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Micro finance

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Text of Micro finance

  • 1.
    • MICRO FINANCE
  • PRESENTED BY
  • R.KUMARAVENKATESAN
  • ADVOCATE
  • PATENTS DEPARTMENT
  • ALTACIT GLOBAL

PRESENTATION 2.

  • FINANCE
  • Abranchofeconomicsconcerned withresource allocation ,resource management , as well asacquisitionandinvestment .
  • Deals withmatters relatedtomoneyand themarkets .
  • The management of money, banking, investments, and credit classified ob the basis ofquantum, period, field, beneficiaries, rural/urban etc.

INTRODUCTION 3.

  • Microfinance providers arebanks for poor.
  • A type of banking service
  • different from the traditional banking system
  • the goal: to give low income people an opportunity to become self-sufficient by providing
  • a means of saving money, borrowing money and insurance.
  • Loans provided to unemployed or low-income individuals or groups who would otherwise have no other means of gaining financial services

MICROFINANCE 4. MICROFINANCE

  • Includes,
  • deposits, loans, payment services, money transfers and insurance, products, savings and credit services
  • Types: Urban microfinance and rural microfinance
  • Beneficiaries: microenterprises, poor, women, low-income households
  • Act: The micro finance institutions (development and regulation) bill, 2011-

5. CORE PRINCIPLES FOR MICROFINANCE

  • The poor needs access to financial services
  • The poor has the capability to repay loans and generate savings
  • an effective tool for poverty alleviation
  • to provide financial services to an increasing number of disadvantaged people
  • greater reach and sustainable development

6.

  • to raise their income levels and improve their living standards.
  • women, to start or expand very small, self-sufficient businesses.
  • tool to fight against poverty,
  • The transparency of financial activities

CORE PRINCIPLES FOR MICROFINANCE 7.

  • On the basis of legal status
  • Formal Microfinance Institutions rural/village banks, commercial banks, telecom firms, and cooperatives
  • Semi-formal MicrofinanceInstitutions nongovernmental organizations providing micro-sized loans
  • Informal Microfinance Sources money lenders and shopkeepers

MICROFINANCE INSTITUTIONS 8.

  • risk of lending to the poor (the loan may be misused easily)
  • high costs involved in small loan transactions
  • lack of awareness about sources
  • the poors inability to offer marketable collateral for loans
  • difficulty in measuring the social performance of MFIs

PROBLEMS FACED BY MICROFINANCE 9.

  • Continued..
  • mixing of charity with business by microfinance providers
  • high interest rates of loans made to the poor
  • lack of customized microfinance models for the poor
  • inappropriate targeting of poor
  • lack of microfinance training for MFIs
  • poor distribution system to spread out loan facilities into rural areas
  • dual mission of MFIs to be financially sustainable as well as development oriented

PROBLEMS FACED BY MICROFINANCE 10.

  • increased self-employment opportunities especially for women (Women are granted 75% of microcredits)
  • micro entrepreneurs development : Small shopkeepers, peddlers, craftsmen or farmers.
  • acquired the know-how
  • to generate a regular income.

ADVANTAGES 11.

  • started in the early 1980s with self-help groups
  • Small Industries Development Bank of India (SIDBI)
  • National Bank for Agriculture and Rural Development (NABARD)
  • Grameen Financial Services Pvt Ltd, Share Microfin Limited,
  • Shri Kshetra Dharmasthala Rural Development Project,
  • Grama Vidiyal Micro Finance Pvt Ltd,SKS Microfinance Ltd

MICROFINANCE IN INDIA 12. THANK YOU