes money. When you have got a little, it is often easy to get more. The great difficulty is to get that little.Adams Smith. Today India is facing major problem in reducing poverty. About 25 million people in India are under below poverty line. With low per capita income, heavy population pressure, prevalence of massive unemployment and underemployment , low rate of capital formation , misdistribution of wealth and assets , prevalence of low technology and poor economics organization and instability of output of agriculture production and related sectors have made India one of the poor countries of the world.
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Following are the main services offered by The Jaipur central cooperative bank ltd. Jaipur :
Attractive Saving / Deposit Schemes. PGB Mitra Scheme (No Frill Accounts) Easy Loans Facilities. Krishi Card Scheme for Farmers & Credit facilities for various Agricultural Operations. Loan Facilities for Housing, Conveyance, Artisians, SMEs, SSI & Education. Swarozgar Credit Card Scheme. General Credit Card Scheme. Network of 153 branches in Punjab. Banking Services at door steps.
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Goal
At The Jaipur central cooperative bank ltd. Jaipur our goal is simple we want to see poor people, especially the poorest and those living in harder to reach areas, have access to microfinance and technology and as a result of access to these services, move themselves out of poverty. We envision a world where the poor have broken the generational chain of poverty and lead lives of respect, dignity and opportunity.
The Jaipur central cooperative bank ltd. Jaipur had a network of 20 branches in Jaipur. It provide products and services that: 1) reach deeper into poor communities with microfinance and technology services; 2) provide access to microfinance and technology services among the poor and poorest in harder to reach areas
Our Mission
The Jaipur central cooperative bank ltd. Jaipur mission is to offer the best services to customers, to help in rural development and to uplift the weaker sector.
Our Values
In all our work, we embrace and draw inspiration from our rich Grameen Bank Heritage. Our core values are:
We seek to empower the worlds poor. We hold ourselves accountable for transparency and measurable results, including social and financial performance.
We first seek to form partnerships with those who can advance our mission before acting alone;
We respect, invest in and promote local social entrepreneurs and local ownership; and, We honor the voice, professionalism and integrity of our staff and volunteers.
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Our Strategy
The Jaipur central cooperative bank ltd. Jaipur is a sponsored bank of The Jaipur central
cooperative bank ltd. Jaipur. Its total management is under The Jaipur central cooperative bank ltd. Jaipur, As per the strategic visioning of bank, the bank is working on aggressive growth plans as
per its vision , goals and objectives. The bank has been delivering reasonably good operational and financial performance over the last few years, despite some of the most challenging market conditions in the financial and credit markets for some time.
Mermbership
Membership of the bank is classified in these three categories:
1).Members of category A:
i) State Government ii) Apex bank For these the share capital is Rs. 10000.
Capital:
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The source for the capital of the bank is as follows: 1. Entrance Free 2. Share Capital 3. Deposits 4. Loan 5. Subsidies 6. Reserve and other funds 7. Loan debentures
Bord of Directors:
Board shall consist of 11 elected members, 4 nominated members by Govt. There sre total 15 board members. The no of members elected from Primary Agriculture Credit Society(PACS) is 9.
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Loans:
1. Loans to cooperative societies and person should be provided according to rules of Apex Cooperative Bank. 2. Facilities of overdraft loans and cash credit limit can be provided to PACS and the nominal members of category C under the rules describe by the Board of Directors, but it should according to the rules describe by the Bank/Apex bank. 3. Loan to permanent employees as decided by executive committee after approval from the register. 4. The time period of the loans provided by the bank would be provided to time by Reserve Bank of India/NABARD/ Apex Bank and Cooperative department, but in any condition it should not exceeds 15 years.
Profit Distribution:
The financial year of bank starts from 1st April to 1st March. According to Act and rules the profit should be distributed as under: 1. Minimum 25% in reserve fund: 2. Minimum 1% in education 3. Minimum 10% in dividend
Reserve Fund:
It will be undivided fund, no matter will have share in this.
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The Jaipur Central Co-operative Bank Ltd. Jaipur Organization Structure General Body Board Chairman Managing Director Executive Officer
Additional AEO
Additional AEO
Chief Manager
Senior Manager
Manger
(Vigilance )e)
Manager (T.M.E.)
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Branches 1. Bassi 2. Chomu 3. Phagi 4. Kishangarh Renewal 5. Pavta 6. Smbhar 7. Shahpura 8. Chaksu 9. Kothputli 10. Dudu 11. Jamvaramgarh 12. Virat nagar 13. Kishanpole Bazar 14. Chandple, Nai Anaz Mandi 15. Chaura Rasta 16. Jhotwara 17. Sanganer 18. Bagru 19. Vaishali Nagar 20. Govindgarh 21. Jalsu 22. Kotkhawda 23. Tunga
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NABARD
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Chairman
Scale 1 manager
Officers
Clerks
Messangers
Guards
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The Jaipur Central Co-operative Bank Ltd. Jaipur Credit Facilities Provided the Bank
Introduction
Indian economy is largely dependent on agriculture. Since majority of our population about their livelihood on agriculture. Cooperative bank plays a bite roles in agriculture economy. Such bank is focal point of finance which provides credit facility in rural area. At beginning the main object of cooperative bank is to provide short term loan to the Member of primary agricultural societies for seasonal agriculture Operation(S.A.O.) like facility to purchase fertilizer, seeds, pesticides etc. such type of loan repaid while crop comes in the market. Today about 75 to 80% agriculture(S.A.O.) is provided by through cooperative banks. It was felt that only(S.A.O.) loan does not fulfill the demand of rural economy.Cooperative bank borrow loan from NABARD through Apex Bank and lends to the primary agriculture cooperative societies. Only society provide direct loan to its members. It has been realized that agricultural alone cannot sustain the pressure of growing Population. Therefore as complementary activities like tiny, cottage and small scale Industries in rural area have to be provide stimulus. So that income level of rural families can be enhanced.
Besides Cooperative Banks were traditionally lending for agriculture. Banks know have to keep pace with the changing scenario and diversify their resources for non-farm activities. This will also help bank in build up their turnover, diffuse risk and enhance profitability. For this purpose under the section 25 of NABARD Act 1981, cooperative bank were allowed in non-farm sector advances directly and through member of cooperative society. Initially bylaws of cooperative banks did not allow direct advances to the borrower. Registrar of cooperative societies made amendment in cooperative act and allow to cooperative bank to amend their bylaws and allow direct membership.
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Such members are known as nominal members. Nominal members do not have voting Fight. It is in interest of the bank that after becoming nominal member bank can apply Various sections of Rajasthan Cooperative Societies Acr 2003.
Swarojgar Credit Card Scheme SCC Scheme aims at providing adequate and timely credit ie. working capital or block capital or both to small artisans, handloom weavers, service sector personnel, fishermen, self employed persons, rickshaw owners, other micro-entrepreneures, SHGs, etc., from the banking system in a flexible, hassle free and cost effective manner.
Borrowers in urban areas can also be covered under SCC Scheme. Small business covered under priority sector is also eligible under SCC Scheme.
Any scheme/project that is income generating/ employment generating may be covered under the scheme. The facility may also include a reasonable component for consumption needs.
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Farm sector activities like fisheries, dairy, etc., can also be covered under the scheme. Generally such of the self-employment activities which have regular turn-over/income stream on short-interval basis can be covered under SCC scheme.
KISAN MITRA SCHEME With the objective of financial inclusion of the common masses,the Trust has introduce KISAN MITRA Scheme at FTC Sacha Khera (dec.2006). Each of the four Kisan Mitra has been allotted 10 villages for helping the farmers in formation of kisan clubs, Self Help Groups and motivating them to undertake vermi compost units, orchard farming, attending training, opening of accounts in the bank, etc. Each Kisan Mitra visits the allotted villages for extension work and financial inclusion. So far, they have brought 41 villages under 100% financial inclusion.
FTCs provide the above mentioned facilities to all farmers of the neighbouring districts, irrespective of the fact that whether they have taken any loan from any financial institution or not or whether they are customers of PNB or any other bank or not. As on 31st March 2007, PNB's FTCs conducted 3,272 programmes and provided training to more than 87,000 persons. Besides, on location training is provided to more than 28,000 persons through 862 programmes. Besides, these FTCs arrange for (i) animal health check up camps; (ii) human health check up camps and (iii) farmers' visits to agri fairs/colleges, etc.
VILLAGE ADOPTION SCHEME Each FTC has adopted one village for developing it as a model village at a cost of Rs 5 lakh. The activities like establishment of village library (including color TV, book shelf, SFF items, etc.), water coolers and other electrical items for Government schools, adult literacy centre, solar lights, homeopathic clinics, sports materials, etc., have been undertaken under this Village Adoption Programme. The Trust has decided to start training, in collaboration with State Institute of Rural Development (SIRD), Assam for the economic empowerment of rural youth & women in North Eastern States.
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(a) Social factors (the poorest are often those who are socially marginalized because of caste affiliation and those who are most skeptical of the potential benefits of collective action). (b) Economic factors (the poorest often do not have the financial resources to contribute to the savings and pay membership fees; they are often the ones who migrate during the lean season, thus making group membership difficult). (c) Intrinsic biases of the implementing organizations (as the poorest of the poor are the most difficult to reach and motivate, implementing agencies tend to leave them out, preferring to focus on the next wealth category).
average for his normal customers, because they represent the combined banking business of some twenty micro-customers. Any bank branch can have a small or a large number of such accounts, without having to change its methods of operation. Unlike many customers, demand from SHGs is not price-sensitive. Illiterate village women are sometimes better bankers than some with more professional qualifications. They know that rapid access to funds is more important than their cost, and they also know, even though they might not be able to calculate the figures, that the typical micro-enterprise earns well over 500% return on the small sum invested in it (Harper, M, 1997, p. 15). The groups thus charge themselves high rates of interest; they are happy to take advantage of the generous spread that the NABARD subsidized bank lending rate of 12% allows them, but they are also willing to borrow from NGO/MFIs which on-lend funds from SIDBI at 15%, or from new generation institutions such as Basix Finance at 18.5% or 21%.
NABARD is presently operating three models of linkage of banks with SHGs and NGOs:
WHAT IS SHG BANK LINKAGE PROGRAMME? The Self-Help Group-Bank Linkage Programme (SBLP), which started as a pilot programme in 1992 has developed with rapid strides over the years. SHG-Bank Linkage Programme was started on the basis of recommendation of S K Kalia Committee.
MODELS OF SHG-BANK LINKAGE PROGRAMME SHG MODEL The strategy involved in this model is that of forming small, cohesive and participative groups of the poor, encouraging them to pool their savings regularly and using the pooled savings to
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make small interest bearing loans to members and, in the process, learning the nuances of financial discipline. Subsequently, bank credit also becomes available to the group to augment its resources for the purpose of lending to its members. The SHG-bank linkage program has proved to be the major supplementary credit delivery system with a wide acceptance by banks, NGOs and various government departments. There are three models of SHG-bank linkages that have evolved over time, especially in India.
Bank Linkage
SHGs
NGOs
In this model, banks themselves take up the work of forming and nurturing the groups, opening their savings accounts and providing them bank loans. Up to March 2006, 20% of the total number of SHGs financed were from this category. This showed an increase of 61.63 per cent in bank loan to SHGs over the position as on March 05, reflecting an increased role of banks in promoting and nurturing SHGs.
MODEL II:
SHGS FORMED BY NGOS AND FORMAL ORGANISATIONS, BUT DIRECTLY FINANCED BY THE BANKS
Bank
NGOs
SHGs
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MODEL III
This model continues to have the major share, with 74 % of the total number of SHGs financed up to 31 March 2006 falling under this category. Here, NGOs and formal agencies in the field of microfinance act only as facilitators. They facilitate organizing, forming and nurturing of groups, and train them in thrift and credit management. Banks give loans directly to these SHGs.
Bank
SHGs
SHG Members
In the model iii, banks take sole responsibility for promoting, developing, and financing SHGs. This programme requires considerable effort by the banking staff towards SHG formation. This model is not an encouraging one and only 8% of SHGs follow this model.
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SAMPLING DESIGN
1.SAMPLING PROCEDURE:- The type of sampling is convenient sampling and
judgmental sampling. I have chosen the sampling area according to the convience for getting more accuracy and feasibility in the information. Which is vital for survey.
3. SAMPLE SIZE:- I have surveyed 120 members, i.e.30% of the total size, to maintain the
feasibility. 38
Research Methodology
Secondary Research
Primary Research
Internet
Bank Documents
Questionnaire filling by
Reports
SHG members
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1. Occupation
Salaried person 8%
INTERPRETATION
As per my survey I found that the majority of customer of JCCB are salaried person or Belongs to agriculture sector and it was also found that people who are self employed are not much friendly with bank yet.
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2. INCOME
3.5 3 2.5 2 1.5 1 0.5 0 less than 10000 10000-20000 20000-35000 35000 & above Column1
INTERPRETATION
The above graph depicts that the maximum number of customers of JCCB are applying for the credit facilities whose level of income is above Rs.3500 or between 20-35 thousand. The income aspect is being considered by the Bank in order to find out the repaying capacity of the borrower or the customer. And the Bank considers the repaying capacity upto 25% of customers income.
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INTERPRETATION
As per the findings of the survey the most attracting attribute for a customer from a Bank is the requirement of less documentation for the purpose of loan with proper information. As it shows in the above pie chart that 50% of the customer are interested In less documentation and 25% of the customers feels that adequate information is an effective attribute.
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4). What type of account the customers are operating with JCCB?
Any loan Account 10% FD/RD Account 20% Current Account 40%
INTERPRETATION
As per the findings of survey maximum number of customer are operating saving and current account and 20% of customers are operating FD/RD account and 10% of the customers are operating any of the account as above.
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Average 10%
Poor 0%
Excellent 20%
Good 70%
INTERPRETATION
According to the customer they found JCCB satisfactory up to the level of their expectation
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INTERPRETATION
As per the survey 30% of customers who has preferred for term are the salaried persons who find paying monthly installment easy and comfortable. 25% of the customers who are businessman and professionals feels cash credit limit as a better source of finance. 30% of the customers are attracted towards Kissan Credit Card and Investment Credit as they belongs to agricultural sector of they have their own Business Enterprise.
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7). According to you which schemes of JCCB attracts you the most?
INTERPRETATION
As per the survey 65% of the customers have taken personal loan and then housing loan, 35% of the customers have taken mortagage loan and self help group loan.
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8). Which attribute attracts the customer while taking a loan from JCCB ?
INTERPRETATION
As per survey, more than 50% of the customers are focused on lower interest rates offered to them and less documentation requirements. But for the remaining 20% customers less processing time and lower services charges is the attribute of attracting for them while taking a loan.
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9). What should be the time period for repaying the above loan you preferred ?
INTERPRETATION
As per the findings, 50% of the customers are comfortable to repay the loan between 10-15 yrs and the 25% of customers feels that the loan repayment period should be more than 15 yrs. But the people who takes loans are comfortable to repay the loan within 5 yrs, as per conditions offered by the bank to them.
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10). Which new credit services you are expecting from JCCB ?
INTERPRETATION
40% of the customers expects that JCCB should provide education loan to the customers as an extra benefit for them as a new credit facility, where 30% of the customers feels that it provide vehicle loan to the customers. 20% of the customers desired to have industrial loan credit facility from JCCB as a new aspect. Remaining 10% customers requires credit card facility.
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NO 50%
YES 50%
INTERPRETATION
The above pie chart depicts that the half of the majority customers of JCCB belongs to Agriculture sector and remaining half belongs to various others sectors.
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No 15%
Yes 85%
INTERPRETATION
The customers who belongs to agricultural sector have answered this question and 85% of them is satisfied with the schemes and services provided by the bank related to which the agriculture needs of customers are very much fulfilled. And 15% of the customers still want a improvement in JCCB schemes and credit facilities related to agriculture.
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13). Which is the best agricultural loan scheme of JCCB according to you ?
INTERPRETATION
The customers of JCCB who have the agricultural land are taking the above loans accordingly as per their requirements in future.
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6).
SWOT Analysis:
Strength
Helped in reducing the poverty: The main aim of Micro Finance is to provide the loan to the individuals who are below the poverty line and cannot able to access from the commercial banks. As we know that Indian, more than 350 million people in India are below the poverty and for them the Micro Finance is more than the life. By providing small loans to this people Micro finance helps in reducing the poverty. Huge networking available: For MFIs and for borrower, both the huge network is there. In India there are many more than 350 million who are below the poverty line, so for MFIs there is a huge demand and network of people. And for borrower there are many small and medium size MFIs are available in even remote areas.
Weakness
Not properly regulated: In India the Rules and Regulation of Micro Finance Institutions are not regulated properly. In the absent of the rules and regulation there would be high case of credit risk and defaults. In the shed of the proper rules and regulation the Micro finance can function properly and efficiently. High number of people access to informal sources: According to the World Bank report 80% of the Indian poor cant access to formal source and therefore they depend on the informal sources for their borrowing and that informal charges 40 to 120% p.a.
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Opportunity
Huge demand and supply gap: There is a huge demand and supply gap among the borrowers and issuers. In India around 350 million of the people are poor and only few MFIs there to serving them. There is huge opportunity for the MFIs to serve the poor people and increase their living standard. The annual demand of Micro loans is nearly Rs 60,000 crore and only 5456 crore are disbursed to the borrower.( April 11)
Employment Opportunity: Micro Finance helps the poor people by not only providing them with loan but also helps them in their business; educate them and their children etc. Opportunity for Pvt. Banks: Many Pvt. Banks are shying away from to serve the people are unable to access big loans, because of the high intervention of the Govt. but the door open for the Pvt. Players to get entry and with flexible rules Pvt. Banks are attracting towards this segment.
Threat
High Competition: This is a serious threat for the Micro Finance industry, because as the more players will come in the market, their competition will rise , and we know that the MFIs has the high transaction cost and after entrant of the new players there transaction cost will rise further, so this would be serious threat. Neophyte Industry: Basically Micro Finance is not a new concept in India, but that was all by informal sources. But the formal source of finance through Micro Finance is novice, and the rules are also not properly placed for it. Over involvement of Govt.: This is the biggest that threat that many MFIs are facing. Because the excess of anything is injurious, so in the same way the excess involvement of Govt. is a serious threat for the MFIs
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7). CONCLUSION
The customers of JCCB are satisfied with the bank and its services. As per the survey it was found that the majority of customer of JCCB are salaried person of belongs to agricultural sector and it was also found that people who are self employed are not much friendly with the bank yet. The customers of JCCB are satisfied with the rate interest offered by the Bank. The JCCB is dealing wiath both Micro and Macro finance aspect. Most of the customers are salaried of from the agricultural sector. The JCCB is playing a major role in financing the Self Help Groups(SHGs). The most important attribute which is attracting the customers is micro financing at lower interest rate while other factors are less processing time, and effective service, less documentation etc. Some of the customer feels that JCCB should develop more beneficial for the agricultural sector.
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Under mention are the few recommendations and suggestions, which I felt during my project on JCCB being a reputed organization still had certain area where improvement or change would be beneficial for the Bank for its credit structure.
Bank should provide attracting schemes for the self employed person too.
Bank should also provide credit facility for educational, vehicle, and industrial Loans as a new credit facility.
Bank should provide variety of schemes and quick service facility to make their credit structure more attractive.
As customers who are in need of loan or credit, mostly take loan from the commercial Bank and still majority of people are not very much aware about the functioning of Cooperative banks and there schemes of credit and loans for general public.
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9). Bibliography
RSCB website:- www.rscb.org.in JCCB Annual report Technical Brochres of JCCB www.microfinanceinfo.com htt:/ifmr.ac.in/cmf www.basixindia.com www.nabard.org www.sewa.com www.wikipedia.com www.sbi.com.http:/www.unitedprosperity.org/faqus http:/mas.co.in/contactus.aspx http:/www.edarual.com/SHG-Study/Executive-summary.pdf www.microfinanacefocus.com/ http://indiamicrofinance.com/financial-regulation-financial-inclusions-speechdeputy-governor-reserve-bank-india.html Yunus, Muhammad. Creating a World Without Poverty: Social Business and the Future of Capitalism. Public Affairs, New York, 2008. Vikram Akula, Business Basics at the Base of the Pyramid, Harvard Business Review, June, 2008
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