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Satish, P.
- Microfinance for Agriculture:The Way Forward through JLGs
Authors
1 National Bank for Agriculture and Rural Development (NABARD), Maharashtra Regional Office, 54, Wellesley Road, Shivajinagar, Pune-411 005, IN
Source
The Microfinance Review, Vol 2, No 2 (2010), Pagination: 1-17Abstract
The rural finance paradigm of the 1960s and 1970s was based on public authorities' desire to facilitate access to rural finance. Failure of this approach in 1990s left a vacuum as far as agricultural credit is concerned. Despite the great hopes associated with the strong growth of the microfinance sector, it soon became clear that the supply of microfinance for agricultural activities was marginal at best and poorly adapted. Despite the relatively heterogeneous nature of data available, there is a consensus that agriculture is inadequately funded and that the supply does not meet the needs of farmers. In India, though microfinance expanded at a fast pace, it was unable to cater to the needs of agriculture. To overcome this, NABARD has brought forward the concept of Joint Liability Groups (JLGs). This paper studies the working of JLGs in Andhra Pradesh and Kerala. The analysis in this paper clearly brings out that for expanding microfinance services for agriculture, the way forward would have to be the JLG route. The experiences indicate that JLGs have served as collateral substitutes for small and marginal farmers, oral lessees, tenant farmers and share croppers thereby facilitating the increased outreach for agricultural microfinance. The concept has now reached a stage where it has to be upscaled and mainstreamed in an effective manner.
- Overcoming the Obstacle of Lazy Microfinance:The Challenge for SHG-2
Authors
1 National Bank for Agriculture and Rural Development (NABARD), Head Office, Mumbai, IN
Source
The Microfinance Review, Vol 4, No 1 (2012), Pagination: 157-169Abstract
Two decades after its launch the SHG-Bank Linkage Programme continues to be the mainstay of the Indian microfinance scene. What has occurred in the last two decades is of course spectacular, but at the present juncture when SHG- 2 is being launched, it is necessary to lookout for false turns and fair-weather friends. The SHG-Bank Linkage model was neither an easy nor a soft option. It requires tremendous amount of social mobilisation and organisation at all levels especially at the grassischolar_mains. Formation and nurturing of groups is an intensive activity. In contrast to this difficult and time taking task the sector has experienced the phenomenon of lazy microfinance. Lazy microfinance comes in two variants. One is the MFI (NBFC) variant and the other is a host of government sponsored, subsidy linked programmes, which aim to ride on the SHG concept. Though the seeds of lazy microfinance were sown with the launch of SGSY in 1999, it came into full bloom with the partnership model of funding MFIs by banks starting in 2003-04. The challenge of both these variants is real which SHG-2 needs to overcome. If the SHG-Bank Linkage Programme in the modified variant of SHG-2 has to grow into a widespread movement taking into its fold all the left over population groups, it has to clearly delineate a path which is separate from the lazy microfinance as manifested by the NBFC-MFIs on the one hand and the governmental sponsored SHG based programmes on the other. This would require attention at the level of formation and nurturing of groups and at the level of linkage with the banking sector for savings and credit. Unless a strong focus is given at these two levels- SHPIs and Banks- the obstacles posed to SHG-2 by lazy microfinance cannot be overcome.
Keywords
Microfinance, SHG-Bank Linkage Programme.- Coping Mechanisms and Best Practices of MFIs During COVID–19
Authors
1 Executive Director, Sa-Dhan A, 1/248, Safdarjung Enclave, New Delhi, IN
Source
The Microfinance Review, Vol 12, No 2 (2020), Pagination: 11-27Abstract
The COVID–19 pandemic, and the lockdown as a fallout of that, has created an unprecedented situation for the entire world. In India, the lockdown has affected the economy in general and also created myriad problems for the livelihoods of the poor and the underprivileged. The Microfinance Institutions (MFIs) which cater to the financial service needs of these sections of the people were also severely impacted. There were series advisories to the institutions from the sector’s association as well as sane advice from well-wishers as to the path to be followed. Studies brought out the impact of the pandemic and lockdown on MFIs and their clients. MFIs adopted various coping strategies and innovative practices to take care of themselves and their borrowers. They initiated steps to provide relief and rebuild the livelihoods of their poor and underprivileged borrowers. The fact that the MFIs and their borrowers were amongst the earliest to largely return to normalcy underlines the efficacy of the coping strategies and the best practices adopted by the microfinance sector.Keywords
COVID–19 Pandemic, Lockdown, Microfinance Sector.References
- Mahajan, V (2020): E-mail from Vijay Mahajan to the Microfinance Sector-SROs and MFIs, 19 April.
- Sa-Dhan (2020a): Advisory of Sa-Dhan to MFIs and SFBs, 17 April 2020, Sa-Dhan, New Delhi.
- Sa-Dhan (2020b): A Study on Impact of Unfolding COVID–19 on MFIs and Clients, May, 2020, Sa-Dhan, New Delhi.
- Sa-Dhan (2020c): Bharat Microfinance Report-2020, October, 2020, Sa-Dhan, New Delhi.