A B C D E F G H I J K L M N O P Q R S T U V W X Y Z All
Rathore, Bhawani Singh
- Institutional Analysis of Microfinance Institutions (MFIs):Status and Measures for Wider and Effective Outreach
Authors
1 Centre for Research on Financial Inclusion and Microfinance (CRFIM), IN
2 Bankers Institute of Rural Development, Lucknow, IN
Source
The Microfinance Review, Vol 8, No 2 (2016), Pagination: 16-33Abstract
The Indian microfinance sector is witnessing a period of high growth phase. With increased capital inflows and easy availability of loans from banks, MFIs may be under pressure to perform better. This opens up the debate on whether the growth in the sector is sustainable or is it just a signal of the crisis like the one happened in 2010. This paper examines some of the pertinent issues related to the high growth, namely, regional concentration, robustness of credit appraisal, drivers of growth, mission drift, profitability, product and process innovations and responsible financing. Using regression analysis on the data available since 1996 with Microfinance Information Exchange (MIX), the paper also analyses the determinants of the profitability and efficiency of Indian MFIs. On the basis of the findings, the paper makes suitable suggestions for the wider and effective outreach of the Indian MFIs.
Keywords
Microfinance, Microfinance Institutions (MFIs), Outreach, Regional Concentration, Portfolio Quality, Drivers of Growth, Responsible Financing.
References
- Champatiray A K, Agarwal P and Sadhu S (2010): “Map of Microfinance Distribution in India”, IFMR Centre for Microfinance: Chennai.
- Chen, Greg, S Rasmussen and X Reille (2010): “Growth and Vulnerabilities in Microfinance”, Focus Note No. 61, Washington DC: CGAP.
- Grameen Foundation India (GFI) (2015): “Microfinance Poverty Outreach in PSIG States”, at http://www.grameenfoundation.in (accessed on 6 September 2016)
- India Ratings & Research (2015): “Microfinance: Strong Comeback”, at https://www.indiaratings.co.in (accessed on 21 August 2016)
- MicroSave (2015): “Code of Conduct Assessment for Microfinance Sector”, at http:// www.microsave.net (accessed on 3 September 2016).
- M-CRIL (2015): “The M-CRIL Microfinance Review 2014: Risk, Regulation and Reward”, http://www.mcril.com (accessed on 2 September 2016).
- Misra A (2016): Responsible Finance India Report 2015, Access Development Services, New Delhi.
- Religare Capital Markets (2015): “India Microfinance: Crisis Brewing”, at http://research.religarecm.com (accessed on 23 August 2016).
- Reserve Bank of India (2015): “Non-Banking Finance Company – Microfinance Institutions”, Master Circular (NBFC-MFIs) – Directions – Modifications, Department of Non-Banking Supervision at https://rbi.org.in (accessed on 27 August 2016).
- Sa-Dhan (2016): The Bharat Microfinance Report 2016, New Delhi.
- - (2015): “Code of Conduct for the Microfinance Industry”, MFIN: Gurgaon.
- Sriram M S (2015): Inclusive Finance India Report 2015, Access Development Services, New Delhi.
- https://www.crisil.com/pdf/corporate/CRISIL-Inclusix-Volume-III.pdf
- https://www.themix.org (accessed on 15 February 2016)
- Social Bottom Line of Microfinance Institutions:Evidences from Rajasthan
Authors
1 JK Lakshmipat University, Jaipur, Rajasthan, IN
Source
The Microfinance Review, Vol 8, No 1 (2016), Pagination: 34-49Abstract
Most of the Microfinance Institutions (MFIs) have a social mission. Social Performance or the social bottom line is about making an organisation's social mission a reality. Social Performance includes analysis of the declared objectives of institutions, the effectiveness of their systems and services in meeting these objectives, related outputs and success in effecting positive changes in the lives of clients. Social Performance Assessment (SPA) is a measure of how well an institution uses its systems and operations to generate positive social benefits. Using data from five MFIs selected from different legal categories, this paper attempts to measure social performance on the dimesions of depth of outreach, access and usage, and appropriateness of financial services. The study finds that with the introduction of Reserve Bank of India (RBI) guidelines post 2010 crisis and later modifications, the sector has witnessed several positive changes in terms of client satisfaction and protection. However, there are several violations of these guidelines in the field, requiring strict monitoring. RBI also has to make its guidelines more practical so that correct reporting is done in the field. Co-operative institutions should also be brought under the RBI regulation so as to give level playing field to all the institutions and protection to the poor.Keywords
Social Performance, Microfinance Institutions.- Outreach Performance of the MFI Sector:An Empirical Study
Authors
1 CRFIM, BIRD, Lucknow, IN
2 BIRD, Lucknow, IN
Source
The Microfinance Review, Vol 9, No 1 (2017), Pagination: 25-39Abstract
Microfinance Institutions (MFIs) have seen incredible growth in the past few years in India. However, there is a concern that the growth in the number of clients lags behind the growth in loan portfolio. In this context, this study intends to analyse the outreach of different categories of MFIs in terms of breadth, scope and depth. The study uses both, MFI-level and clientlevel data. The client-level data is drawn from 600 clients of 10 MFIs in five states. The MFIs were chosen from categories based on legal status and scale of operation. Larger Non Banking Financial Company-Micro Finance Institutions (NBFC-MFIs) were found to be having better geographical spread. However, in terms of other breadth of outreach variables, the performance depends upon the delivery models rather than the legal status and the scale of operation. In terms of scope of outreach, non-NBFC MFIs (like Annapurna Co-operative) were found to be better performing. The poverty outreach of the sample MFIs is much lower than the National Poverty Line. The study suggests developing an ecosystem of 'Not-for-Profit' companies in India for creating an alternate model of microfinance based on overall development of the clients. Additionally it also recommends introducing well-designed saving products and low-cost health and education services for the poor so as to ensure poverty reduction on a sustainable basis.Keywords
Microfinance Institutions, NBFC-MFIs, Poverty.References
- Annapurna (2016): Annapurna Annual Report 2015-16, Annapurna, Pune.
- Bharatiya Micro Credit (2016): BMC Annual Report 2015-16, BMC, Lucknow.
- Cashpor (2016): Cashpor Annual Report 2015-16, Cashpor, Varanasi.
- Champatiray, A K, Agarwal P and Sadhu S (2010): “Map of Microfinance Distribution in India”, IFMR Centre for Microfinance, Chennai.
- Grameen Foundation India (2015): Microfinance Poverty Outreach in PSIG States, Retrieved from http://www.progressoutofpoverty.org/sites/default/files/Four%20State%20POR%20 _Synt esis_Report_2015.pdf.
- Khamar, M and Martinez, R (2015): “India Microfinance Geographical Index: A Tool to Measure Microfinance Service Penetration Across India”, MIX, Washington DC.
- Midland (2016): Midland Annual Report 2015-16, Midland, Jalandhar.
- Nabard Financial Services Limited (2016): NABFINS Annual Report 2015-16, NABFINS, Bengaluru.
- Navajas, S, Schreiner, M, Meyer, R L, Gonzalez-Vega, C, and Rodriguez-Meza, J (2000): “Microcredit and the Poorest of the Poor: Theory and Evidence from Bolivia”, World development, 28(2), 333-346.
- Rashtriya Gramin Vikas Nidhi (2016): RGVN (NE) Microfinance Annual Report 2015-16, RGVN, Guwahati.
- Rathore, B S, Kumar, D and Deshpande, D V (2016): “Institutional Analysis of Microfinance Institutions (MFIs): Status and Measures for Wider and Effective Outreach”, The Microfinance Review, 8(2), 16-33.
- Shree Kshetra Dharmasthala Rural Development Project (2016): SKDRDP Annual Report 2015-16, SKDRDP, Dharmasthala.
- SaDhan (2016): The Bharat Microfinance Report 2016, SaDhan, New Delhi.
- Sanghamithra (2016): Sanghamithra Annual Report 2015-16, Sanghamithra, Bengaluru.
- Sonata (2016): Sonata Annual Report 2015-16, Sonata, Lucknow.
- Ujjivan (2016): Ujjivan Annual Report 2015-16, Ujjivan, Bengaluru.
- http://pib.nic.in/newsite/PrintRelease.aspx?relid=123563
- Efficacy of EShakti: An Assessment
Authors
1 Bankers Institute of Rural Development (BIRD), Lucknow, IN
2 BIRD, Lucknow, IN
Source
The Microfinance Review, Vol 10, No 2 (2018), Pagination: 36-48Abstract
A growing body of research reveals many developmental benefits arising from digital financial inclusion. Digital way of promoting financial inclusion by targeting Self-Help Groups (SHGs) could be a possible channel for enhancing digital financial inclusion in India. The EShakti project, launched by National Bank for Agriculture and Rural Development (NABARD) in 2015, aims at digitisation of all SHG’s accounts to bring SHG members under the fold of financial inclusion and, thereby, helping them to access a wide range of financial services while increasing bankers’ comfort in credit appraisal and linkage. This study attempts to examine the efficacy of the EShakti project by analysing the role of digitisation in enhancing credit linkage, the quality and regularity of data uploading in the portal, the usage of the portal and the user experience. The study is based on data collected from 35 SHGs spread across seven districts from six states, one each representing six different regions.
The analysis reveals that post EShakti project implementation, the maintaining records has improved manifold. Members have found the SMS alerts useful as they provide transparency in the transactions. However, owing to the non-updating of the mobile numbers, many of the SHG members were not receiving the messages. It has also helped to avoid the occurrence of multiple memberships with mandatory requirements of Aadhar number. However, the quality and regularity of data updating remain a major concern. Many mobile phones or tablets were not in working condition. Data entry was done by the agency after the meeting of the members. Animators were not trained on data entry and many of the entries in the system did not match with the records in the register.
EShakti is perceived as an important tool for borrower verification by some of the bankers. However, the usage of the portal was found to be abysmally low with only 19% of the branches using them. This may be attributed to a variety of reasons like lack of awareness on part of the branch managers, lack of training on the portal and difficulty faced while accessing the portal. Further, the study also reveals a significant positive association between the quality and regularity of data updating and credit linkage.
References
- Demirgüç-Kunt, A, K Leora, S Dorothe, A Saniya and H Jake (2018): The Global Findex Database - Measuring Financial Inclusion and the Fintech Revolution, World Bank, Washington, DC.
- National Bank for Agriculture and Rural Development (2018): Status of Microfinance in India 2017-18, NABARD, Mumbai.