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Impact of Financial stability of Banks on Financial Inclusion in India Apurv yadav PGP/18/287 Business Research Methods Proposal

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  • Impact of Financial stability of Banks on Financial

    Inclusion in India

    Apurv yadav PGP/18/287

    Business Research Methods Proposal

  • [email protected]

    Abstract:

    This paper examines the impact of Financial stability of banks on

    financial inclusion. Given the fact that the Indian Economy has

    been growing at 6-8% per annum but at the same we are facing

    rising disparity between rich and poor. This means that though we

    have been able to control poverty but fruits of growth are not

    equally distributed. Governments focus was initially increasing

    productivity thus drafted schemes to provide credit but after

    launching financial reforms in 19991 we saw sudden regulation to

    improve the financial health of the banks. This paper also includes

    a rich theoretical framework in terms of the academic research

    done on the effect of financial stability on financial inclusion in India.

    The research would make use of both Primary and Secondary Data

    from banks throughout India. Both public and private sector banks

    would be covered. The nature of data collected would be qualitative

    as well as quantitative in nature. The paper looks into the key

    trends in financial sector like Micro finance institutions and

    contribution of them to achieve financial inclusion. The paper

    concludes by saying that to realize Indias Banks full potential

    in terms of reach, a lot of parameters such as systematic

    reformation of Banking sector, cumulative synergies of financial

    institutions, government needs to be worked on.

    Introduction (Problem Description)

    India is a country where majority of the population still depends up

    on agriculture heavily. Describing India, the AIRCS had said, India

    is essentially Rural India and Rural India is virtually the cultivator,

    the village handicraftsman and the agricultural laborer.

    Independent India adopted developmental strategy focusing on

    enhancing production and productivity. To achieve these

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    objectives, the stance of policy towards rural credit was to ensure

    provision of sufficient and timely credit at reasonable rates of

    interest to as large a segment of the rural population as possible.

    The strategy was based on expansion of the institutional structure,

    directed lending to disadvantaged borrowers and sectors and lower

    interest rates. The chosen institutional vehicles for the task were

    cooperatives, commercial banks and Regional Rural Banks and

    government was to some extent successful in achieving its target

    as the growth of credit during 1970-95 in real terms at 7 percent

    was greater than the annual growth in GDP, Real public agricultural

    capital formation at 3 per cent, Real private agricultural capital

    formation at 4 per cent, Real agricultural input spending at 6 per

    cent. However in the recent times, the policies adopted by RRBs,

    commercial banks are more focused on improving balance sheet

    rather than serving their basic purpose of providing easy and

    simple credit to poor and needy farmers.

    Problem Definition

    Banks focus on financial sustainability can be attributed to a lot of

    factors like:

    Improved return on assets

    Increased commercial freedom

    Growing Capital adequacy

    Neglect of small and marginal farmers

    Attention to qualitative aspects of lending

    Increased profitability

    Gained freedom to invest in the money market

    All these factors imply that commercial banks, RRB started given

    more weightage to financial indicators of performance. However,

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    much of this turnaround has resulted from shift to investment in

    government bonds and loans to the non-poor in rural areas. The

    focus on financial sustainability has cost outreach dearly. Recent

    years have witnessed a sharp decline in the share of rural and

    small loans in the portfolio of the banks.

    Problem Structuring

    Behavior over Time Graph

    Following are the variables:

    Capital freedom

    Capital adequacy

    Return on assets

    Financial inclusion

    Neglect of small and marginal farmers

    Attention to qualitative aspect of lending

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    Financial inclusion Capital

    Freedom

    Capital Adequacy

    Return on Assets

    Neglect of small and

    marginal farmers

    Attention to qualitative

    aspect of lending

    Theoretical Explanation of the BOT Graph

    It is observed that Financial stability of Public and Private sector

    banks has been improving over the time and this could be further

    reinforced by improvement in return on assets, profitability, capital

    adequacy of banks. However, financial stability of banks is

    achieved at the cost of wider outreach of banks as small and

    marginal farmers are neglected and thus informal credit market is

    strengthened day by day. In fact, financial inclusion has been

    decreasing.

    Time

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    Stakeholder Chart

    Government

    Public and Private sector Banks

    Micro finance

    institutions

    Regulatory authority

    Customers

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    Specific Stakeholder chart

    Government:Central

    State

    Panchayat

    Customers:Rich Farmers

    Small and Marginal Farmers

    General Borrowers

    Public and Private sector banks:

    RRB

    Schdelued commercial Banks

    Cooperative Banks

    Regulatory authority:

    NABARDRBI

    Micro Finance Institutions:SEWABandhan

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    Research Objective and Research Questions

    Research Objective

    The overall objective of research is to suggest ways to improve the

    contribution of banks towards achieving financial inclusion which

    has been declining and much skewed in the light of reforms

    initiated by central government over the last 7-8 years.

    Research Questions

    What are the factors which impediment Financial inclusion in

    India?

    How Financial stability of Banks affects broader goal of

    providing cheap credit to rural, poor household?

    How is Financial stability of Banks related to Financial

    inclusion?

    What measures are needed to be taken to fully realize Indias

    banking network potential?

    How Micro-Finance could bridge the existing gap between

    demand and supply of credit?

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    Literature review

    The basic aim of the financial sector reforms was to improve the soundness, efficiency and productivity of all credit institutions, including rural credit institutions whose financial health was far from satisfactory. The reforms sought to enhance the areas of commercial freedom, increase their outreach to the poor and stimulate additional flows to the sector. The reform programme also included far reaching changes in the incentive regime through liberalizing interest rates for cooperatives and RRBs, relaxing controls on where, for what purpose and whom rural financial institutions [RFIs] could lend, introducing prudential norms and restructuring and recapitalizing of RRBs. [1] Over its entire lifetime, the formal rural banking system in India has struggled to balance the dual objectives of outreach and financial performance. A post -reform shift in focus has benefited the latter only at the expense of the former. Over its entire lifetime, the formal rural banking system in India has struggled to balance the dual objectives of outreach and financial performance. A post -reform shift in focus has benefited the latter only at the expense of the former.[2] Besley (1994) examines the view that credit market interventions should be restricted to cases where a market failure has been identified, given reports of financial repression. A case in point is government regulations to hold interest rates on loans below market clearing levels. Without a market clearing mechanism, savings and credit are misallocated. Many of these policies were not consistent with helping the poor. The default rates were high, and much of the benefits of credit subsidies accrued to the wealthier farmers.[3]

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    A market failure occurs when a competitive market fails to achieve

    an efficient allocation of credit. Loans are traded competitively

    and the interest rate is determined by supply and demand. A

    Pareto efficient outcome for credit is when the loans cannot

    be reallocated to make one individual better off without making

    another worse off. Failure to repay a loan either because of a

    contingency or unwillingness to pay require a legal enforcement

    framework. But if the costs of enforcement are high, a lender may

    cease to lend. Another difficulty is informational imperfections.

    Willingness to lend depends on the reliability of the borrower and

    on the likelihood of the borrower using the funds wisely.

    Absence of such Information is an impediment to lending to

    some.[4]

    As monitoring is not costless and enforcement and information are far from perfect, a constrained Pareto efficiency criterion is invoked.This allows for the full set of feasibility constraints. So a market failure occurs when the credit allocation is not constrained Pareto efficient. Markets also operate inefficiently when there are externalities. Three features of rural credit markets are salient. (a) Collateral that could be seized if the borrower defaults is typically scarce in rural areas. The borrowers are too poor to have assets that could be collaterised. This difficulty is exacerbated by the absence of well- defined property rights that come in the way of appropriating collateral in the event of a default. (b) Lack of literacy, and weak communications tend to make formal bank arrangements costly for many individuals. Absence of complementary markets such as insurance Markets compounds the repayment problems. If individuals could insure against Income volatility, the default may be less of a problem.

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    (c) A related but distinct feature is that agriculture on which large segments of the rural population still depend for their livelihood is prone to weather shocks, and volatility of market prices that affect whole regions. Such shocks result in large-scale defaults. This problem is exacerbated if large groups withdraw their savings at the same time. If lenders loan portfolios were more diversified, the severity of these risks would be considerably lower. In fact, however, rural credit markets tend to be segmented in the sense that a lenders portfolio is concentrated on a group of borrowers that face a common income shock-either because they are concentrated in one geographic region, or because they produce a particular crop, or because they belong to a particular kinship group.[5] Segmented credit markets depend on informal credit, such as local money lenders, friends and relatives, rotating credit and savings associations that use local information and enforcement mechanisms. As a result of segmentation, funds fail to flow across regions or groups of individuals despite potential gains from doing so, as credit needs differ across locations. For example, a drought may require credit to diversify livelihoods. Deposit retention schemes that require a percentage of deposits to be reinvested in the same region further exacerbate the segmentation. Optimal financial intermediation involves a trade-off: while local lenders have better information and may be more accountable to their depositors than large, national lenders, the latter have better access to more diversified portfolios. [6] Overall, the concerns in relation to rural credit other than those relating to structural issues - are generally expressed in terms of-

    Inadequacy of credit

    Constraints on timely availability of credit

    High interest rates

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    Neglect of small and marginal farmers

    Merging and revamping of RRBs that are predominantly located in tribal/ backward regions is seen as a potentially significant institutional arrangement for financing the excluded. Such an exercise is currently on and the State Governments and Sponsor Banks have to come together and cooperate in this area. [7] Lets focus on the whole issue those who are financially excluded in the rural areas and the extant institutional response to them. The survey data point out that of the 147.90 million rural

    households in the country, around 89.35 million households or

    roughly 60% are cultivator households. Of these cultivator

    households, 48.6% translating into 43.40 million households are

    indebted to either formal sources or non-formal sources or to both.

    By implication, nearly 51% of cultivator households translating into

    45.95 million households or over 200 million, poor are not indebted

    at all. It is pertinent to note that in the non-indebted category, 88%

    of the households are headed by SF/MFs with farm holdings of less

    than 2 hectares. [8]

    Financial inclusion refers to delivery of financial services at an affordable cost in a fair and transparent terms and conditions to vast sections of disadvantages, weaker and low income groups including household enterprise, small medium enterprise and traders. It not only enhances overall financial intensity of agriculture but also help in increasing rural nonfarm activities which lead to development of rural economy and improve economic condition of people. Financial inclusion include micro credit, branchless banking, no- frills bank accounts, saving products, pension for old age, microfinance,self help group, entrepreneurial credit etc. In short Financial Inclusion is: NFA + Banks+ OFIs+ MFI+ IT = Financial Inclusion

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    Where, NFA - No frills bank account OFIs - Other financial Institutions MFI - Micro financial Institutions IT Information Technology Thus, financial inclusion needed for equal opportunities to all section of people in country, inclusive growth, economic development, social development and business opportunity. Around 45% of Indian population suffers from poverty and hunger in which only 31% has access banking services and 80% populations are without life, on-life and health insurance etc. Due to seeking vast opportunity of Growth of Indian banking system Indias national vision for 2020 has mission to open nearly 600 million new customers banks account and services through a variety of channels as micro finance, micro insurance, Regional rural banks, NABARD, Self-help groups, new bank branches in unbanked areas etc.[9] The financially excluded sections largely comprises of marginal farmers, landless labourers, self-employed and unorganized sector enterprises, urban slum dwellers, migrants, ethnic minorities and socially excluded groups, senior citizens and women. The majority of the group included those people living in rural areas and inaccessible to financial services. [10] Consequences of financial exclusion will vary depending on the nature and extent of services denied. It may lead to increased travel requirements, higher incidence of crime, general decline in investment, difficulties in gaining access to credit or getting credit from informal sources at exorbitant rates, and increased unemployment, etc. The small business may suffer due to loss of access to middle class and higher-income consumers, higher cash handling costs, delays in remittances of money. According to certain researches, financial exclusion can lead to social exclusion. [11]

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    An interesting feature which emerges from the international practice is that the more developed the society is, the greater the thrust on empowerment of the common person and low income groups. It may be worthwhile to have a look at the international experience in tackling the problem of financial exclusion so that we can learn from the international experience. In UK, one out of 12 households do not have basic current account with any bank. The Financial Inclusion Task Force in UK has identified three priority areas for the purpose of financial inclusion, viz., access to banking, access to affordable credit and access to free face-to-face money advice. UK has established a Financial Inclusion Fund to promote financial inclusion and assigned responsibility to banks and credit unions in removing financial exclusion. Basic bank no frills accounts have been introduced. An enhanced legislative environment for credit unions has been established, accompanied by tighter regulations to ensure greater protection for investors. A Post Office Card Account (POCA) has been created for those who are unable or unwilling to access a basic bank account. The concept of a Savings Gateway has been piloted. This offers those on low-income employment 1 from the state for every 1 they invest, up to a maximum of 25 per month. In addition the Community Finance Learning Initiatives (CFLIs) were also introduced with a view to promoting basic financial literacy among housing association tenants. [12] In USA, among the low income families, 22percent do not have either a current or savings account. The USA government has taken various measures to deal with the problem of financial inclusion. A civil rights law, namely Community Reinvestment Act (CRA) in the United States prohibits discrimination by banks against low and moderate income neighbourhoods. The CRA imposes an affirmative and continuing obligations on banks to serve the needs for credit and banking services of all the

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    communities in which they are chartered. In fact, numerous studies conducted by Federal Reserve and Harvard University demonstrated that CRA lending is a win-win proposition and profitable to banks. In this context, it is also interesting to know the other initiative taken by a state in the United States. Apart from the CRA experiment, armed with the sanction of Banking Law, the State of New York Banking Department, with the objective of making available the low cost banking services to consumers, made mandatory that each banking institution shall offer basic banking account and in case of credit unions the basic share draft account, which is in the nature of low cost account with minimum facilities. An interesting feature of basic banking account scheme is the element of transparency i.e. the banking institution should, prior to opening the account, furnish a written disclosure to the account holder describing the main features of the scheme i.e. the initial deposit amount required to open the account, minimum balance to be maintained, charge per periodic cycle for use of such account, maximum number of withdrawal transactions without any additional charge and other charges imposed on transactions for availing electronic facility not operated by the account holders banking institution, etc. [13] In France, as per the 1984 Banking Act, any person refused a bank

    account can approach the Bank of France, which will identify and

    nominate an institution to provide thebank account. In 1992, French

    banks signed a charter undertaking to open bank accounts at an

    affordable cost with related payment facilities to all.

    Thus, it is observed that even in developed countries, the State has

    accepted financial inclusion as an important measure for socio-

    economic development of the poor and disadvantaged groups.

    Various proactive and positive actions have been initiated by the

    Governments to deal with the problem of financial exclusion. [14]

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    The process of financial inclusion in India can broadly be classified

    into three phases.

    During the First Phase (1960-1990), the focus was on channeling

    of credit to the neglected sectors of the economy. Special

    emphasis was also laid on weaker sections of the society. Second

    Phase (1990-2005) focused mainly on strengthening the financial

    institutions as part of financial sector reforms. Financial inclusion in

    this phase was encouraged mainly by the introduction of Self- Help

    Group (SHG)-bank linkage programme in the early 1990s and

    Kisan Credit Cards (KCCs) for providing credit to farmers. The

    SHG-bank linkage programme was launched by National Bank for

    Agriculture and Rural Development (NABARD) in 1992, with policy

    support from the Reserve Bank, to facilitate collective decision

    making by the poor and provide door step banking. During the

    Third Phase (2005 onwards), the financial inclusion was explicitly

    made as a policy objective and thrust was on providing safe facility

    of savings deposits through no frills accounts. The Report

    Committee on Financial Inclusion headed by

    Dr.C.Rangarajan(2008) has observed that financial inclusion must

    be taken up in a mission mode and suggested a National Mission

    on Financial Inclusion (NMFI) comprising representation of all

    stakeholders for suggesting the overall policy changes required,

    and supporting stakeholders in the domain of public, private and

    NGO sectors in undertaking promotional initiatives. [15]

    World Bank study in April 2012, which had shown half of the worlds

    population held accounts with formal financial institutions. The

    study said only nine per cent of the population had taken new loans

    from a bank, credit union or microfinance institution in the past

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    year. In India, only 35 per cent have formal accounts versus an

    average of 41 per cent in developing economies. India also scored

    averagely in respect of credit cards, outstanding mortgage, health

    insurance, adult origination of new loans and mobile banking.

    Financial inclusion remains a substantially unfinished agenda,

    said the report. RBI has admitted that they have faced criticism

    from extreme votaries of strong interventionist policies to promote

    financial inclusion and it was argued that such directed lending

    rates leads to misallocation of resources. However, the central

    bank said it has striven to ensure a balance between equity and

    efficiency considerations so that financial inclusion is furthered

    while not compromising on the financial health and the lending

    capacities of the banks. [16]

    Latest figures indicate that there are over 110,000 business

    correspondents employed, which is not a large number in context

    of the number of banked villages, RBI said. However, the regulator

    said, they have taken several initiatives to make financial inclusion

    high on the agenda of Indian banking in the recent years. It required

    banks to provide no-frills account, tried to improve the outreach of

    banks through the business facilitator and business correspondent

    (BC) models and set up goals for banks to provide access to formal

    banking to all 74,414 villages with population over 2000.

    RBI also adopted the information, communication, technology-

    based agent bank model through BCs for door-step delivery of

    financial products and services since 2006. However, in its annual

    report, RBI said the BC model has not been effective in addressing

    financial inclusion needs. The model, by itself, cannot serve the

    financial inclusion objective. It cannot substitute the services and

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    the customer confidence that the brick and mortar bank branches

    provide, said RBI in the report. [17]

    Financial inclusion calls for significant investment in technology

    based applications, related research and development efforts,

    comprehensive MIS and monitoring and valuation systems. Banks,

    especially those who desire to have much longer exposure to

    under-banked/unbanked population could collaborate with

    technology service providers (TSPs), mobile network operators

    (MNOs), corporate houses and various categories of BCs to

    develop efficient delivery models. It is heartening to note that a few

    banks have also started taking initiatives with couple of them

    appointing Mobile Service Providers (MSP) to act as their BC. The

    strategy should aim to create a facilitating eco-system, leveraging

    on technology and promote partnerships of brick and mortar

    branches including ultra-small branches with the ICT based BC

    outlets for evolving an effective financial inclusion delivery

    mechanism. [18]

    Banks have to look at their policies and procedures to develop

    new product lines rather than merely adopting the complex

    products of urban India in the rural milieu. Providing simple and

    basic banking services in the form of deposit account with

    remittance services and small credit facility would ideally suffice for

    bringing the unbanked into the folds of banking system. This will

    require easy-to-understand documentation process, preferably in

    the vernacular language, sufficient to meet the legal requirements

    of the banking entity or the service provider. Innovations, however,

    should not be restricted merely to product designing. Given the fact

    that poor are generally susceptible to events that can adversely

    affect their already fragile livelihoods, more focus is required on

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    enhancing the staying power of the poor. Here comes the

    importance of insurance which need to be enmeshed with banking

    products in a seamless manner. Banks should institute systems of

    reward and recognition for personnel initiating, ideating, innovating

    and successfully executing new product initiatives and services in

    the rural areas. [19]

    Campaigns for spreading awareness about financial inclusion and

    financial literacy need to be intensified. This can be done through

    innovative dissemination channels including films, documentaries,

    pamphlets and road shows. Stakeholders, including the regulators

    and policy makers, may launch large scale awareness

    programmes. Reserve Bank of India is in the process of launching

    electronic Banking Awareness And Training (e-BAAT)

    programmes to increase awareness about technology enabled

    financial services. Initiatives need to be taken for including financial

    literacy as a regular curriculum in school syllabus. Training

    programmes for bank staff, particularly for the frontline staff, should

    include aspects relating to financial education of the customers.

    There is also a great need for certain amount of standardization of

    services/facilities extended by the Financial Literacy and Credit

    Counselling Centre (FLCC) being set up at several centre by the

    Lead Banks. Such facilities should cover the entire gamut of the

    requirements of the under-privileged/inadequately informed

    customers (e.g. basic financial concepts, appropriateness of

    savings ad credit products, use of credit cards, financial planning

    and debt management, retirement planning/micro-pension,

    insurance, investment, grievance redressal mechanism,

    awareness about electronic banking and the safeguards to be

    followed, etc.). It is hoped that the efforts to evolve a nationwide

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    strategy of financial literacy involving all the financial sector

    regulators across banking, insurance, capital market and pension

    products would bear the fruits. [20]

    Proposed Methodology and Methods

    Methodology

    The research would make use of both Primary and Secondary

    Data from banks, farmers throughout India. Both public and

    private sector banks would be covered. The nature of data

    collected would be qualitative as well as quantitative in nature. The

    methods of collection would include questionnaires and personal

    interviews.

    Methods

    1. Personal Interviews

    A total of around 60 private & public sectors banks would

    be interviewed . Personal interviews would be conducted

    with the branch manager of the various rural banks and the

    average time period per interview would be approximately

    an hour.

    The interview would gauge the following:

    Level and Scope of Financial inclusion

    Reason for neglecting small and marginal farmers

    Strength of informal credit market

    Strategies followed by banks to achieve financial stability

    Scope of Microfinacial institutions

    Impact of financial stability on financial inclusion

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    Questionnaires

    Detailed questionnaires would be sent through mail across various

    Micro financial institutions as taking an interview for all banks is not

    possible. These questionnaires would analyse the investment

    trends in money market, capital market, the attitude of banks with

    respect to lending to small and marginal farmers. This will give an

    insight into what the ground reality is, what banks are willing to

    invest and what actions does the government need to take to

    encourage banks to offer lending to small and marginal farmers.

    Secondary Data

    In addition to primary data collected, research would require

    secondary data based on the reports like Economic Survey of India

    published by Finance Ministry. Other prestigious report published

    by Mckinsey, Crisil, Ernst and Young and other government

    departments in order to analyse data with respect to financial

    inclusion. Rising profitability, improving return on assets, financial

    prudence affects tendency of offering credit to small and marginal

    farmers.

    Significance of the study

    The role of the financial system in India, until the early 1990s,

    was primarily restricted to the function of channelling resources

    from the surplus to deficit sectors. Whereas the financial system

    performed this role reasonably well, its operations came to be

    marked by some serious deficiencies over the years. The banking

    sector suffered from lack of competition, low capital base, low

    productivity and high intermediation cost. Reforms were launched

    and in the banking sector, the focus was on imparting operational

    flexibility and functional autonomy with a view to enhancing

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    efficiency, productivity and profitability, imparting strength to the

    system and ensuring accountability and financial soundness.

    In order to outpace chinas growth, India needs to achieve

    ambitious goal of financial inclusion as suggested by Nachiket Mor

    and other panel members. Financial inclusion include not only

    banking products but also other financial services such as

    insurance and equity products.

    Limitations of the Study

    The study is proposed to study the quantitative and qualitative

    aspects of the impact of financial stability on financial inclusion.

    Large samples are required and there are logistical difficulties

    present in gathering large samples. Moreover using large samples

    will increase the cost of research. The interviews taken would be

    very rigid as quantitative analysis will not allow for flexibility.

    It is difficult to form a sample which is large enough and

    representative of the population as it has to cover the entire country

    across public and private sectors banks. Moreover financial

    institutions of large, medium and small sizes need to be taken into

    account as the contribution of each of them need to be analyzed.

    The results cannot be generalized to past, future situations as topic

    of study involves several complex variables so one must take other

    inputs while coming to conclusion.

    REFERENCES

    1. Reports of Asian development bank

    2. Blaine Stephens and Hind Tazi (2006) Performance and

    Transparency: A survey of Microfinance in South Asia

    3. Development Policy Division Planning Commission, New Delhi,

    Eleventh five year plan.

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    4. Ministry of Women & Child Development, Rashtriya Mahila

    Khosh, New Delhi, 2006.

    5.Morduch, J. (1999),The Microfinance Promise,Journal of

    Economic Literature, Vol. 37, No. 4, pp.1569-1614.

    6. Planning Commission, Approach Paper to the Tenth Five Year

    Plan (2002-07), New Delhi, 2001

    7. Planning Commission, Report of the Working Group on

    Agricultural Credit, Cooperation and Crop Insurance for the Tenth

    Five Year Plan (2002-07), New Delhi, 2001.

    8.Purna Chandra Parida and Anushree Sinha (2010) Performance

    and Sustainability of Self-Help Groups in India: A Gender

    Perspective

    9. Robinson, M.S. (2001), The Microfinance Revolution:

    Sustainable Finance for the Poor,

    Washington, D.C.: The World Bank.

    10.S.C. Vetrivel& S. Chandra Kumar mangalam, Role of

    microfinance institutions in rural development, International Journal

    of Information Technology and Knowledge Management July-

    December 2010, Volume 2, No. 2, pp. 435-44

    11.Sen,Mitali (2008),Assessing SocialPerformanceof Microfinance

    Institutions in India.,The ICFAI Journal of Applied Finance, Vol. 14,

    No. 86, pp.77-86.

    12. Srinivasan R. and Sriram, M.S. (2006), Microfinance in India:

    Discussion, IIMB Management Review, pp.66-86.

    13. Bansal, Hema, 2003, SHG-Bank Linkage Program in Indian:

    An Overview, Journal of Microfinance, Vol. 5, Number 1.

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    14. Bhatt, Nitin and Y.S.P. Thorat, 2001, Indias Regional Rural

    Banks: The Institutional Dimension of Reforms , Journal of

    Microfinance, Vol. 3, Number 1.

    15. Damodaran, Harish, 2003, Banks more shy of rural lending,

    Hindu, July 12, 2003.

    16. Fisher, Thomas and M.S. Sriram ed., 2002, Beyond Micro-

    credit: Putting Development Back into Microfinance, New Delhi:

    Vistaar Publications; Oxford: Oxfam.

    17. Harper, Malcolm, 2002, Promotion of Self Help Groups under

    the SHG Bank Linkage Program in India, Paper presented at the

    Seminar on SHG-bank Linkage Programme at New Delhi,

    November 25-26, 2002.

    18. Kropp, Erhard, W. and B.S. Suran, 2002, Linking Banks and

    (Financial) Self Help Groups in India -An Assessment, Paper

    presented at the Seminar on SHG-bank

    19. Linkage Programme at New Delhi, November 25-26,

    2002.Seibel, Hans D. and H.R. Dave, 2002, Commercial Aspects

    of SHG Banking in India,

    20. Paper presented at the Seminar on SHG-bank Linkage

    Programme at New Delhi, November 25-26, 2002