fms project-microfinance in india

8/3/2019 Fms Project-microfinance in India

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PROJECT

ON

MICROFINANCE IN INDIA

SUBMITTED TO: SUBMITTED BY:Prof. Reena Agarwal Divya Singh (JIML-10-044)

Ashutosh k. Srivastava (JIML-10-032)



ACKNOWLEDGEMNT

Perseverance Inspiration and motivation have always played a key role in

the success of any venture. So hereby, it is our pleasure to record thanks andgratitude to the people involved.

Firstly, we thank DR. Reena Agarwal for her continuous support in the project.Dr. Reena Agarwal was always there to listen and to give advice. She isresponsible for involving us in the project on Microfinance in India. Withouther encouragement and constant guidance we could not able to finish the

project. She was always there to meet and talk about any query.

We would also like to thank to Mr. Manish Sharma, Regional

Manager,SKS Microfinance, Lucknow for enhancing our understandingof the project and enabling us to appreciate finer nuances of the subject.

Ashutosh k.SrivastavaDivya Singh



ABSTRACT:

Micro-Finance refers to ―small savings, credit and insurance servicesextended to socially and economically disadvantaged segments of society,for enabling them to raise their income levels and improve living standards.The main aim of Micro-Finance is too provide loan to the poor people or to

below poverty line, who are not able borrow from other sources and to maketheir living standard better.

Micro- finance concept was first given by the Nobel laureate Prof.Mohammad Yunus in 1976 and started Grameen Bank in that year and fromthen many countries has followed Grameen Bank Model. It is not possible tocover each and every aspect of Micro Finance in this short duration of time.But We have tried to cover main and the basics of Micro Finance.

In this report We have tried to cover each and every important part relatedto the Micro Finance Sector i.e. SHGs and how they formed, role of MicroFinance in the current economy, study about their interest rates, role of women in the economy, how the product is design, talking with Regional

Manager, SKS Microfinance and understand the Business Model of SKSMicrofinance, and many important things related to Micro Finance. Duringthe project, we understood many areas of Micro Finance. Like how acompany decides their interest rate, practically how SHGs formed, how theexcess of government intervention can create disaster for the MFIs, how aMicro loan can change the life of the individuals.



INTRODUCTION TO MICROFINANCE

Micro-finance refers to ―small savings, credit and insurance servicesextended to socially and economically disadvantaged segments of society,for enabling them to raise their income levels and improve living standards.India‘s population is more than 1000 million, and it‘s the second largest interm of population after China. India's GDP ranks among the top 15economies of the world. However, around 300 million people or about 80million households, are living below the poverty line, i.e. less than $2 per day according to the World Bank and the poorest are which earns $1 per day

. It is further estimated that of these households, only about 20% have accessto credit from the formal sector. Out of these 80 million house hold, 80%takes credit from the informal sources i.e. local Zamidars, Chit Funds etc.With about 80 million households below poverty line and 80% out of this isaccess from informal sector, so it‘s obvious to solve this problem and thisgave birth to Micro Finance Institutions (MFIs). MFIs include non-governmental organizations (NGOs), credit unions, non-bank financialintermediaries, and even a few commercial banks.

It is firstly (and this is essential) a tool in the fight against poverty. It is notfor poor people in general but for poor people who are considered to beeconomically active, in other words, those who carry out activities whichgenerate revenues which in turn allow them to cover their needs and those of their families, even if these revenues are low and precarious. Microfinanceoffers to help them get started by giving them access to financial servicesfrom which they are generally excluded (including savings and creditfacilities, insurance and fund transfers), and in ways that are suited to their economic and management skills. Ultimately, the goal of microfinance is togive low income people an opportunity to become self-sufficient by

providing a means of saving money, borrowing money and insurance.



Microcredit, Microfinance and Micro plus? Microcredit refersspecifically to loans and the credit needs of clients, while Microfinancecovers a broader range of financial services that create a wider range of opportunities for success. Examples of these additional financial servicesinclude savings, insurance, housing loans and remittance transfers. The localMFI might also offer Microfinance plus activities such as entrepreneurialand life skills training, and advice on topics such as health and nutrition,sanitation, improving living conditions, and the importance of educatingchildren .

Legal and Regulatory Framework for theMicrofinance Institutions in India:

1. SOCIETIES REGISTRATION ACT, 1860:

NGOs are mostly registered under the Societies Registration Act, 1860.Since these entities were established as voluntary, not-for-profitdevelopment organizations, their microfinance activities were also

established under the same legal umbrella. This act is applicable to the NGOs and the main purpose is:

• Relief of poverty

• Advancement of education

• Advancement of religion

• Purposes beneficial to the community or a section of the community.

2. INDIAN TRUSTS ACT, 1882:

Some MFIs are registered under the Indian Trust Act, 1882 either as publiccharitable trusts or as private, determinable trusts with specified

beneficiaries/members.



3. NOT-FOR-PROFIT COMPANIES REGISTERED UNDER

SECTION 25 OF COMPANIES ACT, 1956:

An organization given a license under Section 25 of the Companies Act1956 is allowed to be registered as a company with limited liability withoutthe addition of the words ‗Limited‘ or ‗Private Limited‘ to its name. It isalso eligible for exemption from some of the provisions of the CompaniesAct, 1956. For companies that are already registered under the CompaniesAct, 1956, if the central government is satisfied that the objects of thatcompany are restricted to the promotion of commerce, science, art, religion,

charity or any other useful purpose; and the constitution of such company provides for the application of funds or other income in promoting theseobjects and prohibits payment of any dividend to its members, then it mayallow such a company to register under Section 25 of the Companies Act .



WORKING MODELS FOR MICROFINANCE

1. Self help group2. Joint liability group

1. Self help group

A Self-Help Group (SHG) is a registered or unregistered group of microentrepreneurs having homogenous social and economic backgroundvoluntarily, coming together to save small amounts regularly, to mutually

agree to contribute to a common fund and to meet their emergency needs onmutual help basis:” In short, SHG is a small group of rural poor, who havevoluntarily come forward to form a group for improvement of the social andeconomic status of the members.

Members of SHG agree to save regularly and contribute to a common fund.

The members agree to use this common fund and such other funds (likegrants and loans from banks), which they may receive as a group, to givesmall loans to needy members as per the decision of the group.

The group members use wisdom and peer pressure use of credit and timely

repayment thereof. In fact, peer pressure has been recognized as an effectivesubstitute for collaterals.

Need of SHG: The rural poor are incapacitated due to various reasons, suchas; most of them are socially backward, illiterate, with low motivation and

poor economic base. Individually, a poor is not only weak in socio-economic term but also lacks access to the knowledge and information,which are the most important components of today’s development process.However, in a group, they are empowered to overcome many of these

weaknesses. Hence, there are needs for SHG, which in specific terms are asunder:-

• To mobilize the resources of the individual members for their collective economic development.



• To uplift the living conditions of the poor.• To create a habit of savings.

• Utilization of local resources.

• To mobilize individual skills for group‘s interest.

• To create awareness about rights.

• To assist the members financially at the time of need.

• To identify problems, analyzing and finding solutions in the group.

• To act as a media for socio-economic development of the village.

• To develop linkages with institutions of NGOs.

• To organize training for skill development.

• To help in recovery of loans.

• To gain mutual understanding, develop trust and self-confidence.

• To build up teamwork.

• To develop leadership qualities.

Structure of SHG: Size of SHG : The ideal size of an SHG is 10 to 20

members. The disadvantage of having high number is that, members cannotactively participate. Also, legally it is required that an informal group shouldnot be of more than 20 people.The group need not be registered.

Condition required for membership for SHG:

Members should be between the age group of 21-60 years. From one family,only one person can become a member of an SHG. (More families can joinSHG this way).

The group normally consists of either only men or only women. Becausemixed group it would hindered or obstruct free and frank discussions, or opening of the personal problem.



Women’s groups are generally found to perform better. (They are better insavings and they usually ensure better end use of loans).

Members should be homogenous i.e. should have the same social andfinancial background. (Advantage: This makes it easier for the members tointeract freely with each other, if members are both from rich as well as poor class, the poor may hardly get an opportunity to express themselves).

Members should be rural poor (By poor one should be guided by the livingconditions).

2. Joint Liability Group

“Joint Liability Group (JLG) is a group of individuals coming together to borrow from the financial institution. They share responsibility and stand asguarantee for each other.” The individual wanting loans will have to forminto a group where each member will be providing cross guarantee for eachother.

Working of joint liability group:

1. Joint Liability Group will approach to the NGO for the requirement of thecredit and loan to improve their lives and for the technical support.2. The NGO have tie up with the commercial banks and any other financialinstitution they will ask them for the amount to give them so that they can

provide it to the joint liability group.3. The Commercial bank will provide the technical support to the NGO andsame they will provide it to the Joint Liability Group.4. Then joint liability group will provide there credits and savings to the

NGO and commercial banks



JLG features:

• JLG haves 30-35 members group.

• The group should be either all male or female only in exception casescan there be a mixed group.

• Members within a group should have similar turnover/profit andgroup should be economically homogeneous.

• The group member should be well known to each other.

• The group member should have their own business.

• The groups have shop/ business in the same locality.

• Lending may start from group size of not less than three members.

Difference between SHGs and JLGs

SHGs (Self Help Groups) JLGs (JLG Groups)

• Minimum 10 members andmaximum 20.

• For SHGs meeting iscompulsory.

• For SHGs the bank loanis available.

• SHG gets the benefit of theentire government scheme,which is viable for them.

• Minimum 20 members andmaximum 50.

• There is no necessary of compulsory meeting for JLGs.

• For JLGs, they get the loanonly from MFIs.

• There is no benefit of anygovernment schemes for

JLGs.



ROLE OF NABARD

How NABARD helps MFI’s in augmenting?

• NABARD gives loans to the MFI‘s after analyzing there ratingand balance sheet.

• Conduct the workshop where the executive of the NABARD meetthe executive and employees of different MFI‘s and bring themtogether on the same podium.

•

NABARD gives the refinance to the MFI‘s also.

Credit institutions as a Political tool: Debt relief in India :-

Rural financial institutions that are associated with governments often become the target of politicians. Indian Government appointed Agricultural

Credit Review Committee in 1989. During the election years, and even atother times, there is a considerable propaganda from political platforms for

postponement of loan recovery or pressure on the credit institutions to grantextension or waive of the loans.

The ―willful defaulters are, in general, socially and politically important people who example others are likely to follow. The waiver of farm loans bythe government of India has resulted in increased defaulters. Paying back theloan is a cultural concept. People borrowing money should feel the strongmoral urge to pay the loan back. Loan waivers instead make them feel that if the things go really, really bad, government will step in and cancel theinterest payable and even principle also. This will increase the defaulters list

because even the decent borrowers default on their loan.

Microfinance in India is also affected by political intervention.For example: around the year 1995, at the behest of Mr. Devilal thegovernment of India waived the repayment of agriculture loans, in which theoutstanding debit amount was less than Rs 10,000 per loan account.



It was noticed in the RBI inspection of some of the District Central Co-0perative Banks (DCCBs) during the latter years that hundreds in thousandsof defaulters with outstanding Dr Balance in excess of Rs 10,000 were alsoaccommodated by some accounting jugglery. Be whatever it may, suchdeclaration from the government obviously prompts the emergence of willful defaulters.Such a culture will seriously impact the MFI‘s operating inthe rural areas.

How MFIs manage their repayment and risk management?

All MFIs face risks that they must manage efficiently and effectively to besuccessful. When poorly managed risks begin to result in financial losses,donors, investors, lenders, borrowers and savers tend to lose confidence inthe organization and funds begin to dry up. When funds dry up, an MFI isnot able to meet its social objective of providing services to the poor andquickly goes out of business.

Major Risks to Microfinance Institutions:

Financial Risks Operational Risks Strategic Risk

Credit risk

• Transaction risk

• Portfolio risk Liquidity risk Market risk

• Interest raterisk

• Foreignexchange risk

• Investment portfolio risk

Transaction risk

• Humanresourcesrisk

• Information&

technologyRisk

Fraud (Integrity) Risk

Legal & ComplianceRisk

Governance Risk

• IneffectiveoversightPoor governancestructure

Reputation Risk External Business Risks

• Event risk



Why micro finance provides loan to the women only?

A majority of microfinance programs generally target women—often morefinancially responsible at repaying than men—as clients, providing themwith direct control over resources.Why MFIs typically targeted women. These factors included:

• Repayment rates are higher than men, so lending to women is a better Investment.

• Women are on average poorer than men, so focusing on womencan help achieve poverty targets.

• Women‘s activities contribute to a community‘s economic growth,so lending to women is more efficient.

• The members in a group are selected so as to be in the same agegroup and residing in the same locality being friends but not fromfamily. In case of problems in recovery from even one of themembers, the system of joint liability ensures recovery of the duesfrom all the members within a group.

•

Women are better borrowers because they repay their loans morefaithfully than men repay and tend to spend money on improvingthe standard of living of their family.

• It has been proved that women are those who are the most able tomanage the money of the household. Experience has shown thatwomen are a good credit risk, and that women invest their incomesurround the well being of their families.

• Women have proven to be the best poverty fighters. Experienceand studies have shown that they use the profits from their

businesses to send their children to school, improve their families‘living conditions and nutrition, and expand their businesses.

• By providing access to financial services only through women— making women responsible for loans, ensuring repayment throughwomen, maintaining savings accounts for women, providinginsurance coverage through women—microfinance programs senda strong message to households as well as to communities.



Why Microcredit Rates are so high?

The reason is that the administrative costs are inevitably higher for tinymicrolending than for normal bank lending. Lending out a million dollars in100,000 loans of $100 each will obviously require a lot more in staff salariesthan making a single loan for the total amount. As a result, interest rates insustainable microfinance institutions (MFIs) are substantially higher than therates charged on normal bank loans.

Inflation adds to the cost of microfinance funds by eroding micro lenders'equity. Thus, higher inflation rates contribute to higher nominal microcreditinterest rates through their effect on the real value of equity.

Most of the Micro lenders face two kinds of operating costs: personnel andadministrative. Because micro lending is still a labor-intensive operation,

personnel costs are high. Administrative costs consist mainly of rent, utilitycharges, transport, office supplies, and depreciation of fixed assets. Makingand recovering small loans is costly on a per unit basis. Often loan recoveryis executed by staffs who visit clients, increasing costs in time taken andtransportation used. Poor physical infrastructure—inadequate road networks,transportation, and telecommunication systems— in many countries inwhich micro lenders operate also increases administrative costs and addssignificantly to the cost of microfinance operations.



SWOT Analysis of micro finance

Strength :

• Helped in reducing the poverty: The main aim of Micro Finance isto provide the loan to the individuals who are below the poverty lineand cannot able to access from the commercial banks. As we knowthat Indian, more than 350 million people in India are below the

poverty and for them the Micro Finance is more than the life. By

providing small loans to this people Micro finance helps in reducingthe poverty.

• Huge networking available: For MFIs and for borrower, both thehuge network is there. In India there are many more than 350 millionwho are below the poverty line, so for MFIs there is a huge demandand network of people. And for borrower there are many small andmedium size MFIs are available in even remote areas.

Weakness :

•

Not properly regulated:In India the Rules and Regulation of Micro

Finance Institutions are not regulated properly. In the absent of therules and regulation there would be high case of credit risk anddefaults. In the shed of the proper rules and regulation the Microfinance can function properly and efficiently.

• High number of people access to informal sources: According tothe World Bank report 80% of the Indian poor can‘t access to formalsource and therefore they depend on the informal sources for their

borrowing and that informal charges 40 to 120% p.a.• Concentrating on few people only: India is considered as the second

fastest developing country after China, with GDP over 8.5% from the past 5 years. But this all interesting figures are just because of few people. India‘s 70% of the population lives in rural area, and that portion is not fully touched.



Opportunity:

• Huge demand and supply gap: There is a huge demand and supplygap among the borrowers and issuers. In India around 350 million of the people are poor and only few MFIs there to serving them. Thereis huge opportunity for the MFIs to serve the poor people andincrease their living standard. The annual demand of Micro loans isnearly Rs 60,000 crore and only 5456 crore are disbursed to the

borrower.( April 09)

• Employment Opportunity: Micro Finance helps the poor people bynot only providing them with loan but also helps them in their

business, educate them and their children etc. So in this MicroFinance helping in increase the employment opportunity for them andfor the society.

• Huge Untapped Market: India‘s total population is more than 1000million and out of 350 million is living below poverty line. So there isa huge opportunity for the MFIs to meet the demand of that unservedcustomers and Micro Finance should not leave any stones unturned tograb the untapped market

• Opportunity for Pvt. Banks: Many Pvt. Banks are shying away from toserve the people are unable to access big loans, because of the highintervention of the Govt. but the door open for the Pvt. Players to get entry and with flexible rules Pvt. Banks are attracting towards this segment.

Threat:

• High Competition: This is a serious threat for the Micro Financeindustry, because as the more players will come in the market, their competition will rise , and we know that the MFIs has the hightransaction cost and after entrant of the new players there transactioncost will rise further, so this would be serious threat.



• Neophyte Industry: Basically Micro Finance is not a new concept inIndia, but that was all by informal sources. But the formal source of finance through Micro Finance is novice, and the rules are also not

properly placed for it.• Over involvement of Govt.: This is the biggest that threat that many

MFIs are facing. Because the excess of anything is injurious, so in thesame way the excess involvement of Govt. is a serious threat for theMFIs. Excess involvement definition is like waive of loans, make new

rules for their personal benefit etc



SKS Microfinance

Swayam Krishi Sangam (SKS) employs the Grameen bank lendingmethodology. SKS is a young MFI, which recently transformed into an

NBFC and was established as an NGO in 1997 by Vikram Akula, a socialentrepreneur and graduate of both Yale & Tufts Universities.72 The missionof SKS is, ―To empower the poorest of the poor to become economicallyself-reliant by providing financial services to poor women, through groups atthe village level, in a self sufficient manner.

Its goal going forward is to raise money in order to scale up and reach 15million customers by 2012. Since its founding, SKS has delivered over US $1.3 Billion (6,640 Crore) and has maintained loans outstanding of US$ 451Million (Rs 2,284 Crore) in loans to 3,953,324 women members in poor regions of India. Thus we are interested in how it has fared as an NGO andwhat has driven it to transform. It then completes the picture of the variousapproaches to becoming an NBFC that an MFI can take and therefore,allows us to see a wider and richer array of benefits and costs.

Sources of Capital

SKS transformed from and NGO into an NBFC in January 2005 order toimprove financial sustainability and access commercial funds in order toscale up outreach to1,000,000 clients by 2010. SKS cited the benefits that it now enjoys as an

NBFC as:

• Greater access to funds as commercial lenders have greater comfort

lending to a regulated company with transparent ownership.• A diverse funding source because as an NBFC, SKS can raise equity andoffer financial returns, enabling it to access commercial investors andinternational capital markets.



• Greater Outreach Potential due to increased access to funds.

SKS has historically sourced most of its capital from donors and loans. In2008, SKS indicated that 40% of the company is owned by its clients with15% of it owned by employees and the rest by a group of institutional andindividual investors.

Organization & Management Analysis

Strategic Vision

The strategy of SKS to achieve its mission is to help poor people accesssmall, low interest loans during times of crisis, so that they can avoid fallinginto debt traps. SKS endeavors to offer the poor alternatives from Banks thatrequire collateral and bureaucratic procedures as well as moneylenders thatcharge exorbitant interest rates. The company does so by deliveringcollateral-free microfinance in the form of small loans and savings facilitiesto the doorstep of the poor. SKS seems to have a strong strategic mission butthere is some uncertainty about its ability to balance that mission whileattempting to transform into a more financially sustainable andcommercially oriented institution. The rapid growth of the organizationshows its commitment to outreach and scale in the service of the mandate of microfinance. Our main concern surrounds its ability to balance itsambitious mission to serve the ―poorest of the poor in a financially viablemanner.

Management & Governance

SKS has a board of directors composed of seven members about which notmuch was said in the 2008 annual report. Thus, the diversity and strength of

SKS’ board is somewhat unclear. However, the members of SKS’Foundation, its fundraising arm, are a diverse group of professionals andacademics from India and the U.S. SKS’ management also appears to bequite strong based simply upon ranges of experience in business anddevelopment and education



Transparency

The transparency of SKS seems rather good in that its financial statementsare readily available and up to date, however not all information wasoutlined as clearly as that of BASIX or in some instances SHARE.Information detailing governance, human resource management, and povertyimpact analysis as well as poverty outreach strategy was hard to extract andnot readily available. Again, this may simply be a factor of the size of thecompany and its length of time in operation.

Loan Methodology &Village selection

Before entering a village, SKS staff members conduct a comprehensive

survey to evaluate the local conditions and potential for operations.Some of the key factors include total population, poverty level, roadaccessibility, political stability and safety. After a village has been selected,SKS conducts a Projection Meeting with the entire village to introduce SKS,its mission, methodology and services. After the projection meeting, SKSholds a Mini-Projection Meeting to further explain SKS to interested partiesand appeal directly to those who may not have attended the meeting becauseof religious, class, caste or gender barriers. Upon completion of the mini-

projection meeting, Sangam (Center) Formation begins.

Sangam (centre) formation

Before entering a village, SKS staff members conduct a comprehensivesurvey to evaluate the local conditions and potential for operations. Some of the key factors include total population, poverty level, road accessibility,

political stability and safety. After a village has been selected, SKS conductsa Projection Meeting with the entire village to introduce SKS, its mission,methodology and services. After the projection meeting, SKS holds a Mini-Projection Meeting to further explain SKS to interested parties and appeal

directly to those who may not have attended the meeting because of religious, class, caste or gender barriers. Upon completion of the mini-

projection meeting, Sangam (Center) Formation begins.



As additional groups are formed within a single village, a Sangam (Center)emerges. During Sangam Formation, groups are combined to form a center of 4 to 12 groups or 20 to 60 clients. The Sangam is responsible for therepayment of all groups, creating a dual joint liability system. If one groupdefaults the rest of the Sangam must repay. Once a Sangam is formed Asadditional groups are formed within a single village, a Sangam (Center)emerges. During Sangam Formation, groups are combined to form a center of 4 to 12 groups or 20 to 60 clients. The Sangam is responsible for therepayment of all groups, creating a dual joint liability system. If one groupdefaults the rest of the Sangam must repay.



MEETING WITH REGIONAL MANAGER,SKS

MICROFINANCE,LUCKNOW-

During project We met Mr. Manish Sharma,Regional Manager,SKSMicrofinance,Gomtinagar,Lucknow.Our meeting with Mr. Sharma was veryinteractive.He told us following facts about microfinance specially SKSMicrofinance-

• In SKS Microfinance, financing is based on JLG(Joint liabilitygroup).

• Product provided by us is Microcredit,

Microinsurance,Remittance facilities etc.• In SKS Microfinance we select group of 30-35 people and trained

them for 2-3 days (financial literacy). We give small task to group just to check each member ‘s trust in group because it may be possible that a particular member in a group is defaulter innature.So in this type of financing TRUST IN GROUP isimportant things.We check trust of member through SOCIAL

BINDING.On 4th day,an employee from our company goes tocheck the member who pass or fail in group on the basis of task given and by checking trust of members.Thus final group isformed.

• We prefer women(95% women) for the group because we feelthat women are more honest,hardworking and responsible thanmen,manage money effectively and there is also no ego problem inwomen.

• We provide loan only for income generating activities not for other purpodse.

• We take signature of member not thumb print so in case of illiterate woman we take signature of her husband for agreement.

• Provide loan to each individual in a group.• Min 20 and Max 50 member can be in group.• Give max loan amount to each individual in a group is Rs. 50000

and min amount is Rs. 1000.



• Interest rate charged by SKS Microfinance-24.55% which isfixed,not differ to individual to individual.

• We charge interest rate only on remaining loan amount after paying each instalment of loan.

EX- Suppose if loan amount =Rs.1000and interest rate= 15%installment =Rs. 100/- weeklythen interest we charge at RS.1000= Rs.150 in first week in next week we charge interest rate on Rs. 1000-100=900

so interest for second week=Rs.135.

• Monitoring/Inspection- We always monitor or check activities of members in group whether member is paying installment regularlyor not ,whether member used this amount in income generatingactivities or not untill the all loan installment is paid.

IN CASE OF DEFAULTER:We make pressure to other

members of group so that defaulter pay the installment .This iscalled SOCIAL COLATERAL BINDING PRESSURE. Sodefault ratio is low (1-2 % default case) that is our efficiency isalmost 99% for recovery of loan. Loss in case of default ismanaged by high interest rate.

• We take high interest rate because of inflation, highadministrative cost for giving this small amount of loan. Loan iseither of Rs. 1000 or Rs.1000000 cost come in the whole process issame because fixed cost for approving a loan of small or large issame.



• We take fund for financing loan to clients through

SIDBI,NABARD,YES BANK etc,but fund raising is also affected by recession and gov policy.

• We can provide 2-3 loan to a group in a year after seeing their loan paying performance that is if a group paid all its loaninstallment with in time then we can give further loan to a groupfor income generating activities.

• We form SANGAM CENTRE in radius of 25 km in a village.



BIBLIOGRAPHY

http://www.cgap.org/

http://www.sksindia.com/

http://www.microfinancefocus.com/

http://microfinancehub.com/

fms project-microfinance in india

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