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The Outreach of Micro Finance Services through SHGs in Puducherry

The Outreach of Micro Finance Services through SHGs in Puducherry

-         A. Bharathy* & Parna Ray**

Puducherry University Comminity College.

________________________________________________________________________

Abstract:

Poverty is, and has always been, the biggest socio-economic challenge for India. Over the years many Government measures have attempted to help the poor by implementing different poverty alleviation programmes but with little success.

It has now been realized that the essential need of most impoverished populations is the ‘need for credit' since they strongly prefer to start their own entrepreneurial activities rather than earn wages. The concept of micro-finance has spread extremely rapidly since its beginning in the late 1970s , but whether and how it alleviates poverty has been a subject of intense debate. In recent years Microfinance Institutions (MFIs) have begun to offer a wide variety of services, including insurance and business development skills training. Most of the micro-financing schemes in India focus on women and operate through the Self help Group (SHG) mechanism.

This paper, "The Outreach of Micro Finance Services through SHGs in Puducherry", based on the data collected from Puducherry, makes a study of the performances of the SHGs/ MFIs in the  the Union Territory  and compares it with the successful MF enterprises in other parts of India. We found that an astounding growth has been witnessed by this sunrise sector from merely catering to the objectives of savings and self employment in the Government run SHGs in contrast to a basket of new services like owning a house (MAS Financial Services, Delhi), forging strategic tie ups(deal with Metro Cash & Carry to supply its products to 95 SKS Kirana shops)  were offered elsewhere, by MFI's in the other parts of our country. The pattern of micro credit utilization by the  beneficiaries and the outreach of credit plus services of the MFI's in Puducherry in creating awareness on various social issues leading to women's empowerment - are also discussed in the paper.

Microfinance is one of the few market-based, scaleable anti-poverty solutions that is in place in India today, and the argument to scale it up to meet the overwhelming need is compelling. The paper concludes with some suggestions that would help the MFIs unleash the entrepreneurial talent of the people in the  bottom line of the Indian society .

________________________________________________________________________

Author details:

* A. Bharathy, Lecturer in Management, Department of Management, Puducherry University Comminity College, is a Ph.D Research scholar in  Dravidian University .

 

** Parna Ray, Lecturer in Economics, Department of Management, Puducherry University Comminity College, is a Ph.D Research scholar in   Mother Teresa Women's University, Kodaikanal . She has submitted her Ph.d thesis on "Structural Adjustments in the Indian Economy  - its Impact on Female Employment in Urban Tamil Nadu."

The Outreach of Micro Finance Services through SHGs in Puducherry

Poverty is an issue of global scale. It is estimated that one half of the world population, almost 3 billion people, currently live on less than $2 per day.

The causes of poverty are many, but the consequences are infinite. Unemployment, illiteracy, hunger, homelessness, unsafe drinking water, and disease have an immeasurable impact on the lives of the poor around the world.

Over the years many Government measures have attempted to help the poor by implementing different poverty alleviation programmes but with little success.

It has now been realized that the essential need of most impoverished populations is the need for credit since they strongly prefer to start their own entrepreneurial activities rather than earn wages. There are certain misconception about the poor people that they need loan at subsidized rate of interest on soft terms, they lack education, skill, capacity to save, credit worthiness and therefore are not bankable. Nevertheless experience reveals that rural poor are actually efficient managers of credit and finance.

Poor people have demonstrated an appetite for micro loans and repay them. . Availability of timely and adequate credit is essential for them to undertake any economic activity rather than credit subsidy. Even if it does not reduce poverty immediately, mere access to finance is a boon.

The concept of micro-finance was given by Bangladeshi economist Mohammad Yunus in the year 1976 and was successfully implemented in Grameen Bank. The concept has since spread with the adaptation and evolution of Professor Yunus' ideas to various countries and contexts. The UN Year of Microcredit in 2005 indicated a turning point for Microfinance and increased awareness  about the prospects of the field to  contribute to poverty alleviation and the integration of the world's poor into the rapidly evolving global market system.

Mohammad Yunus and the Grameen Bank were awarded the Nobel Prize for Peace in the year , for their contribution to the reduction in World Poverty.

 

Micro finance

Broadly speaking, microfinance for loans (i.e., micro credit) is the provision of small scale financial services to people who lack access to traditional banking services. The term microfinance usually implies very small loans to low-income clients for self employment, often with the simultaneous collection of small amounts of savings. The design principles of microfinance are derived from the needs and socio-economic conditions of the poor and have emerged from the experience of microfinance institutions during the last two to three decades all over the world. These design principles are:

• small saving or thrift by poor is possible if collected at doorsteps;
• poor people need small collateral free loans with frequency instead of large loans at a time;
• timely, adequate and continued credit facility;
• simple application processes
• non-rigidity of end use is preferred by poor people over rigid end use of small loans;
• repayment to match with existing family cash flow
• relatively small repayment periods are preferred, e.g. weekly, fortnightly, monthly, instead of half-yearly, yearly, etc.;

It has been seen that

• intensive supervision is required for microfinance operations;
• women are better customers relative to men;
• and group method of lending is more successful relative to individual lending.

 

Micro finance services

The mostly used service of MFIs is the micro-credit to begin, establish, sustain, or expand very small, self-supporting businesses. Many microfinance programs offer services beyond credit. The most basic such service is savings i.e providing the poor a  safe place to store their money. Some MFIs require mandatory savings each week from each borrower as well as each group, some of these programs also collect voluntary savings, allowing clients to deposit as much as they like each week. Recently MFIs have begun to offer a wide variety of services, including insurance (life insurance and/or health insurance), business development skills training, and remittances. A popular form of training is credit with education, developed by Freedom from Hunger, which includes modules on both business and health training.

 

Micro-finance interventions can be identified based on their span of activity, source of funds, route through which it reaches the poor or the coverage. However, it seems that one of the most common practices and approaches prevalent is providing credit through Self-Help Groups. The approach is to make SHGs the main focal point to route all credit to members. Almost all national funding organisations (NABARD, RMK) as well as other Government schemes advocate forming of Self-Help Groups and thus providing or linking with credit. However, many organisations providing individual finance directly also exist. It has been explained in the chart below

 

 

 

A Brief History of Microfinance in India

Micro finance has been in practice for ages (though informally). The Co-operative movement set up in 1904 and the Agricultural Credit department (RBI Act 1934) sowed the seeds of micro finance activities in India.

 

The post-nationalization period in the banking sector, circa 1969, witnessed a substantial

amount of resources being earmarked towards meeting the credit needs of the poor. Credit came to be recognized as a remedy for many of the ills of the poverty. There spawned several pro-poor financial services, supported by both the State and Central governments, which included credit packages and programs customized to the perceived needs of the poor. The pioneering efforts at this were made by National Bank for Agriculture and Rural Development (NABARD),  which was given the tasks of framing appropriate policy for rural credit, provision of technical assistance backed liquidity support to banks, supervision of rural credit institutions and other development initiatives.

In the early 1980s, the GoI launched the Integrated Rural Development Program (IRDP), a large poverty alleviation credit program, which provided government subsidized credit

through banks to the poor. It was aimed that the poor would be able to use the inexpensive credit to finance themselves over the poverty line.

Also during this time, NABARD conducted a series of research studies independently and in association with MYRADA, a leading non-governmental organization (NGO) from Southern India, which showed that despite having a wide network of rural bank branches servicing the rural poor, a very large number of the poorest of the poor continued to remain outside the fold of the formal banking system.

Against this background, a need was felt for alternative policies, systems and procedures, savings and loan products, other complementary services, and new delivery mechanisms, which would fulfill the requirements of the poorest, especially of the women members of such households. The  emphasis therefore was on improving the access of the poor to microfinance rather than just micro-credit.

To answer the need for microfinance from the poor, the past 25 years has seen a variety of microfinance programs promoted by the government and NGOs. In 1999, the GoI merged various credit programs together, refined them and launched a new programme called Swaranjayanti Gram Swarazagar Yojana (SGSY). The mandate of SGSY is to continue to provide subsidized credit to the poor through the banking sector to generate self-employment through a self-help group approach and the program has grown to an enormous size.

 

The microfinance sector has reported an astounding growth with an overall coverage of the sector estimated to be 76.6 m(2009) against 59m (2008). MFI's in the country have reported a client base of 22.6m as on march 2009 recording an increase of around 8.5 m clients during the year – a growth of 60% during the previous year(State of the Sector Report 2009). In terms of reach, apart from south India where microfinance is concentrated over the past two – three years it has also spread to states like Madhya Pradesh , Uttar Pradesh and West Bengal. Despite the global liquidity crunch growth in the country's Mf sector continues to be robust.

 

In different countries of the world various operative microfinance models are as follows:

Grameen Bank Model Bangladesh: This model basically provides finance for entrepreneurial women already doing small jobs.

The second model may be called Village Bank Model. This model involves an implementing agency that establishes individual village banks with about 30 to 50 members and provides "external" capital for onward financing to individual members.

The third type of MF model is a Credit Union which is based on the concept of mutuality. It is in the nature of non-profit financial cooperative owned and controlled by its members.

A fourth model originating in India is based on Self-Help Groups (SHGs). Each SHG is formed with about 10-15 members who are relatively homogeneous in terms of income. The Self help Groups (SHGs) are essentially informal voluntary associations of people formed to attain a collective goal. People who are homogeneous with respect to social background, heritage, caste or traditional occupations come together for a common cause to raise and manage their collective savings for the benefit of all the group members.  Usually, the focus is on poor and that too on women. In fact a lot of Micro-financing schemes are now increasingly focusing on women. There are compelling reasons for this.

 

Women are perhaps the most adversely affected by poverty, as they make up 70 percent of the population living on less than $1 a day. Globally, women earn only 10% of the world's income. In India, the trickle down effects of macroeconomic policies have failed to resolve the problem of gender inequality. Women have been the vulnerable section of society and constitute a sizeable segment of the poverty-struck population. Microfinance has come as a miracle to these poor women.

Micro loans are available solely and entirely to this target group of women. There are several reason for this: Among the poor , the poor women are most disadvantaged –they are characterized by lack of education and access of  resources, both of which is required to help them work their way out of  poverty and for upward economic and social mobility. Evidence shows that groups of women are better customers than men, the better managers of resources. If loans are routed through women benefits of loans are spread wider among the household.

 

Take the case of Manjula, a 40-year-old seamstress who lives in Bagalur, a village 90 minutes away from downtown Bangalore, struggled to support her two children without help from her alcoholic husband. She depended on moneylenders, who charge up to 1,000 per cent a year.

Two $220 microcredit loans over two years enabled her to open a shop selling saris, which she had been peddling from her home. Since then she has increased her monthly income from $45 to $110, including the earnings from side jobs tailoring and teaching sewing classes. That's enough to pay off her loan and save $30 a month. "My dream is to convert this place into a big shop," she says proudly.

At Sadasivapet village about 80 km from Hyderabad Susheela has started  a small shop with a loan of Rs.4000 taken from SKS MF 8 years ago. Subsequent loans have allowed her to expand her  business  and her latest loan is for Rs. 25,000.

A review of a fraction of the wealth of literature available on SHGs and MFIs also confirm that SHGs are seen to confer many benefits, both economic and social for poverty alleviation. SHGs enable their women members to grow their savings and to access the credit which banks are increasingly willing to lend. But there are also some questions. How effective are the groups in managing their financial transactions? Are the groups using the loans sustainable income generation? Do the poorest benefit, do, they not join at all or if they do join, are they more likely to drop out? A study in 2000 by EDA Rural Systems Pvt Ltd in association with Andhra Pradesh Mahila Abhivruddhi Society for NABARD explores such questions, based on field research in four states of India, presenting a reality check of ‘what is really happening'.

 

Nirmala V,  Sham Bhat K. and P.Bhuvaneshwari (2004) in their study "SHG for poverty alleviation in Puducherry have discussed about the performance and impact of SHG's on their empowerment of the rural poor women in Puducherry region and the study has contributed to an understanding of the functioning of the SHG's in rural Puducherry.

 

Ahijit Banerjee , Esther Duflo and et al. (2009) in their paper "The Miracles of Microfinance? Evidence from a randomized Evaluation"  report on the intervention of micro credit in a mew market (Hyderabad). They show that intervention increased total MFI borrowings and they also studied the effect on  the creation  and profitability of small businesses, consumption and investment .

 

Sukhwinder Singh Arora, (2005) points out that Savings services are needed by many more customers and as frequently as access to phone services. Many poor households value access to savings but  lack safe, secure and accessible savings services for the short, medium and long terms. In the past, many banks sent collectors to gather these savings but problems with monitoring, inability to tackle misappropriation and the rising aspiration of collectors to become permanent staff of public sector banks killed a useful service.

Guide to Microfinance – India  (2009) by Netscribes (India) Pvt. Ltd., a knowledge consulting and solutions firm, provides an overview of the current state of microfinance in India covering extensively the two primary facilitators of microfinance – microfinance institutions (MFIs) and SHG's bank linkage programme (SBLP).

Jai Kumar (2009) reported that Self-help groups (SHGs) in Tamil Nadu are helping rural women become self-reliant by opening new employment avenues. With help from the State and Central Governments, women residing in Krishnagiri District in Tamil Nadu have set up cottage industries to make various items ranging from soft toys to beautiful accessories. workers involved with the SHGs are earning a decent sum for their livelihood.

The sixth in a series of annual summits organised by ACCESS Development Services, was this year's Microfinance India Summit was held on October 26-28, 2009. Over the years, the microfinance India Summit has emerged to become among the most important sectoral platforms globally, bringing together thought leaders to delve into and debate key current issues in the sector.

To address the issue of national economic disparity and regional skew, MF India has created it's State Vision Document (2009). To date, much of India's microfinance movement has grown largely in the southern states. Thirteen priority states which account for 67% of the poor remain fairly underserved. The State Visioning initiative identifies one or two states in the outlined underserved regions and attempts to bring together all stakeholders to help create a united vision for the area. This initiative takes stock of financial, human and institutional resources required to support the sector in the state and identifies gaps in the sector, enabling greater clarity for the roles and responsibilities of different stakeholders.

To better chronicle the experiences and developments of India's microfinancial sector year over, the MF India platform has also initiated its annual "State of the Sector Report" (2009). The report intends to highlight and present perspectives on current issues and document new interest, investments and innovations in the sector. It also identifies existing knowledge gaps that require further research, statistical efforts, and empirical backing. In the past two years the State of the Sector has been considered one of the most useful reference document for microfinance India both within and outside the country.

 

Despite the major growth of microfinance, and the results thrown up by several research studies showing that serving the poor is not an unviable proposition, there are issues that have constrained MFIs . After all micro finance is still a young industry. We don't understand the basic impacts, or relative values of different models. Many misconceptions about microfinance prevail even now. to understand issues like :

• why 56% of the poor in India still borrow from informal sources,

 

• why 70% of the rural poor still do not have a deposit account.

 

• Poor people are committing suicides because of peer pressure of the organizations for repayment.

So continuous research in Microfinance is needed. The present study is a small attempt in that direction.  Microfinance providers in India can be classified under three broad categories: formal, semi formal and informal.

The formal sector comprises of the banks such as NABARD, SIDBI and other regional rural banks (RRBs).

The majority of institutional microfinance providers in India are semi-formal organizations broadly referred to as MFIs. Registered under a variety of legal acts, these organizations greatly differ in philosophy, size, and capacity. There are over 1000 non-government organizations (NGOs) registered as societies, public trusts, or non-profit companies such as Swayam Krishi Sangam (SKS India ),  Self help women's association(SEWA) , Mysore resettlement and development agency (MYRADA) etc...

 

In addition to friends and family, moneylenders, landlords, and traders constitute the informal sector. While estimates of their importance vary significantly, it is undeniable that they continue to play a significant role in the financial lives of the poor.

 

This paper, based on the data collected from the Union Territory of Puducherry makes a study of the performances of these three sectors.

Objectives of the study

To Assess

• To study the pattern of credit utilization by the beneficiaries and thereby analyse whether MF has resulted in sustainable income generation activities leading to the economic empowerment of the beneficiaries.

 

• To evaluate the outreach of credit plus services of MFI's in creating awareness on various social issues leading to women's empowerment.

 

 

• To compare the performance of the MF services in Puducherry with some successful MF enterprises in other parts of India.

 

Methodology & Data Source :

The data used in this paper has been collected from both primary and  secondary sources.  For collection of primary data , a survey was carried out to evaluate the comparative outreach of micro finance services through SHGs  run by both government and private sectors representing  different localities of the UT like Lawspet, Ousteri, Sultanpet etc.. The surveyors collected the data from different sources such as government organizations, banks, NGOs as well as through actual interaction with the beneficiaries using the  structured questionnaire as well as interview  method. The sample size is 145 beneficiaries representing 10 SHGs  The research  is of analytical type in which we have used the facts, figures and information  available; analysed them, and,  inferences were drawn to make a critical evaluation.

Data Analysis and Discussion

The analysis and results have been presented in five parts.

 

Table :1                      SHG Profile

Variables

Government run SHGs

NGO run SHGs

No: of Groups

5

5

Total Members

65

80

Membership Type

Female          :

Male/Mixed  :

100%

-

57%

43%

Objectives of SHG

Savings         :

Self –Employment:

80%

20%

60%

40%

Future Vision of SHG

Savings         :

Self –Employment:

10%

90%

12%

88%

Period of Operation

<5 years :

> 5 years:

 

24 %

76 %

 

65%

35%

Source : Computed from Primary Data

 

From the data presented in Table 1 , we see that the Government run SHGs comprising of an average of 13  female members have mostly been in operation for more than 5 years. They start with an objective of generating of fund through regular small savings by each member to meet their contingency requirements.

 

The ultimate vision is eradication of poverty through sustainable self-employment ventures. The privately run SHGs have memberships varying from 15 to 20, and a few of them even had male members amidst their groups. The majority of the groups had started only 2 -3 years back. A few groups (formerly run by well known NGOs for 5 – 8 years) were found to have closed down in recent times. Their objectives and future goals are more or less in tune with the government run SHGs.

 

Table 2 portrays the image of a typical beneficiary as a married women –mother of 3 children - mostly unskilled with only a primary education. The beneficiaries are mostly house wives. While the government schemes cater to young women from BPL families , the privately run SHGs are more heterogeneous both in terms of age profile and economic status.

 

Table 2:                      Demographic Profile of SHG Members

AVG age of SHG members

Government run SHGs

NGO run SHGs

< 35 yrs          :

> 35 yrs          :

80%

20%

20%

80%

Marital Status

Married           :

Unmarried       :

95%

5%

95%

5%

AVG no: of children / member

3

3

AVG Girl :Boy children

2:1

2:1

Education Profile

< 10'th Std    :

> 10'th Std    :

60%

40%

80%

20%

Occupational Status

House Wife       :

Self Employment :

Other Service       :

 

 

Skill Level for Self Employment

Skilled           :

Unskilled         :

25%

75%

20%

80%

Economic Status

Red Card       :

Yellow Card     :

100%

-

60%

40%

Source : Computed from Primary Data

 

Table 3 : SHG Operational Profile

Variables

Government run SHGs

NGO run SHGs

Frequency  of  Meeting

Weekly       :

Monthly         :

Fortnightly         :

90%

10%

-

40%

-

60%

Frequency of Savings

Monthly

Monthly

Savings /member

Rs.100

Rs.100 (60%)

Rs.105 (40%)

Loan Amount taken

< 5000          :

5000 – 10,000         :

> 10,000       :

60%

20%

20%

-

20%

80%

AVG Repayment Rate

1.8 Paisa

1 Paisa

Training for Social Activities

100%

60%

Training for Self Employment

67.5%

43%

Contingency Fund

100%

55%

Source : Computed from Primary Data

 

The table 3 gives us a clear picture of the difference between the operational styles  government  and privately run SHGs.It is evident that government run SHG's follow an uniform procedure of  weekly meetings , different loan schemes with subsidy apart from borrowing  from group savings fund. In contrast to this observation, the private SHG's do not have any other source of funds other than the group savings to lend to its members and there is no compulsory provision of funds for contingencies .Although the repayment interest rate is lower than the government rate, in this case the loan amount is not entitled to subsidy as in Government loans. Government run SHG's show greater efficiency through offering varied trainings for social awareness creation and opportunities for self employment generation.

 

Table 4 : Credit Utilisation Profile

Variables

Government run SHGs

NGO run SHGs

Consumption

61 %

85 %

Income generating activities  (Farm)

9 %

6 %

Income generating activities  (Non farm)

30 %

9 %

Source : Computed from Primary Data

 

Table 4 shows us that credit utilization pattern does not match the objectives for which microfinance schemes have been developed. Most of the funds have not been spent responsibly for income generation activities but have found their way to meet their household consumption requirements like purchase of consumer durables, festival expenditure,  jewels and sometimes investments in children's education.

 

Thus we see that the Microfinance – SHG linkage has had many significant impacts on the lives of  poor women. On the positive side:

 

• Evidence suggests that micro credit does have important effects on household expenditure thus improving the standard of living of the family. A few households appeared to use micro credit to expand the family  business especially the ones run by the male members like iron shop, barber shop, small transport business, fodder business etc A few women member had ventured into setting up of juice shops, tiffin centres, idly batter / powder shops, flower business, etc

 

• There have undoubtedly been women whose status in the household has improved, particularly where they have become successful entrepreneurs. Even where income impacts have been small, or men have used the loan, the fact is that micro-finance programmes have thought women worth targeting This realisation might have given at least some women more value and respect within  the household.

 

• Savings provide women with a means of building up an asset base. There were cases where we have come across women who have single handedly uplifted the family from the depth of poverty even when the male members have failed to carry out their responsibilities.

 

• Small successes have given them confidence to dream bigger for future expansions . It is likely that changes at the individual, household and community levels are interlinked and that individual women who gain respect in their households then act as role models for others leading to a wider process of change in community perceptions.

 

• Micro-finance has also been strategically used by some NGOs as an entry point for wider social and political mobilisation of women around gender issues like domestic violence, male alcohol abuse and dowry.

 

However the issue of MF led development requires a more detailed examination as there are several shortcomings which were clearly evident :

 

• The study found that most women invested the loan amount either in not very necessary consumption or in existing business activities which are insecure and generate low profit .About 65-70% of the women invested the money in their husbands' activities. In many programmes and contexts it is only in a minority of cases that women have developed lucrative activities of their own through micro-credit alone.

 

• Pressure to save – ‘saving' being the basic motive of this scheme - may mean women forgoing their own necessary consumption. Small increases in access to income and influence may therefore be at the cost of heavier work loads, increased stress and women's health.

 

• Although in many cases women's increased contribution to household well-being has improved domestic relations, in other cases it intensifies tensions as there are evidences of men withdrawing their contributions to certain types of household expenditures expecting the women to take care of them.

 

• For some women micro-finance has been positively disempowering. Where women have not been able to significantly increase incomes under their control they have become dependent on loans to pay-off previous loans. Credit, used mainly  for consumption purposes, through successive incremental loans have pushed many poor families into a perpetual debt–trap leading to severe impoverishment

 

• Failure to repay loans on time may put serious strains on the networks of the defaulters with other women and we came across cases where women have been forced to leave the SHG due to the pressure from other members.

 

• While micro credit has succeeded in altering the pattern of household expenditure and in a few cases - creating and expanding businesses, it appears to have no discernible effect on education, health, or women's' empowerment. Of course, after a longer time, when the investment impacts may have translated into higher total expenditure for more households, it is possible that impacts on education, health, or women's empowerment would emerge.

 

• Interestingly while , during informal discussions with respondents,  a few women complained about the time consuming Sunday group meetings, we found that most of the time these meeting were little more than recreational get togethers where the women simply watched TV serials and enjoyed their tea and chats!

 

Special Observations on Puducherry

 

The study also focuses on the comparative performance of the SHG's in Puducherry in comparison with some of the successful MF enterprises in other parts of India.

 

Puducherry being a Union Territory has the advantage of being a credit surplus state as it enjoys the bounties of the State and Central government towards the economic empowerment of its people in the bottom line of the society. As poverty is less this has made the people complacent and are not motivated to work hard for sustainable entrepreneurship efforts.

 

As for the MFI's their methodology in SHG selection does not follow a sharp and foolproof technique of group selection, formation and disbursement. Ideally the beneficiaries must  be selected after following a well defined process like :

Market Survey
Finding right people
Bringing them together
Training
Verification
Identifying a Group Leader and a vice group leader
Making sure they understand their Joint Liability

Due to their keenness to include as many people as possible , it has only resulted in overlapping memberships, multiple loans leading to debt trap.It was seen that the private MFI's unable to compete with the lucrative government schemes are closing their shops

The economic empowerment seen among the SHG's started by SKS Microfinance(Hyderabad) , Sulaxmi (Delhi) , MAS financial Services (Delhi) are due to both their innovative approaches and products as well as Continuous monitoring ,training , rigorous supervision. For  eg: Sulaxmi currently offers a range of micro loan products specially designed to suit their clients' need. Sulaxmi focuses on income generation loans while also taking care of other needs of their clients. Sulaxmi continuously analyzes the changing need and demand among its clients and re-designs or introduces new loan products accordingly.

While  Shuruaat (Rs. 3,000 - Rs. 10,000 )is a start up loan for the entrepreneurs at the early stage of their enterprise. Protsahan (Rs. 12,000 - Rs. 18,000 )is a promotional loan for struggling small enterprises , the Vikas(Rs. 20,000 - Rs. 28,000 )loan suggests that the borrower has clearly proven his/her zeal for success and Manzil (Rs. 30,000 - Rs. 50,000 )is the biggest available loan with the company which ultimately graduates the borrower to attract funds from banks and other big financial institutions.While the interest rate is 17.52% for all schemes with  repayment options of daily,  weekly and monthly. Here in Puducherry they do not know how to spend even a loan of Rs.5000 or more on productive purposes even though loans are comparatively cheaper.

Conclusions

Microfinance does not directly address some structural problems facing Indian society and the economy, and it is not yet as efficient as it will be when economies of scale are realised and a more supportive policy environment is created. Still, microfinance is one of the few market-based, scaleable anti-poverty solutions that is in place in India today, and the argument to scale it up to meet the overwhelming need is compelling. MF in India can put the poor on the roads of prosperity by following some simple guidelines as :

• There should be a sense of responsibility in the staff of all the MFIs and proper training should be given to them.
• There should be more focus on the literacy of the borrowers to make them more aware and also to make the proper use of the loan taken.
• One way of expanding the successful operation of microfinance institutions in the informal sector is through strengthened linkages with their formal sector counterparts. A mutually beneficial partnership should be based on comparative strengths of each sectors.
• A partnership should also be established between the  other industries and MFI's in creating self employable opportunities through subsidised raw materials , business offers , marketing assistance etc.
• The   organizations involved in micro credit initiatives should take account of the fact that: credit cannot by itself enable very poor women to overcome their poverty. In situations of chronic poverty it is more important to provide saving services than to offer credit.
• The use of technology is another important aspect of the Indian MFIs and technological solutions such as branchless banking is needed. For eg. SEWA and Swadhaar are using biometric smart cards to make it easier for their members to operate savings accounts through ATMs.

 

"If you are uplifting the poor, you are uplifting the nation" said Gandhiji. Today this vision needs to achieved by scaling up the intervention of Microfinance services - by unleashing the entrepreneurial talent of the poor with assistance from MFIs - we will slowly but surely transform India in ways we can only imagine today.

 

 

________________________________________________________________________

References:

Books and Reports:

Patel Praful (2005), "Microfinance In South Asia, Today And Tomorrow" Report On Regional Conference, World Bank Group.

Singh Sukhwinder (2005),The Microfinance India Conference And A Look At An Expanding Market, Financial Sector Team, Policy Division, DFID.

Thorat Y.S.P (2005), "Microfinance In India : Sectoral Issues And Challenges", Theme Paper At The High Level Policy Conference On Microfinance In India, New Delhi 03 To 05 May 2005

 

Journals /magazine / Newspaper articles:

Aiyar SA.(2009), "How Micro-Finance Institutions Beat Nationalized Banks" The Business Line, July 26.

Bhagat Rasheeda (2009),"There Is Profit All Around", The Business Line' August 21

Borpuzari Pranbihanga(2009), "Cash In On Microfinance", Entrepreneur , Pg:48-49 , November Edition

Murali D. (2009), "Reaching Microfinance To The Poor", The Hindu, October 24.

Naga Shridhar G. & Somasekharan M.(200), "Nest Or Trap?" The Business Line' November 13

.

Websites :

www.ifmr.ac.in/cmf

www.sulaxmi.com

www.microfinanceindia.org/annual-microfinance-india-summit-2009

www.microfinance.org

 

About the Author

Mrs. A.Bharathy

Lecturer, Department of Management &

Ph. D Research scholar @ Dravidian University

Pondicherry University community College

Lawspet , Pondicherry  605008

SKS MOUNT $26.99 SKS Mount Installs on the SKS rifle by replacing the rear receiver cover

Lenovo Rmk X3520M2 RackMount Kit 46C7859 $80.96 Lenovo Rmk X3520M2 RackMount Kit 46C7859

Cabletron Rack Mount Kit for 7C04-R 7C04-R-RMK $9.05 Cabletron Rack Mount Kit for 7C04-R 7C04-R-RMK

valcom SMA-RMK Rack Mount $16.99 Valcom Amplifiers Series: SMA SMB Rack Mount SMA-RMK SMA-RMK Rack Mount Kit Valcom, Inc valcom www.valcom.com

SKS Mount $64.42 SKS Mount Installs on the SKS rifle by replacing the rear receiver cover.Rail Type: Weaver Rail Length: 3.4 Inches Material: Steel Color/Finish: Black/Matte Applicable Firearm: SKS Rifles

Yakima SKS Lock Cores $35.77 Yakima Bike Rack Accessories in stock now! Read Yakima SKS Lock Cores customer reviews. AutoAccessoriesGarage.com has the best selection of Yakima Bike Racks at the lowest prices around. Yakima SKS Lock Cores are chosen by auto enthusiasts everywhere to personalize their vehicles. Yakima SKS Lock Cores available now at AutoAccessoriesGarage.

SKS Shock Board Fender $14 SKS Shock Board Fender. Keep YOU and YOUR BIKE clean and free of debris with this bike fender.

SKS Raceblade Fenders $59.99 SKS Raceblade Fenders. Need bicycle fenders, but tired of the hassle involved in taking them on and off?

SKS X-Blade Fender $29.99 SKS X-Blade Fender. This bicycle fender offers mud and road spray protection that's easy to mount.

SENCO YK0376 Repair Kit for SFN1, SKS & SPS $59.99 Repair Kit for SFN1, SKS & SPS - YK0376

SKS Bottle Cage Adapter $9.99 SKS Bottle Cage Adapter. Quench your thirst anyway you want with the SKS bottle cage adapter. It mounts a water bottle cage to your seatpost, stem, top tube or anywhere else on your bike. Adjust the angle to your liking, insert your water bottle and you're ready to go.

SKS Riflescope Mount $53.65 These BARSKA bases are designed to provide you with solid performance in the field. T6 Aluminum construction results in durability and lighter weight while the rugged cross slot bolts secure the bracket to provide extreme rigidity. These bases permit the mounting of a variety of firearms from SKS to AR-15, M16 to M4 Carbine and many more. Backed by the manufacturer's 1 Year Limited WarrantyFEATURES:Specially for SKS rifles.Weaver type rail mount.Made of steel.Rail length: 3.4 inches.Durable and rugged.PRODUCT SPECIFICATIONS:Rail Type: WeaverRail Length: 3.4" Material: SteelApplicable Firearms: SKS Rifles

SKS Crusher Front Fender $29 SKS Crusher Front Fender. Downhillers and freeriders will love the Crusher front fender. Impact-resistant construction maximizes spray protection and looks great on your suspension fork.

SKS Raceblade XL Fenders $49.99 SKS Raceblade XL Fenders. Designed for fitness, street, touring and cross bikes, the Raceblade XL fenders provide excellent protection from dirt and spray. Featherweight construction with an aerodynamic shape enhances speed. Includes mud flaps.

SKS Gas Tube Weaver Scope Mount $39.99 Product Features:Sks Gas Tube Weaver Style Mount Replaces Existing Sks Gas Tube Weight: 8.9 Oz. Length: 9.6 Inches

SKS P35 Fenders $36.99 SKS P35 Fenders. Protect your bike from mud, dirt and rain with the P35 fenders. Chromoplastic construction is nearly weightless, yet extremely strong. Secu-Clip releases the stays if an object gets caught in your front tire, preventing an over-the-bar crash.

SKS Airchecker Digital Pressure Gauge $24.99 SKS Airchecker Digital Pressure Gauge. Get quick, precise and accurate tire pressure readings with the SKS Airchecker digital pressure gauge. Swivel head for convenience. Large back-lit display is easy to read from any angle.

Yakima SKS Lock Cores 8007202 $35.77 Yakima Bike Rack Accessories in stock now! Read Yakima SKS Lock Cores 8007202 customer reviews. AutoAccessoriesGarage.com has the best selection of Yakima Bike Racks at the lowest prices around. Yakima SKS Lock Cores 8007202 are chosen by auto enthusiasts everywhere to personalize their vehicles. Yakima SKS Lock Cores available now at AutoAccessoriesGarage.

Yakima SKS Lock Cores 8007204 $53.9 Yakima Bike Rack Accessories in stock now! Read Yakima SKS Lock Cores 8007204 customer reviews. AutoAccessoriesGarage.com has the best selection of Yakima Bike Racks at the lowest prices around. Yakima SKS Lock Cores 8007204 are chosen by auto enthusiasts everywhere to personalize their vehicles. Yakima SKS Lock Cores available now at AutoAccessoriesGarage.

Yakima SKS Lock Cores 8007206 $67.52 Yakima Bike Rack Accessories in stock now! Read Yakima SKS Lock Cores 8007206 customer reviews. AutoAccessoriesGarage.com has the best selection of Yakima Bike Racks at the lowest prices around. Yakima SKS Lock Cores 8007206 are chosen by auto enthusiasts everywhere to personalize their vehicles. Yakima SKS Lock Cores available now at AutoAccessoriesGarage.

RMK 7202BL Water DispenserBlue $26.33 Great for keeping water or your favorite drink nearby. Dimensions:. Length:. Width: 5.5 . Height: 9.5

RMK 7202GR Water DispenserGreen $26.33 Great for keeping water or your favorite drink nearby. Dimensions:. Length:. Width: 5.5 . Height: 9.5

RMK 7202OR Water DispenserOrange $26.33 Great for keeping water or your favorite drink nearby. Dimensions:. Length:. Width: 5.5 . Height: 9.5

SKS Raceblade Long Fenders $59.99 SKS Raceblade Long Fenders. div align=centeriframe width=350 height=208 src=http://www.youtube.com/embed/XtofnuaXh7U?rel=0 frameborder=0 allowfullscreen/iframe/divbr /br / The Raceblade Long fenders provide complete protection from mud, dirt and rain. Lengthy mud flaps extend below the hub axle to shield you and the cyclist behind you from splashing. Fenders mount to most racing bikes and are easy to adjust. Featherweight construction with an aerodynamic shape enhances speed.

AGI X0067D DVDAGI: SKS Rifles $51.22 The SKS has taken the USA by storm. Fast handling low cost and reliable these rifles have been imported from China and Russia by the tens of thousands. Our cutaway closeups will show you how this system inspired but differs from the AK47 and AKS. Due to current bans on importation spare parts may be hard to get and fitting them requires special considerations which this course covers in detail. There are numerous accessories for the SKS however some (such as adding a folding stock) might make the rifle illegal Find our how to keep yourself safe and legal. Improving the accuracy of your SKS is also covered.

Advanced Tech SKS0500 Rubber SKS ButtPad Black $22.95 Fits SKS Ultralight Stocks and Side Folding Shotgun Stocks. Simply slipon. Absorbs recoil. Adds 1 length.

SKS Bayonet Bipod $62.5 To make consistently accurate shots critical last-second adjustments to the rifle’s position is usually always required along with a stable rest. With this in mind, we created our newest line of bipod models with features that allow you to easily set up and make these necessary adjustments. These bipods fit AR-15 and SKS rifles and also include a universal model that will fit an almost unlimited choice of rifle types. Backed by the manufacturer's 1 Year Limited WarrantyFEATURES:Clamps directly to the BAYONET LUG (RIFLE MUST HAVE BAYONET AND IT MUST BE REMOVED FOR BIPOD TO WORK!)Spring-loaded bipod deploys instantly and folds securely when not in use.Has telescoping legs and will extend from 8.50-13.50 inches in 3/4" lengths.Greatly improves accuracy and consistency.Each leg can be adjusted individually so can easily adjust it for uneven terrain.PRODUCT SPECIFICATIONS:Adjustable Height: 9.5"~15.50"Material: SteelApplicable Firearms: SKS Rifles wit Bayonet Lug

Gun Digest Book of AK & SKS $24.99 Headline: Everything You Need to Know About the Most Popular Weapons in History! For more than half a century, the Kalashnikov AK-47 has been the most famous battle rifle in the world.Today, the AK-47 continues to be the rifle of choice, not only for many of the world's armed forces, but for thousands of civilian shooters in the United States. In The Gun Digest Book of the AK & SKS: A Complete Guide to Guns, Gear and Ammunication, best-selling author Patrick Sweeney gives the complete lowdown on the AK-47 and its variants. It's all here: tips on building an AK, choosing ammunition and accessories, keeping your AK perking for years to come, and much more. As a bonus, there's a section dealing with the "other" great Soviet rifle, the Simonov SKS! The One Book on the AK and SKS That's Got Everything You Need and Much More! - Hundreds of detailed photos - Step-by-step gunsmithing procedures - Money-saving tips and techniques Written as only Patrick Sweeney can, The Gun Digest Book of the AK & SKS is a must-have volume for anyone who's interested in teh SKS and Cold War weaponry!

4X32 CONTOUR,SKS SCOPE,30/30,BLK $74.99 4x32 Compact Contour, Blk Matte, 30/30 Reticle SKS Base and rings, 1/4" MOA, 100% waterproof, fogproof and shockproof, Fully Coated optics, Compact in size and low magnification making them adaptable to a wide variety of shooting activities, Extra rigid shockproof construction

SKS X-3 X-Tra-Dry Fender $12.99 SKS X-3 X-Tra-Dry Fender. Protect your backside from wheel spray with this bike fender, even if you've got full suspension.

Nc Star Amsks Sks Short Muzzle BrakePinOn $21.34 Replaces front sight pin on most SKS barrels. Satisfaction ensured. Constructed with the best materials and components. Color: Black. Dimensions: 2.12 D.

FM FMSKS Sks Saddle Type Scope Mount $32.33 This item may need to be fitted by a gunsmith replaces dust cover on sks s. Steel construction. Type: Saddle type mount. Finish: Black matte.

AK/SKS FRONT SIGHT ADJUSTMENT TOOL $9.99 AK/SKS Front Sight Adjustment Tool: Designed to adjust the front sight for elevation and windage. Solves the problems associated with sighting in SKS rifles and carbines. These parts products are made of high-strength Carbon Steel and is designed for years of use. Material: Carbon Steel Color/Finish: Black/Matte Applicable Firearms: AK/SKS Warranty: Manufacturer 60 Days Limited

SKS Receiver Cover Tri-Rail Weaver Scope Mount $39.99 Product Features: Tactical Sks Weaver Style Tri-Rail and Receiver Cover Replaces Existing Sks Receiver Cover Adjustable Side Weaver Tabs Weight: 9.6 Oz. Length: 4.8 Inches

RMK 4789SHBL Mini Shopping CartBlue $22.28 This chromeplated scale model of a real shopping cart can be used for storing office supplies and it looks great sitting on your desk. Features rolling wheels and movable parts. Dimensions:. Length: 5.75 . Width: 5.5 . Height: 3.75

RMK 4789SHPU Mini Shopping CartPurple $22.28 This chromeplated scale model of a real shopping cart can be used for storing office supplies and it looks great sitting on your desk. Features rolling wheels and movable parts. Dimensions:. Length: 5.75 . Width: 5.5 . Height: 3.75