Out of the 6.7 billion in the world, 3 billion people live
on less than USD 2 per day (ILO).
80% of the world’s population has no access to financial services(GDRC).
India is the world’s largest microfinance market where more
than 600 million people live on less than US$1.50 a day (Report
by CGAP and JPMorgan Chase & Co)
Indian Microfinance Industry
to cross 110 million clients and $30 billion in loan portfolio by
2014. ( Intellecap)
As on 31 March
2009, there are more than 61 lakh saving-linked SHGs and more than
42 lakh credit-linked SHGs and thus, about 8.6 crore poor households
are covered under the programme.
Self Help Group
(SHG) - Bank Linkage
Savings of SHGs with Banks As on 31 March 2009, total 61,21,147
SHGs were having saving bank accounts with the banking sector with
outstanding savings of Rs. 5,545.62 crore as against 50,09,794 SHGs
having savings of Rs. 3785.39 crore as on 31 March 2008, thereby
having growth rate of 22.2% and 46.5% respectively. Thus, more than
8.6 crore poor households were associated with banking agencies
under SHG-Bank Linkage Programme. As on 31 March 2009, the Commercial
Banks had the maximum share of SHGs’ savings of 35,49,509
SHGs (58%) with savings amount of Rs. 2772.99 crore (50%) followed
by Regional Rural Banks having savings bank accounts of 16,28,588
SHGs (26.6%) with savings amount of Rs. 1989.75 crore (35.9%) and
Cooperative Banks having savings bank accounts of 9,43,050 SHGs
(15.4%) with savings amount of Rs. 782.88 crore (14.1%).
The share under SGSY in the total savings was 15,05,581 SHGs with
savings of Rs.1,563.39
crore forming 24.6 % of the total SHGs having savings accounts with
the banks and 28.1% of total savings amount.
During the year under review,
the average savings per SHG with all banks had increased from Rs
7,556 as on 31 March 2008 to Rs. 9,060 as on 31 March 2009. It varied
from as high of Rs.12,218 per SHG with RRBs to as low of Rs. 7,812
per SHG with Commercial Banks. As on 31 March 2009, the share of
women SHGs in the total SHGs with saving bank accounts was 48,63,921
SHGs forming 79.46 % as compared to the last year’s share
During the year 2008-09, the
banks fi nanced 16,09,586 SHGs, including repeat loan to the existing
SHGs, with bank loan of Rs. 12,253.51 crore as against 12,27,770
SHGs with bank loan of Rs. 8,849.26 crore during 2007-08 registering
a growth rate of 31.1% (No. of SHGs) and 38.5% (Bank Loan disbursed).
Out of the total loans disbursed during 2008-09, SHGs fi nanced
under SGSY were 2,64,653 (24.6%) with bank loan of Rs. 2015.22 crore
(28.2%) as against 2,46,649 SHGs (20%) with bank loan of Rs. 1857.74
crore (21%) during 2007-08.
During 2008-09, average bank
loan disbursed per SHG was Rs.76,128 as against Rs.72,060 during
2007- 08. The average loan per SHG ranged from as high of Rs. 80,237
per SHG by Commercial Banks to as low of Rs.50,117 per SHG by Cooperative
Bank Loans outstanding
As on 31 March 2009, total number of 42,24,338 SHGs were having
outstanding bank loans of Rs. 22,679.85 crore as against 36,25,941
SHGs with bank loans of Rs. 16999.90 crore as on 31 March 2008 with
a growth rate of 16.5 % (No. of SHGs) and 33.4% (Bank Loan outstanding
with SHGs). The share of SHGs under SGSY was 9,76,887 SHGs (23.1%)
with outstanding bank loans of Rs. 5,861.72 crore (25.8%) as against
6,16,978 groups (25.2%) with outstanding bank loans of Rs. 4,816.87
crore (28.05%) as on 31 March 2008.
(NPAs) of Bank Loans to SHGs
As on 31 March 2009, totally 292 banks had reported data on NPAs.
Based on the data, NPAs to total bank loans outstanding against
SHGs were 2.9%, which amounted to Rs.625.86 crore. Whereas, during
2007-08, it was Rs 422.93 crore, which was also
2.9% of total bank loans outstanding against SHGs. Incase of SHGs
under SGSY, as reported by 165 banks, NPAs to total bank loans outstanding
against SHGs were 5%, which amounted to Rs. 244.45 crore, as on
31 March 2009
of Bank Loans to SHGs
On the basis of data reported by banks, out of 267
banks which have reported the recovery data, 181 banks (67.8%) had
more than 80% recovery of SHG loans as on 31 March 2009 which is
observed to be the same as on 31 March 2008.
SHGs – Micro Finance Institutions (MFI)-Bank Linkage
During the year 2008-09, the banks financed 581 MFIs
with bank loans of Rs. 3,732.33 crore as against 518 MFIs with bank
loans of Rs. 1,970.15 crore during 2007-08, thus achieving a growth
rate of 12.2% (No. of MFIs) and 89.4% (Bank Loans disbursed to MFIs).
As on 31 March 2009, the outstanding bank loans to 1915 MFIs was
Rs. 5009.09 crore as against Rs. 2748.84 crore to 1109 MFIs as on
31 March 2008
30% of all microfinance equity transactions worldwide in 2009 took
place in India (CGAP/J.P. Morgan)
The sector accounted for 40% of all Private Equity deals in the
past 18 months. There were 11 PE deals worth 178 million during
the financial year 2009, compared to three deals worth $52 million
in 2008.(Venture Intelligence).
MFIs in the country have managed
to provide finance to over 2.2 crore poor rural households. While
the total outstanding MFIs in the country is around Rs 30,000 crore,
defaults are in the range of 1-1.5%
The Indian micro finance industry (MFI) would cross 11 crore borrowers
and Rs 135,000 crore ($30 billion) in loan portfolio by 2014 and
will require a huge capital inflow both in debt and equity, according
to a latest report by Intellecap. The Indian micro finance industry
(MFI) would cross 11 crore borrowers and Rs 135,000 crore ($30 billion)
in loan portfolio by 2014 and will require a huge capital inflow
both in debt and equity, according to a latest report by Intellecap.
During 2008-09, 10.81 lakh new
SHG were credit linked and bank loan of Rs.11,132 crore
disbursed. The programme has covered more than 7.01 crore poor households,
making it the largest micro-Finance (mF) programme in the world.
As on 31 March 2008, 50.09 lakh SHG maintained savings worth Rs.3,785
crore with the banking sector. During 2007-08, bank credit of Rs.8,849
crore and Rs.1,970 crore was disbursed to 12.27 lakh SHG
(including 2.46 lakh under SGSY) and 518 MFI, respectively.
10,000 microfinance institutions provide funding to 150 million
active clients, 3/4 of who are women. An estimated 500 million potential
microfinance clients are yet to be reached (Planet Finance).
Fewer than 2 % of poor people have access to financial services
(credit or savings) from sources other than money lenders. (Data
Snapshots on Microfinance - The Virtual Library on Microcredit).
The Microcredit Summit estimates that Rs 1015 billion (USD 21.6
billion) is needed to provide microfinance to 100 million of the
world's poorest families. The Summit planners say it should be possible
to raise USD 2 billion from borrowers' savings alone. The final
figure may be even higher. (Data Snapshots on Microfinance - The
Virtual Library on Microcredit).
There is a potential demand for microsaving services from 19 million
savers. (Data Snapshots on Microfinance - The Virtual Library on
Studies of the impact of microcredit in more than 24 countries found
dramatic improvements in household income levels. These improvements
took place primarily through growth in the borrower's business,
which translated into increased household income. The studies found
that access to microcredit allowed the borrower to increase the
number of goods or services sold and reduce the costs of supplies
and raw materials. As a result, sales increased and profits grew
from 25% to 40% (Unitus).
The statistics on financial exclusion in India are disheartening.
Out of the 600,000 habitations in the country, only about 30,000,
or just 5 percent, have a commercial bank branch. Just about 40
per cent of the population across the country have bank accounts,
and this ratio is much lower in the north-east of the country. The
proportion of people having any kind of life insurance cover is
as low as 10 per cent, and the proportion having non-life insurance
is an abysmally low 0.6 per cent. People having debit cards comprise
only 13 per cent and those having credit cards a marginal 2 per
the speech of the RBI Governor