PROJECT REPORT (MMPP 1)

A STUDY OF MICRO FINANCE FACILITIES AND

ANALYZING THE AWARENESS LEVEL OF RURAL

PEOPLE ABOUT MICRO FINANCE

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF

MASTER OF BUSINESS ADMINISTRATION (BANKING & FINANCE)

SUBMITTED BY:

NAME: ……………………………

ENROLMENT NO.: …………………………

Under the supervision of

………………………………………..

SUBMITTED TO:
<<

SCHOOL OF MANAGEMENT STUDIES

INDIRA GANDHI NATIONAL OPEN UNIVERSITY,

MAIDAN GARHI, NEW DELHI – 110068

This is to certify that the project titled A STUDY OF MICRO FINANCE FACILITIES

AND ANALYZING THE AWARENESS LEVEL OF RURAL PEOPLE ABOUT

MICRO FINANCE is an original work of the student and is being submitted in partial

fulfillment for the award of the “Master of Business Administration (Banking &

Finance)” of Indira Gandhi National Open University. This report has not been submitted

earlier either to this University or to any other University/Institution for the fulfillment of

the requirement of a course of study.

_________________________ _______________________
SIGNATURE OF SUPERVISOR SIGNATURE OF STUDENT
Date: Date:

Place: Place:

ii | P a g e
 ACKNOWLEDGEMENT
I feel indebted to my guide ……………………….. for the completion of

the dissertation entitled A STUDY OF MICRO FINANCE FACILITIES AND

ANALYZING THE AWARENESS LEVEL OF RURAL PEOPLE ABOUT

MICRO FINANCE. The present work could be completed only because of the able

guidance and affectionate attitude of my guide ………………………..

I am thankful to all respondents and all those who assisted me by

supplying the requisite information towards the completion of the questionnaire there by

enable me to collect the relevant data.

SUBMITTED BY:

……………………………

ENROLMENT NO.: …………………………..

iii | P a g e
CHAPTER NO. TITLES PAGE NO.

I INTRODUCTION

II REVIEW OF RELATED LITERATURE

III RESEARCH METHODOLOGY

IV DATA ANALYSIS AND

INTERPRETATIONS

V FINDINGS, SUGGESTIONS &

CONCLUSIONS

BIBLIOGRAPHY

QUESTIONNAIRE

iv | P a g e
 CHAPTER 1

INTRODUCTION

1|Page
MICROFINANCE BACKGROUND & HISTORY IN WORLD

Microfinance can be defined as any activity that includes the provision of financial

services such as credit, savings, and insurance to low income individuals which fall just

above the nationally defined poverty line, and poor individuals which fall below that

poverty line, with the goal of creating social value. The creation of social value includes

poverty alleviation and the broader impact of improving livelihood opportunities through

the provision of capital for micro enterprise, and insurance and savings for risk mitigation

and consumption smoothing.

So, Microfinance is the provision of broad range of financial services such as deposits,

loans, payment services, money transfers and insurance to poor people and low income

households and their micro enterprises. It is an effective tool for making the banking

services accessible to the rural unbanked areas. Improved access and efficient provision

of savings, credit and insurance facilities would enable the poor to set up micro

enterprise, build up economic assets, manage the risks better and enhance income earning

capacity and resultantly improve their standard of living.

Microfinance is usually understood to entail the provision of financial services to micro-

entrepreneurs and small businesses that lack access to banking and related services due to

the high transaction costs associated with serving these client categories. The two main

mechanisms for the delivery of financial services to such clients are (1) relationship-

based banking for individual entrepreneurs and small businesses; and (2) group-based

models, where several entrepreneurs come together to apply for loans and other services

as a group.

2|Page
In some regions, for example Southern Africa, microfinance is used to describe the

supply of financial services to low-income employees, which is closer to the retail

finance model prevalent in mainstream banking.

For some, microfinance is a movement whose object is "a world in which as many poor

and near-poor households as possible have permanent access to an appropriate range of

high quality financial services, including not just credit but also savings, insurance, and

fund transfers." Many of those who promote microfinance generally believe that such

access will help poor people out of poverty. For others, microfinance is a way to promote

economic development, employment and growth through the support of micro-

entrepreneurs and small businesses.

Microfinance is a broad category of services, which includes microcredit. Microcredit is

provision of credit services to poor clients. Although microcredit is one of the aspects of

microfinance, conflation of the two terms is endemic in public discourse. Critics often

attack microcredit while referring to it indiscriminately as either 'microcredit' or

'microfinance'. Due to the broad range of microfinance services, it is difficult to assess

impact, and very few studies have tried to assess its full impact. Proponents often claim

that microfinance lifts people out of poverty, but the evidence is mixed. What it does do,

however, is to enhance financial inclusion.

ROLE OF MICROFINANCE

Traditionally, banks have not provided financial services, such as loans, to clients with

little or no cash income. Banks incur substantial costs to manage a client account,

regardless of how small the sums of money involved are. For example, although the total

gross revenue from delivering one hundred loans worth $1,000 each will not differ

3|Page
greatly from the revenue that results from delivering one loan of $100,000, it takes nearly

a hundred times as much work and cost to manage a hundred loans as it does to manage

one. The fixed cost of processing loans of any size is considerable as several things—

assessment of potential borrowers, their repayment prospects and security; administration

of outstanding loans, collecting from delinquent borrowers, etc.—have to be done in all

cases. There is a break- even point in providing loans or deposits below which banks lose

money on each transaction they make. Poor people usually fall below that breakeven

point. A similar calculation resists efforts to deliver other financial services to poor

people.

In addition, most poor people have few assets that can be secured by a bank as collateral.

As documented extensively by Hernando de Soto and others, even if they happen to own

land in the developing world, they may not have effective title to it. This means that the

bank will have little recourse against defaulting borrowers.

Seen from a broader perspective, the development of a healthy national financial system

has long been viewed as a catalyst for the broader goal of national economic development

(see for example Alexander Gerschenkron, Paul Rosenstein-Rodan, Joseph Schumpeter,

Anne Krueger). However, the efforts of national planners and experts to develop financial

services for most people have often failed in developing countries

Because of these difficulties, when poor people borrow they often rely on relatives or a

local moneylender, whose interest rates can be very high. An analysis of 28 studies of

informal moneylending rates in 14 countries in Asia, Latin America and Africa

concluded that 76% of moneylender rates exceed 10% per month, including 22% that

exceeded 100% per month.

4|Page
Moneylenders usually charge higher rates to poorer borrowers than to less poor ones.

While moneylenders are often demonized and accused of usury, their services are

convenient and fast, and they can be very flexible when borrowers run into problems.

Hopes of quickly putting them out of business have proven unrealistic, even in places

where microfinance institutions are active.

Several Types of Needs

 Lifecycle Needs: such as weddings, funerals, childbirth, education, homebuilding,

widowhood and old age.

 Personal Emergencies: such as sickness, injury, unemployment, theft, harassment

or death.

 Disasters: such as fires, floods, cyclones and man-made events like war or

bulldozing of dwellings.

 Investment Opportunities: expanding a business, buying land or

equipment, improving housing, securing a job (which often requires paying a

large bribe), etc.

Poor people find creative and often collaborative ways to meet these needs, primarily

through creating and exchanging different forms of non-cash value. Common substitutes

for cash vary from country to country but typically include livestock, grains, jewellery

and precious metals.

The obstacles or challenges to building a sound commercial microfinance industry

include:

• Inappropriate donor subsidies

• Poor regulation and supervision of deposit-taking MFIs

5|Page
• Few MFIs that meet the needs for savings, remittances or insurance

• Limited management capacity in MFIs

• Institutional inefficiencies

• Need for more dissemination and adoption of rural, agricultural microfinance

methodologies

The proposed Microfinance Services Regulation Bill defines microfinance services as

“providing financial assistance to an individual or an eligible client, either directly or

through a group mechanism for:

i. an amount, not exceeding rupees fifty thousand in aggregate per individual,for small

and tiny enterprise, agriculture, allied activities (including for consumption purposes of

such individual) or

ii. an amount not exceeding rupees one lakh fifty thousand in aggregate per individual for

housing purposes, or

iii. such other amounts, for any of the purposes mentioned at items (i) and (ii) above or

other purposes, as may be prescribed.”

The proposed regulations further define an MFI as “an organisation or association of

individuals including the following if it is established for the purpose of carrying on the

business of extending microfinance services :

i. a society registered under the Societies Registration Act, 1860,88

ii. a trust created under the Indian Trust Act,1880 or public trust registered under any

State enactment governing trust or public, religious or charitable purposes,

6|Page
iii. a cooperative society / mutual benefit society / mutually aided society registered under

any State enactment relating to such societies or any multistate cooperative society

registered under the Multi State Cooperative Societies Act, 2002 but not including :

• a cooperative bank as defined in clause (cci) of section 5 of the Banking Regulation

Act, 1949 or

• a cooperative society engaged in agricultural operations or industrial activity or

purchase or sale of any goods and services.”

India is a country of villages even today but on account of lack of infrastructure resulting

in lack of opportunities for the population migration of youth continues unabated. The

urban centers are getting flooded with masses. To stop this migration we have to provide

opportunities to under privileged people of rural areas. Microfinance is a major tool

available to create opportunities and help people to raise their quality of life. Although

this fact is well established and understood the approach taken to achieve is yet to prove

itself and hence despite huge money being made available for these projects success is

nowhere visible. The business correspondent and business facilitator model envisioned

by RBI and commercial banks needs major revamp.

In the development paradigm, micro-finance has evolved as a need-based policy and

programme to cater to the so far neglected target groups (women, poor, rural, deprived,

etc.). Its evolution is based on the concern of all developing countries for empowerment

of the poor and the alleviation of poverty. Development organizations and policy makers

have included access to credit for poor people as a major aspect of many poverty

alleviation programmes. Micro-finance programmes have, in the recent past, become one

of the most promising ways to use scarce development funds to achieve the

7|Page
objectives of poverty alleviation. Furthermore, certain micro-finance programmes have

gained prominence in the development field and beyond. The basic idea of micro-finance

is simple: if poor people are provided access to financial services, including credit, they

may very well be able to start or expand a micro-enterprise that will allow them to

break out of poverty. Thus, micro-finance has become one of the most effective

interventions for economic empowerment of the poor.

Microfinance is the supply of loans, savings and other financial services to the poor. The

term―micro is in reference to the small amounts typically involved in the practice. These

services are small micro because a person who does not have a lot of money most likely

will not need a loan of several thousand rupees. However, a loan of a few hundred rupees

may make a huge difference in their lives, giving them the ability to purchase livestock

for a small farm, a sewing machine to help make accessories and clothes, or supplies for a

small store.

The poor throughout the developing world frequently are not part of the formal

employment sector. They may operate small businesses, work on small farms or work for

themselves or others in a variety of businesses. Many start their own ―micro businesses,

or small businesses, out of necessity, because of the lack of jobs available.

Microfinance refers to small scale financial services for both credits and deposits- that are

provided to people who farm or fish or herd; operate small or micro enterprise where

goods are produced, recycled, repaired, or traded; provide services; work for wages or

commissions; gain income from renting out small amounts of land, vehicles, draft

animals, or machinery and tools; and to other individuals and local groups in developing

8|Page
countries in both rural and urban areas‘- Marguerite S. Robinson. India puts stress on

providing financial services to the poor and underprivileged since independence.

The commercial banks were nationalized in 1969 and were directed to lend 40% of their

loan able funds, at a concessional rate, to the priority sector. The priority sector

included agriculture and other rural activities and the weaker strata of society in general.

The aim was to provide resources to help the poor to attain self sufficiency. They had

neither resources nor employment opportunities to be financially independent, let alone

meet the minimal consumption needs. To supplement these efforts, the credit scheme

Integrated Rural Development Programme (IRDP) was launched in 1980. But these

supply side programs (ignoring the demand side of the economy) aided by corruption and

leakages, achieved little. Further, The share of the formal financial sector in total rural

credit was 56.6%, compared to informal finance at 39.6% and unspecified sources at

3.8%. [RBI 1992]. Not only had formal credit flow been less but also uneven. The

collateral and paperwork based system shied away from the poor.

The vacuum continued to be filled by the village moneylender who charged interest rates

of 2 to 30% per month . 70% of landless/marginal farmers did not have a bank account

and 87% had no access to credit from a formal source. It was in this cheerless

background that the Microfinance Revolution occurred worldwide. In India it began in

the 1980s with the formation of pockets of informal Self-help Groups (SHG)

engaging in micro activities financed by Microfinance. But India‘s first Microfinance

Institution shri Mahila SEWA Sahkari Bank was set up as an urban co-operative bank,

by the Self Employed Women‘s Association (SEWA) soon after the group (founder Ms.

Ela Bhatt)was formed in 1974.

9|Page
The first official effort materialized under the direction of NABARD.(National Bank For

Agriculture And Rural Development).The Mysore Resettlement and Development

Agency (MYRADA) sponsored project on ―Savings and Credit Management of SHGs

was partially financed by NABARD during 1986-87(4) Section II: MFIs, Self Help

Groups , Income Generation and Women Empowerment Under the microfinance

programme, loans are extended to the ‗Self Help Groups (SHG)‘ who pool a part of

their income into a common fund from which they can borrow. The members of the

group decide on the minimum amount of deposit which ranges from Rs 20 to Rs 100 per

month depending upon the size of the group. The group funds are deposited with a Micro

Finance Institution (MFI) against which they usually lend (The deposits are usually

placed with a bank by the MFI) at a credit deposit ratio of 4:1 but the ratio improves with

account performance record i.e. prompt repayment of loans. The group fund is the way

micro savings‘ are enforced, though it may seem like collateral. The loan ticket sizes are

usually Rs 2000/- to Rs 15,000/-.

The MFIs stress on asset creation by the SHGs and extend loans for production and

provides training for the same. If any member needs credit beyond the stipulated limits

they are allowed to draw from group funds and the amount is settled in the periodic

(monthly) group meetings. SHGs consisting of poor members with identical

socioeconomic backgrounds are usually more sensitive to the credit needs of the poor.

Though loan repayment is a joint liability of the group but, in reality, individual liability

is stressed upon. Maintaining group reputation leads to the application of tremendous

peer pressure.

10 | P a g e
Loans obtained from MFIs are utilized in agriculture and small businesses. Independent

incomes and modest savings have made women self-confident and helped them to fight

poverty and exploitation.

In India and other Asian countries the majority of SHGs consist of women because, in

these countries, Self Employment through Microfinance was perceived as a powerful

tool for emancipation of women. It has been observed that gender equality is a necessary

condition for economic development. The World Bank reports that societies that

discriminate on the basis of gender are in greater poverty, have slower economic growth,

weaker governance, and lower living standards.

MICRO-FINANCE INSTITUTIONAL STRUCTURE IN INDIA

The different organisations in this field can be classified as "Mainstream" and

"Alternative" Micro Finance Institutions (MFI).

a. Mainstream Micro Finance Institutions

NABARD, Small Industries Development Bank of India (SIDBI), Housing Development

Finance Corporation (HDFC), Commercial Banks, Regional Rural Banks (RRBs), the

credit co-operative societies etc are some of the mainstream financial institutions

involved in extending micro finance.

b. Alternative Micro Finance Institutions

These are the institutions, which have come up to fill the gap between the demand and

supply for microfinance. MFIs were recently defined by the Task Force as "those which

provide thrift, credit and other financial services and products of very small amounts,

mainly to the poor, in rural, semi-urban or urban areas for enabling them to raise their

income level and improve living standards."

11 | P a g e
The MFIs can broadly be classified as:

1. NGOs, which are mainly engaged in promoting self-help groups (SHGs) and their

federations at a cluster level, and linking SHGs with banks, under the NABARD scheme.

2. NGOs directly lending to borrowers, who are either organised into SHGs or into

Grameen Bank style groups and centres. These NGOs borrow bulk funds from RMK,

SIDBI, FWWB and various donors.

3. MFIs which are specifically organised as cooperatives, such as the SEWA Bank and

various Mutually Aided Cooperative Thrift and Credit Societies (MACTS) in AP.

4. MFIs, which are organised as non-banking finance companies, such as BASIX,CFTS,

Mirzapur and SHARE Microfin Ltd.

THE PROBLEMS ASSOCIATED WITH MAINSTREAM MFIS

To enable the reach of micro finance services to the needy, the problems associated with

the legal, regulatory, organisational systems and the attitudes should be addressed to and

the desired changes brought in these, to make them more effective.

1. Borrower Unfriendly Products and Procedures

With a majority of the customers being illiterate, and a majority of them needing

consumption loans and a majority of them requiring high documentation and

collateral security, the products are not reaching the rural poor.

2. Inflexibility and Delay

The rigid systems and procedures result in lot of time delay for the borrowers and

demotivate them to take further loans.

3 High Transaction Costs, both Legitimate and Illegal

12 | P a g e
Although the interest rate offered to the borrowers is regulated, the transaction costs in

terms of the number of trips to be made, the documents to be furnished etc. plus the

illegal charges to be paid, result in increasing the cost of borrowing. Thus, making it less

attractive to the borrowers.

4 Social Obligation and not a Business Opportunity

Micro-finance has historically been seen as a social obligation rather than a potential

business opportunity.

PROBLEMS FOR ALTERNATIVE MICRO-FINANCE INSTITUTIONS

The main aim with which the alternative MFIs have come up is to bridge the increasing

gap between the demand and supply. A vast majority of them set up as NGOs for getting

access to funds as, the existing practices of mainstream financing institutions such as

SIDBI and NABARD, is to fund only NGOs, or NGO promoted SHGs. As a result, the

largest incentive to enter such services remains through the non-profit route. The

alternative finance institutions also have not been fully successful in reaching the needy.

There are many reasons for this:

•Financial problems leading to setting up of inappropriate legal structures

•Lack of commercial orientation

•Lack of proper governance and accountability

•Isolated and scattered

The Government of India and the RBI have a stated goal of promoting financial

inclusion. According to recent RBI estimat, there are over 450 million “unbanked people”

in India, most of whom live in rural areas.The term “unbanked” refers to people who

have no access to formal financial services, but rather must rely on either family, or

13 | P a g e
informal providers of finance, such as the village moneylender. It is undisputed that

access to finance is critical for enabling individuals and communities to climb out of

poverty. It is also generally agreed that relying on the limited resources of village

moneylenders exposes the poor to coercive lending practices, personal risks and high

interest rates, which can be a much as 150%

(i) The goal of financial inclusion must include the private sector.

Therefore the Indian Government and the RBI have a policy of “financial inclusion”. As

part of this policy, thegovernment requires Indian banks to lend to “priority sectors”, one

of which is the rural poor. Until recently, banks were happy to lend money to MFIs who

would then on-lend funds, primarily to poor women across rural India. The banks have

welcomed this policy because historically they tended to charge MFIs average interest

rates of 12-13% and benefited from 100% repayment rates. Thus, by lending to MFIs,

banks have been able to meet their “priority sector” lending requirements

(ii) currently being provided by three sectors: the government, the private sector and

charities. These three sectors, as large as they are, have only a small fraction of the

capital and geographic scale required to meet the overwhelming need for finance amongst

India’s rural poor.

The top 10 private sector microfinance providers in India together serve less than 5% of

the unbanked population of India – approximately 20 million clients. For example,

SHARE Microfin Limited (“SHARE”) and Asmitha Microfin Limited (“Asmitha”), two

of the five largest MFIs in India, have almost Rs 4,000 crore ($900MM) loaned to over 5

million poor women in 18 Indian states (prior to the crisis, the combined outstanding loan

14 | P a g e
portfolio had been as high as Rs 6,750 crore ($1.525BN)). Yet, despite the size of MFIs

like SHARE and Asmitha, only a fraction of the overwhelming need is being met.

Private sector MFIs have an essential role to play if the goal of financial inclusion is to be

realized, as neither the government nor charities have the capital nor business model

required to meet the insatiable demand for finance in rural India. As the public listing

of SKS Microfinance underscored, private sector institutions are able to attract

increasingly large amounts of private capital, in order to accelerate the growth of the

industry, which is essential to expanding financial inclusion as far.

MFIS GO FOR NBFC LICENCES

An Increasing number of microfinance institutions (MFIs) are seeking non-banking

finance company (NBFC) status from RBI to get wide access to funding, including bank

finance.

1. Exemptions granted to NBFCs engaged in microfinance activities

The Task Force on Supportive Policy and Regulatory Framework for Microfinance setup

by NABARD in 1999 provided various recommendations. Accordingly, it was decided

to exempt NBFCs which are engaged in micro financing activities, licensed under

Section 25 of the Companies Act, 1956, and which do not accept public deposits, from

the purview of Sections 45-IA (registration), 45-IB (maintenance of liquid assets) and 45-

IC (transfer of profits to the Reserve Fund) of the RBI Act, 1934. 010

2. MFIs & SHG-Bank linkage programme

In a joint fact-finding study on microfinance conducted by the Reserve Bank of India and

a few major banks, the following observations were made:

15 | P a g e
• Some of the microfinance institutions (MFIs) financed by banks or acting as their

intermediaries or partners appear to be focusing on relatively better banked areas,

including areas covered by the SHG-Bank linkage programme. Competing MFIs were

operating in the same area, and trying to reach out to the same set of poor, resulting in

multiple lending and overburdening of rural households.

• Many MFIs supported by banks were not engaging themselves in capacity building and

empowerment of the groups to the desired extent. The MFIs were disbursing loans to the

newly formed groups within 10–15 days of their formation, in contrast to the practice.

Obtaining in the SHG – Bank linkage programme, which takes about six to seven months

for group formation and nurturing. As a result, cohesiveness and a sense of purpose were

not being built up in the groups formed by these MFIs.

• Banks, as principal financiers of MFIs, do not appear to be engaging them with regard

to their systems, practices and lending policies with a view to ensuring better

transparency and adherence to best practices. In many cases, no review of MFI

operations were undertaken after sanctioning the credit facility.

3. RBI relaxes norms for NBFCs

NBFCs registered with the Reserve Bank of India may take part in the insurance agency

business on a fee basis and without risk participation or the need to seek the bank's

approval.

In a notification issued, the RBI said such NBFCs should obtain permission from the

Insurance Regulatory and Development Authority and comply with IRDA regulations for

acting as a "composite corporate agent" with insurance companies.

16 | P a g e
MICROFINANCE STANDARDS AND PRINCIPLES

Some principles that summarize a century and a half of development practice were

encapsulated in 2004 by CGAP and endorsed by the Group of Eight leaders at the G8

Summit on June 10, 2004:

1. Poor people need not just loans but also savings, insurance and money transfer

services.

2. Microfinance must be useful to poor households: helping them raise income, build up

assets and/or cushion themselves against external shocks.

3. "Microfinance can pay for itself."Subsidies from donors and government are scarce

and uncertain and so, to reach large numbers of poor people, microfinance must pay for

itself.

4. Microfinance means building permanent local institutions.

5. Microfinance also means integrating the financial needs of poor people into a

country's mainstream financial system.

6. "The job of government is to enable financial services, not to provide them."

7. "Donor funds should complement private capital, not compete with it."

8. "The key bottleneck is the shortage of strong institutions and managers." Donors

should focus on capacity building.

9. Interest rate ceilings hurt poor people by preventing microfinance institutions from

covering their costs, which chokes off the supply of credit.

10. Microfinance institutions should measure and disclose their performance—both

financially and socially.

17 | P a g e
Microfinance is considered as a tool for socio-economic development,and can be clearly

distinguished from charity. Families who are destitute, or so poor they are unlikely to be

able to generate the cash flow required to repay a loan, should be recipients of charity.

Others are best served by financial institutions.

MICROFINANCE AND SOCIAL INTERVENTIONS

There are currently a few social interventions that have been combined with micro

financing to increase awareness of HIV/AIDS. Such interventions like the "Intervention

with Microfinance for AIDS and Gender Equity" (IMAGE) which incorporates

microfinancing with "The Sisters-for-Life" program a participatory program that educates

on different gender roles, gender-based violence, and HIV/AIDS infections to

strengthen the communication skills and leadership of women "The Sisters-for-Life"

program has two phases where phase one consists of ten one-hour training programs with

a facilitator with phase two consisting of identifying a leader amongst the group, train

them further, and allow them to implement an Action Plan to their respective centres.

Microfinance has also been combined with business education and with other packages of

health interventions. A project undertaken in Peru by Innovations for Poverty Action

found that those borrowers randomly selected to receive financial training as part of their

borrowing group meetings had higher profits, although there was not a reduction in "the

proportion who reported having problems in their business".

Types of MF Providers

The different legal forms under which MF can be provided in India are:

• Commercial Banks

• Cooperative Banks

18 | P a g e
• Regional Rural Banks (RRBs)

• Local Area Banks (LABs)

• Cooperative Societies, SHGs and Federations

• Societies

• Trusts

• Section 25 (Not-for-Profit) companies

• Non-Banking Finance Companies (NBFCs)

• Organizations under Business Facilitator/Business Correspondent guidelines of the

Reserve Bank of India

Among these, the MFIs can either take up the form of a Society, Trust, Co-operative

Society, Section 25 Company or NBFC. however, estimates have put it anywhere

between 800 and 1,200. The overwhelming majority of MFIs are societies and trusts,

followed by cooperative and section 25 companies. Among the large MFIs, most are

NBFCs. It is estimated that top 20 MFIs account for 80% of the total portfolio.

According to CGAP, "Comprehensive impact studies have demonstrated that:

• Microfinance helps very poor households meet basic needs and protect against risks

• The use of financial services by low-income households is associated with

improvements in household economic welfare and enterprise stability or growth;

• By supporting women's economic participation, microfinance helps to empower

women, thus promoting gender-equity and improving household well-being;

• For almost all significant impacts, the magnitude of impact is positively related to the

length of time that clients have been in the program." (UNCDF Microfinance)

19 | P a g e
Poor people, with access to savings, credit, insurance, and other financial services, are

more resilient and better able to cope with the everyday crises they face. Even the most

rigorous econometric studies have proven that microfinance can smooth consumption

levels and significantly reduce the need to sell assets to meet basic needs. With

access to micro insurance, poor people can cope with sudden increased expenses

associated with death, serious illness, and loss of assets.

Access to credit allows poor people to take advantage of economic opportunities. While

increased earnings are by no means automatic, clients have overwhelmingly

demonstrated that reliable sources of credit provide a fundamental basis for

planning and expanding business activities. Many studies show that clients who join and

stay in programs have better economic conditions than non-clients, suggesting that

programs contribute to these improvements. A few studies have also shown that over a

long period of time many clients do actually graduate out of poverty.

By reducing vulnerability and increasing earnings and savings, financial services allow

poor households to make the transformation from "every-day survival" to "planning

for the future." Households are able to send more children to school for longer periods

and to make greater investments in their children's education. Increased earnings from

financial services lead to better nutrition and better living conditions, which translates

into a lower incidence of illness. Increased earnings also mean that clients may seek

out and pay for health care services when needed, rather than go without or wait until

their health seriously deteriorates."

20 | P a g e
FINANCING MICROFINANCE

Microfinance is a solution scalable to meet needs large and small. However, resources

provided by the international donor community and private philanthropists—traditional

sources of funds for microfinance—meet only a small proportion of the market demand.

Only the financial markets have the resources readily available to close this gap,

especially for those microfinance institutions (MFIs) that focus on the poorest people and

who, because of regulatory constraints, cannot provide savings accounts—a potential

source for financing that remains out of reach for many MFIs.

Grameen Foundation's Capital Management & Advisory Center (CMAC) connects

leading, poverty-focused MFIs with both local financial and capital markets, which

supports these MFIs’ efforts to make a difference in the lives of as many poor families as

possible. CMAC focuses on catalyzing financing for more MFIs and addressing market

gaps, namely:

• Most international financing is focused on the top tiered MFIs. According to CGAP,

21 | P a g e
90 percent of all international financing is to the Tier 1 MFIs and

• Over 70 percent of all international debt financing is in hard currency, exposing the

MFI to large foreign exchange risks. The center makes this possible in three ways:

• Developing and managing a range of Grameen Foundation-branded financial products

that are simple yet flexible and meet the needs of MFIs globally, and cater to a variety of

risk-return appetites among private funders.

• Establishing microfinance as a commercial investment opportunity by identifying,

negotiating, and executing capital market opportunities in local markets, as well as

presenting microfinance in terms that commercial investors understand.

• Emphasizing local markets as the primary source of MFI financing and spreading

Grameen Foundation capital markets knowledge to and replicating successes in countries

with large populations of poor people.

Microfinance institutions must be able to access capital to grow and continue to meet

demand. Despite increasing competition in some areas of the world, microfinance sectors

in many regions of the world have reached 10% or less of their potential demand.

Grameen Foundation currently has two offerings meant to increase MFIs’ access to

capital:

A. Supporting the Growth of High-Performing Microfinance Institutions

Grameen Foundation's Growth Guarantees program is one of the microfinance industry's

largest financing efforts dedicated to ensuring local currency financing for rapidly

growing MFIs. The structure of Growth Guarantees enables MFIs to borrow in their

local currency, which mitigates foreign exchange risk. The program is developed in

cooperation with Citigroup and donor-guarantors who provide their names and credit

22 | P a g e
while continuing to earn returns on their individual investment portfolios. The program

relies on a pool of $60 million to provide loan guarantees. The program is flexible

enough to support high-performing MFIs around the globe that aspire to expand rapidly

and are capable of managing sums of commercial financing. We leverage each guarantee

dollar on average four times to catalyze large amounts of local financing for MFIs.

Since it began in 2005, our Growth Guarantees program has leveraged $48 million in

donor funds into more than $200 million in local-currency funding for 24 MFIs, enabling

them to help more than 1.2 million new clients (mostly women).

B. Pioneer Fund

While the Growth Guarantees program targets more mature MFIs – those that are ready

and equipped to manage large amounts of commercial financing – GF is now intervening

in a systematic way to build up the next generation of MFIs. The Pioneer Fund will

bridge the funding gap by providing direct financing to the next generation of

microfinance institutions that are breaking barriers by working in remote or underserved

areas and using innovative products and services that meet the needs of the poor.

The Pioneer Fund will initially invest in a select group of high potential early stage MFIs

with catalytic financing to support their growth until they are able to access commercial

capital and expand their funding base. At the same time, this funding will educate MFIs

about the investor management process and help them advance along the funding

continuum from reliance on grants or soft loans to the more commercial sources of

financing that are critical to future growth. Pioneer Fund loans will go to high potential

emerging leaders in the microfinance sector. One key aspect of the Pioneer Fund is to

23 | P a g e
lead financing in markets that have not attracted much commercial capital, especially

those in Sub-Saharan Africa, and to invest in MFIs targeting poorer regions.

Microsavings

The poor lead very unpredictable financial lives. Their income arrives in irregular

increments and they struggle to build assets, leaving them vulnerable to financial shock.

Even if a poor person has access to microcredit, and is funding a small income-generating

business through it, a single unplanned event – a healthcare emergency, natural disaster

or other unexpected expense – can take away all the gains they’ve made. The poor need

access to formal financial tools that allow them to manage risk, build assets and manage

daily household cash inflows and outflows.

More one-third of the world’s population – 2.5 billion people – lack access to financial

services, including a savings account. Without access to formal savings, poor people use

informal and insecure saving methods, such as hiding cash or purchasing livestock. For

poor households, especially those living on less than $2.50 per day, formal savings

accounts are essential for creating stability and for moving out of poverty.

C.NABARD as Facilitator of microFinance

Besides, conceiving the SHG-Bank Linkage Programme two decades back, NABARD

had assigned to itself the role of a facilitator and a mentor of the initiative. The focus was

on bringing in various stakeholders on a common platform, building capacity among the

stakeholders to take the movement forward while extending 100% refinance to all banks

participating in the programme.

A large number of seminars, workshops and training programmes were organised to

create awareness about the microFinance programme among all the stakeholders – the

24 | P a g e
bankers, the Government agencies, the NGO partners and more importantly the SHG

members. The NGO sector who played the key role of organising and nurturing the

SHGs as the Self Help Promoting Institutions – later joined by many others including the

rural financial institutions, Farmers Clubs,etc. – were encouraged by way of promotional

grant assistance by NABARD for taking up such work.

The phenomenal growth of SHG-Bank linkage programme during the last 20 years owe a

great deal to these promotional efforts actively supported by NABARD and participated

by the stakeholders.

The rapid growth of the SHG linkage programme and its success in taking financial

services to the poor, led to its recognition as the most important tool for financial

inclusion – the main focus of the XI Five Year Plan. Simultaneously, efforts were

also on to experiment innovative initiatives in improving the efficacy and reach of the

programme with the involvement of all microfinance practitioners facilitated by

NABARD. A glimpse of the facilitator role played by NABARD, the ICT initiatives

taken, policy changes etc in this sector during 2011-12

D. Refinance to Banks

During the initial years of the movement NABARD was extending refinance to the extent

of 100%to banks for lending to SHGs since the SHG-Bank Linkage Programme was

launched. Initially, this was intended to encourage the banks to actively participate in the

programme. As the banks gained confidence in lending to SHGs and realised the business

potential in extending financial services through SHGs, they have been increasingly

deploying their own resources in a mutually beneficial relationship with the SHGs. SHGs

had been instrumental in bringing in more business for the financing banks by way of

25 | P a g e
improving credible client base, also promoting rural and inclusive banking. Banks have

also extended other financial services like remittance, housing, insurance,etc, though in a

limited way, to this segment. As a result, the banks have started “owning up”the

movement, as a sound business proposition and became less dependent on promotional

support from NABARD. The gap between the total loans issued by banks to SHGs and

the refinance extended by NABARD for such loans started widening . The refinance

support from NABARD, however, continues to supplement resource mobilisation for the

programme. During 2011-12, NABARD extended refinance to the extent of `3072.59

crore as against `2545.36 crore disbursed during the previous year. Cumulative

disbursement of refinance by NABARD for SHG lending now stands at `18479.60

crore.

MICROFINANCE IS NOT A SILVER BULLET

Microfinance is but one strategy battling an immense problem.

In the last two decades, substantial progress has been made in developing techniques to

deliver financial services to the poor on a sustainable basis. Most donor interventions

have concentrated on one of these services, microcredit. For microcredit to be

appropriate however, the clients must have the capacity to repay the loan under the terms

by which it is provided. Otherwise, clients may not be able to benefit from credit and risk

being pushed into debt problems. This sounds obvious, but microcredit is viewed by

some as "one size fits all." Instead, microcredit should be carefully evaluated against the

alternatives when choosing the most appropriate intervention tool for a specific situation.

Microcredit may be inappropriate where conditions pose severe challenges to standard

microcredit methodologies. Populations that are geographically dispersed or nomadic

26 | P a g e
may not be suitable microfinance candidates. Microfinance may not be appropriate for

populations with a high incidence of debilitating illnesses (e.g., HIV/AIDS). Dependence

on a single economic activity or single agricultural crop, or reliance on barter rather

than cash transactions may pose problems. The presence of hyperinflation, or absence of

law and order may stress the ability of microfinance to operate. Microcredit is also much

more difficult when laws and regulations create significant barriers to the sustainability of

microfinance providers (for example, by mandating interest-rate caps). microfinance can

not reach all economic segments of society, it has been shown to reach segments

previously un-serviced by other financial markets.

For some, microfinance is a movement whose object is "a world in which as many poor

and near-poor households as possible have permanent access to an appropriate range of

high quality financial services, including not just credit but also savings, insurance, and

fund transfers." Many of those who promote microfinance generally believe that such

access will help poor people out of poverty. For others, microfinance is a way to promote

economic development, employment and growth through the support of micro-

entrepreneurs and small businesses. Microfinance is a broad category of services, which

includes microcredit. Microcredit is provision of credit services to poor clients. Although

microcredit is one of the aspects of microfinance, conflation of the two terms is endemic

in public discourse. Critics often attack microcredit while referring to it indiscriminately

as either 'microcredit' or 'microfinance'. Due to the broad range of microfinance services,

it is difficult to assess impact, and very few studies have tried to assess its full impact.

Proponents often claim that microfinance lifts people out of poverty, but the evidence is

mixed. What it does do, however, is to enhance financial inclusion

27 | P a g e
SCOPE OF THE STUDY

Microfinance is but one strategy battling an immense problem. In the last two decades,

substantial progress has been made in developing techniques to deliver financial services

to the poor on a sustainable basis. Most donor interventions have concentrated on one of

these services, microcredit. For microcredit to be appropriate however, the clients must

have the capacity to repay the loan under the terms by which it is provided. Thus, the

scope of the study was limited to a study of micro finance facilities and analyzing the

awareness level of rural people about micro finance.

OBJECTIVES OF THE STUDY

The study is carried out to achieve the following objectives

 To find the awareness level of the rural people about the various schemes and

concept of Micro Finance.

 To study the awareness level of the people about Micro Finance.

 Role of NGO’s and other institutions to spread about Micro Finance.

This study was throw light on the awareness level of the people with respect to the

various schemes under micro finance.

HYPOTHESIS TO BE TESTED

To achieve the above said objectives following null hypothesis was framed

Ho.1 : Rural people is unaware of the concept of micro finance.

Ho.2 : People of Rural area of Jabalpur is aware about various schemes under micro

finance.

28 | P a g e
CHAPTER 2

REVIEW OF

RELATED

LITERATURE

29 | P a g e
Review of literature is a vital part of any research. It helps the researcher to know the

areas where earlier studies had focused on and certain aspects untouched by them.

The survey of related literature may be justified because it provides a firm and objective

ground to the research for identifying a meaningful questions in the field in which the

researcher wants to pursue. So, for a researcher if he/she wants to do research in a subject

and needs up-to-date information, it is necessary that the researcher should be fully

acquainted with the past of that subject.

Therefore, the investigator thought it pertinent to review the related researches and

literatures to study the specific problem.

Sharma and Deshmukh (2013) in their study entitled “A Study Of Micro Finance

Facilities And Analyzing The Awareness Level Of Rural People About Micro Finance In

Nagpur City” studied the awareness of microfinance in the Nagpur city. This study

found out that awareness of microfinance level is very high. Moreover The study

reveals that most of the poor people of Nagpur city are aware about micro saving

schemes and also these schemes are the most opted for options amongst the targeted

consumers.

Anand Kumar, T.S.; Praseeda, S.and Jeyanth K. N. (2008) explained in their paper titled

"Operational guidelines for sustainable housing micro-finance in India" that housing

micro- finance is emerging globally as an important financial activity to help alleviate the

housing needs of economically vulnerable people. Micro-finance institutions (MFIs)

planning to include housing product must carefully assess whether they have the

management and technical capacity to do so. The purpose of this paper is to give practical

guidance to MFIs in adopting the housing programme, in addition to their existing line of

30 | P a g e
micro-finance services. The paper finds that MFIs should also ensure that housing micro-

finance suits their strategy from institutional and financial perspectives.

Gordon, A.N. and others (2011) this paper aims to examine links between women's

access to micro-finance and how they use maternal healthcare services in sub-

Saharan Africa (SSA).It is found that improved access to micro-finance by women,

combined with education may enhance maternal health service uptake.

Kamath, R. and Srinivasan, R. (2009) Grameen replicators in India, using a for-profit

Non- Banking Finance Company legal form, have grown rapidly in terms of client

numbers. Loan sizes are relatively small compared to per capita income, while portfolio

quality was until recently very high. There is evidence in field of multiple borrowing,

with clients borrowing simultaneously from multiple sources including micro-finance

institutions. This research build a model of the microfinance sector that explains why

such multiple borrowings result optimally in small loan sizes and high portfolio quality.

Fields, G.S. (2010) this article is based on Fields (forthcoming) and on NCEUS (2009).

The first part of the paper about global poverty and how the world‘s poor work. As many

as six- and-a-half times the number of the unemployed are the working poor, which

indicates that the world has on employment problem. So does India. The second part of

the paper is about combating poverty in India and Internationally. The policies discussed

here are workplace protections, harnessing the energies of the private sector, economic

growth, labour market policies for generating more paid employment, the raising self-

employment earnings.

Fe Bureau (2009) the population living in poverty could fall to 6% in 2025 if aggressive

reforms are implemented, the report suggested. The country need four transition to

31 | P a g e
change the labour market and speed up poverty removal, these are farm to non-farm, rural

to urban, unorganized to organized and subsistence self employment to decent wage

employment. The report further added that 60% of country‘s workforce is engaged in

agriculture, generating 18% of the gross domestic product. Agriculture condemns many

Indian farmers to poverty because of low productivity. The key step that the country

should take to enable the transition from farm to non-farm employment is to move public

expenditure from input subsidies like fertilizers, seeds

DR.Anant Deshmukh (2012) The purpose of this article is to introduce the finance

academic community to the discipline of microfinance and microfinance institutions

(MFIs) address the issues of MFI sustainability, products and services, management

practices, clientele targeting, regulation and policy, and impact assessment.

N. Tejmani Singh (2009)The purpose of this article is to introduce that micro finance can

contribute to solving the problem of inadequate housing and urban services as an integral

part of poverty alleviation programmes. The challenges lies in finding the level of

flexibility in the credit instrument that could make it match the multiple credit

requirements of the low income borrowers without improving unbearably high cost of

monitoring to end use lenders. In the long run in a profitable manner; going by the

increasing number of commercial banks that have evinced interest in this area, the future

does seem bright.

Dr.C.Rangarajan (2006) in his topic ‘Microfinance and its future directions’ in the

introductory part of the book, outline the evolution of SHG through microfinance evolve

through in three stages. First, to meet survival requirement need, in the second stage is to

32 | P a g e
meet the subsistence level through investing in tradition activities and in the final stage

by setting up of enterprises for sustainable income generation.

Robert Peck Christen (2006) in his paper “Microfinance and Sustainable International

Experience and lesson for India”, he articulates the changing general perception of

bankers, that SHGs areprofitable clients or bank.

Lanmdau Mayoux’s study (1998) on Participatory Learning for Women’s Empowerment

in Micro Finance Programs (IDS Bulletin,Vol. 29 No.4, 1998) proposes a

participatory approach for integrating women’s empowerment concerns into ongoing

programs learning, which itself would be a contribution to empowerment. Micro finance

programs for women are currently promoted not only as a strategy for poverty alleviation

but also for women’s empowerment.

DR.Ashok (2012),in his paper “availability and awareness of microfinance in J&K

state”.this study found that micro finance institutions micro loans and credit is high.more

information regarding microfinance is provide by NGO and awareness towards

fund transfer and insurance is very poor.

Holt, (1994). The purpose of this article is to introduce that Village banks are

community- managed credit and savings associations established by NGOs to provide

access to financial services, build community self-help groups, and help members

accumulate savings.

Stefan Derconand Martina Kirchberger (2008) The purpose of this article is to introduce

that what are the changes coming in micro finance.

Malhotra (2002) constructed a list of the most commonly used dimensions of women’s

empowerment, drawing from the frameworks developed by various authors in different

33 | P a g e
fields of social sciences. Allowing for overlap, these frameworks suggest that

omen’sempowerment needs to occur along multiple dimensions including:

economic,socio-cultural, familial/interpersonal, legal, political, and

psychological.The World Bank defines empowerment as “the process of increasing

the capacity of individuals or groups to make choices and to transform those choices into

desired actions and outcomes.

“The Microfinance promise in Financial Inclusion: Evidence from India” by Naveen

K.Shetty and Dr.Veerashekharappa (2009) studies the importance of microfinance in

bringing about financial inclusion. The paper studies impact of the increasing gap in

demand and supply of financial services in India which has led to the increasing

population of the country to be excluded from the formal financial credit system.

“Financial performance of Microfinance Institutions: A comparison to performance of

Regional Commercial banks by geographic regions” by Michael Tucker and Gerald

Miles studies the performance of MFIs which are self-sufficient and comparing those

with the regional commercial banks based on selected financial ratios. Microfinance

institutions provide small loans to the rural low income population. However with

growth of the microfinance institutions and with increasing competition, the MFIs have

very limited access to funds.

“Microfinance in India: Discussion” by R.Srinivasan and M.S.Sriram shows the various

views of people from various microfinance institutions. Microfinance has been viewed as

an effective tool in bringing about financial inclusion and as a measure to alleviate

poverty. This discussion also is a study on the various models of microfinance prevailing

in India and aims to discuss if these models contribute to the growth and sustainability. It

34 | P a g e
also aims to discuss about the various government policies and regulatory framework

prevailing in microfinance sector.

35 | P a g e
 CHAPTER 3

RESEARCH

METHODOLOGY

36 | P a g e
Research methodology is a way to systematically investigate the research problem. It

gives various steps in conducting the research in a systematic and a logical way. It is

essential to define the problem, state objectives and hypothesis clearly. The research

design provides the details regarding what, where, when, how much and by what means

enquiry is initiated. Every piece of research must be planned and designed carefully so

that the researcher precedes a head without getting confused at the subsequent steps of

research. The researcher must have an objective understanding of what is to be done,

what data is needed, what data collecting tools are to be employed and how the data is to

be statistically analyzed and interpreted. There are a number of approaches to the design

of studies and research projects all of which may be equally valid. Research is a

systematic attempt to obtain answers to meaningful questions about phenomenon or

events through the application of scientific procedures. It an objective, impartial,

empirical and logical analysis and recording of controlled observation that may led to

the development of generalizations, principles or theories, resulting to some extent in

prediction and control of events that may be consequences or causes of specific

phenomenon. Research is a systematic and refined technique of thinking, employing

specialized tools, instruments and procedures in order to obtain a more adequate solution

of a problem than would be possible under ordinary mean. Thus, research always starts

from question. There are three objectives of research factual, practical and theoretical,

which gives rise to three types of research: historical, experimental and descriptive.

Research design has been defined by different social scientists in a number of ways. All

these definitions emphasize systematic methodology in collecting accurate information

for interpretation. Selltize et al. (1962) expressed their views as, “Research designs are

37 | P a g e
closely linked to investigator’s objectives. They specify that research designs are either

descriptive or experimental in nature.” Research design tells us how to plan various

phases and procedures related to the formulation of research effort (Ackoff Russell,

1961). Miller (1989) has defined research design, “as the planned sequence of the entire

process involved in conducting a research study.”

Kothari (1990) observes, “Research design stands for advance planning of the method to

be adapted for collecting the relevant data and the techniques to be used in their research

and availability of staff, time and money.” In this way selecting a particular design is

based on the purpose of the piece of the research to be conducted. The design deals with

selection of subjects, selection of data gathering devices, the procedure of making

observations and the type of statistical analysis to be employed in interpreting data

relationship”.

Research Design

This research is descriptive in nature. The descriptive method of research design

helps researchers plan and carry out descriptive studies, designed to provide rich

descriptive details about people, places and other phenomena. This type of research is

often associated with anthropology, sociology and psychology, but researchers in other

fields, such as education, use it. The descriptive method often involves extensive

observation and note-taking, as well as in-depth narrative.

Sampling Technique

For this study random sampling technique was used. It is the basic sampling method

assumed in statistical methods and computations. To collect a simple random sample,

each unit of the target population was assigned a number. A set of random numbers will

38 | P a g e
then generate and the units having those numbers was included in the sample. For

example, let’s say one have a population of 1,000 people and wish to choose a simple

random sample of 50 people. First, each person is numbered 1 through 1,000. Then,

generate a list of 50 random numbers (typically with a computer program) and those

individuals assigned those numbers are the ones include in the sample.

POPULATION OF THE STUDY

The area was studied according to the convenience.

100 respondents was randomly selected as they was arrived the banks.

DATA COLLECTION

Data collection is any process of preparing and collecting data, for example, as part of a

process improvement or similar project. The purpose of data collection is to obtain

information to keep on record, to make decisions about important issues, or to pass

information on to others. Data are primarily collected to provide information regarding a

specific topic

PRIMARY DATA COLLECTION

Primary Data:

Data that has been collected from first-hand-experience is known as primary data.

Primary data has not been published yet and is more reliable, authentic and objective.

Primary data has not been changed or altered by human beings, therefore its validity

is greater than secondary data.

1) A structured questionnaire was designed to collect the information from the people

residing in Rural area of Jabalpur.

39 | P a g e
Secondary Data:

Data collected from a source that has already been published in any form is called

as secondary data. The review of literature in any research is based on secondary data.

Mostly from books, journals and periodicals.

Secondary data Collection

1) internet website

2) journals.

3) NABARD report.

The data collected through the structured questionnaire was coded into excel sheet. The

data was analysed and tested using graphical tools like bar chats and histograms,

frequency cumulation and descriptive statistics (mean) and measures of dispersion

(Standard Deviation).

DELIMITATIONS OF THE STUDY

Following are some delimitations of the study:

 The study is delimited to the respondents of the Rural area of Jabalpur only.

 The study is further delimited to the 100 respondents only.

 Time and other factors, which are beyond human limitation, have also a bearing

on the study.

 Sample size taken for the study is quite small and it therefore not represent the

whole population.

 Some of the respondents not take interest in filling questionnaire.

 Some of the respondents give wrong answers due to lack of interest.

40 | P a g e
 CHAPTER 4

DATA ANALYSIS AND

INTERPRETATIONS

41 | P a g e
After collecting data, the investigator analysed the data as it was difficult to explain the

raw data because raw data gathered on certain tests have no meaning rather it is heap of

certain facts or observation. Keeping in view the objectives of the study and their

corresponding hypotheses, the data was statistically processed using appropriate design

and technique. Hence, after the data has been collected this must be processed an

analysed to draw proper inference.

Statistics is a good tool in the hands of a research. It can help in attaining some

objectives only if one is clear about the theoretical basis of the variables and their

relationship so it is necessary to interpret the result obtained statistically. It is only then

one can give meaning and direction to research. According to Good, Barr and Scates

(1941), “The process of interpretation is essentially, one of stating what the results

show? What they mean? What is their significance? What is the answer of the original

problem? ” That is all the limitations of the data must enter into and become the part of

interpretation of the result.

Thus, the analysis of data means studying the tabulated material in order to determine

inherent factors or meanings. It involves breaking down the existing complex factors

into simpler parts and putting the parts together in new arrangement for the purpose of

interpretation.

As it is of much importance to get a sum correctly solved. It is also equally important to

interpret it correctly. Interpretation is the most important step in the total research

process. It calls for a critical examination of the results of one’s analysis in the light of

all limitations of data gathered. Thus analysis and interpretations of data help

researchers to attack the related problems with appropriate statistical techniques to avoid

42 | P a g e
the unnecessary labour.

This chapter contains a detailed analysis of the data collected through the questionnaire.

The chapter has been divided in to three sections. The section I explain the

demographics of the respondents included in the research study. The second section

analyse the responses regarding awareness and sources of awareness regarding the

microfinance which fulfils our first objective. The section third pertains to the question

regarding the level of awareness for achieving the second desired objective.

43 | P a g e
 SECTION I

DEMOGRAPHICS OF THE RESPONDENTS

Age of the respondents

Table 4.1 Age of the respondents

AGE NUMBER OF RESPONDENTS

25-35 21

35-45 24

45-55 40

55-65 15

This table shows the age of respondents and people between the age of 45-55 is 40 and

Then is the between the age of 35-45is 24.between the age 25-35 is 21,and lower in the

age of 55-65 that is 15.

Figure 4.1

44 | P a g e
Education level of respondents

Table 4.2 Education level of respondents

EDUCATION NUMBER OF RESPONDENTS

ILLETRATE 0

SSC FAIL 8

SSC PASS 33

HSSC PASS 30

GRADUATE 27

ANY OTHER 2

This table shows the Education level of respondents there is more person that are

ssc passed{33},hssc pass are 30,graduate are 27and there is no illiterate out of these

respondents.

Figure 4.2

45 | P a g e
Marital status of respondents:

Table 4.3 Marital status of respondents

MARITAL STATUS NUMBER OF RESPONDENTS

MARRIED 95

UNMARRIED 5

This table shows the Martial status in this out of 100 respondents 95 are married and 5

are unmarried.

Figure 4.3

46 | P a g e
Occupation of respondents

Table 4.4 Occupation of respondents

OCCUPATION NUMBER OF RESPONDENTS

AGRICULTURE 50

BUSINESS 24

SERVICES 26

This table shows the Occupation of respondents in which mostly respondents are

working in agriculture (50).and then at 2nd place peoples are doing service (26) and then

business (24).

Figure 4.4

47 | P a g e
Total number of family members

Table 4.5 Total number of family members

TOTAL NUMBER FAMILY MEMBER NUMBER OF RESPONDENTS

LESS THAN 4 34

LESS THAN 8 65

LESS THAN 10 1

This table shows total number of family members in this less than 8 respondents are 65

and less than 4 are 34 and less than 10 are 1.

Figure 4.5

48 | P a g e
Earning members in family of respondents

Table 4.6.Earning members in family of respondents

EARNING MEMBERS IN FAMILY NUMBER OF RESPONDENTS

1 45

2 41

3 14

This table shows the Earning members in family of respondents in this there are more

respondents whose earning member is one and 2 earning members are at 2nd place.

Figure 4.6

49 | P a g e
Monthly income of respondents

Table 4.7. Monthly income of respondents

MONTHLY INCOME NUMBER OF RESPONDENTS

LESS THAN 15000 38

15000-20000 20

20000-30000 14

30000 & MORE 28

This table shows that there are 38 respondents whose monthly income is less than

15000.and 30000 and more are at 2nd place28, between 15000-20000 are 20 and

between 20000-30000 are 14.

Figure 4.7

50 | P a g e
Housing status of respondents

Table 4.8. Housing status of respondents

HOUSING STATUS NUMBER OF RESPONDENTS

RENTAL 5

OWN 95

This table shows that more the people have their own house.

Figure 4.8

51 | P a g e
Know about microfinance

Table 4.9 Know about microfinance

KNOW ABOUT MICROFINANCE NUMBER OF RESPONDENTS

YES 100

NO 0

This table shows that all the 100 respondents are aware about microfinance.

Figure 4.9

52 | P a g e
 SECTION-2

AWARENESS

Comparison of education and source of information of micro finance

Table 4.10 Comparison of education and source of information of micro finance

RELATIVES FRIENDS SHG OTHERS TOTAL

REPRESEN

TIVE

ILLETRATE 0 0 0 0 0

SSC FAIL 1 3 1 4 8

SSC PASS 2 12 4 17 33

HSSC PASS 2 13 13 4 30

GRADUATE 0 4 3 20 27

ANY 0 0 1 1 2

OTHER

8 32 22 46 100

This table shows the comparison between education and source of information of micro

finance it shows the respondents that are graduate get more information from banks,that

are ssc pass that also get information from banks 12 person that are ssc pass get

information from friends. ssc pass also get information from banks. 13 person that are

ssc pass get information from friends.SHG representative have less response of

awareness towards educated respondents.

53 | P a g e
Comparison of age and source of information of micro finance

Table 4.11 Comparison of age and source of information of micro finance

RELATIVES FRIENDS SHG OTHERS TOTAL

REPRESEN

TIVE

25-35 2 12 3 4 21

35-45 1 15 2 6 24

45-55 1 10 4 25 40

55-65 1 7 2 5 15

8 44 11 40 100

This table shows the comparison between age and source of information of micro

finance it shows the respondents that are between 45-55 get more information from

banks,and friend are also providing more information to the different age groups.SHG

representative have less response of awareness

54 | P a g e
Comparison of marital status and source of information of micro finance

Table 4.12 Comparison of marital status and source of information of micro finance

RELATIVES FRIENDS SHG OTHERS TOTAL

REPRESEN

TIVE

MARRIED 6 35 10 44 95

UNMARRIED 0 2 1 2 5

6 37 11 46 100

This table shows the comparison between martial status and source of information of

micro finance it shows the respondents that are married get more information from

banks,and afterwards get from friend .SHG representative have less response of

awareness

55 | P a g e
Comparison of income and source of information of micro finance

Table 4.13 Comparison of income and source of information of micro finance

RELATIVES FRIENDS SHG OTHERS TOTAL

REPRESEN

TIVE

LESS THAN 2 18 5 13 38

15000

15000-20000 1 7 3 9 20

20000-30000 0 6 1 7 14

30000 & 3 13 2 10 28

MORE

8 44 11 39 100

This table shows the comparison between income and source of information of micro

finance it shows the respondents that are income of less than 15000 get information from

friends and banks more. SHG representative have less response of awareness.

56 | P a g e
Source of information and microfinance schemes

Table 4.14. Source of information and microfinance schemes

MICRO MICRO SAVING TOTAL

CREDIT INSURAN SCHEMES

CE

RELATIVES 8 0 0 8

FRIENDS 51 11 14 76

SHG 31 6 7 44

REPRESENT

IVE

BANK 66 13 23 102

156 30 44

As this table shows the comparison of microfinace schemes and source of information of

MFIS THE study found that bank is playing a major role in awareness of micro finance

schemes and friend are at 2nd place to give information to people and shg

representateive have low role in awareness program as compare to friend and banks.

there is also one thing should be consider that micro insurance awareness is very less

among the respondents. they know more about the microcredit and afterwards saving

schemes.

57 | P a g e
Source of information and microfinance schemes

Table 4.15. Source of information and types of microfinance schemes

KCC SHG NARA NAP SCCY

RELATIVES 9 5 0 0 0

FRIENDS 30 28 25 18 19

SHG 22 19 6 8 4

REPRESENT

IVE

OTHERS 39 48 34 24 29

100 100 65 50 52

As this table shows the comparison of types of microfinace schemes and source

of information of MFIS we found that bank is playing a high role in awareness of micro

finance schemes and friend are at 2nd place to give information to people and shg

representateive have low role in awareness program as compare to friend and banks.

58 | P a g e
 SECTION 3

LEVEL OF AWARENESS

Statement -1,Microfinance is about lending in small amounts.

TABLE 4.16 Microfinance is about lending in small amounts

RESPONSE NUMBER OF RESPONDENTS

STRONGLY DISAGREE 5

DISAGREE 26

NEUTRAL 6

AGREE 35

STRONGLY AGREE 28

59 | P a g e
 One-Sample Statistics

N MEAN STD. STD. ERROR

DEVIATION MEAN

VAR00013 100 3.5500 1.28216 .12822

Above table shows the mean score of the respondents while answering the statement

“Microfinance is about lending in small amounts” . The mean score is 3.55 which shows

that respondents are aware about the statement 1 of the microfinance. The Standard

deviation is 1.28 which shows the variability among the responses of the respondents. It

shows that sample is not consistent in answering the facts about statement 1.

60 | P a g e
 One-Sample Test

TEST VALUE = 3

T DF SIG. (2- MEAN 95%

TAILED) DIFFERENCE CONFIDENCE

INTERVAL OF

THE

DIFFERENCE

LOWER UPPER

VAR00013 4.290 99 .000 .55000 .2956 .8044

The above table tests the null hypothesis of awareness regarding the above mentioned

statement.The low value of p(.000) shows that the 3.55 is significantly different from 3

which implies that customers are aware regarding statement1. Thus the null hypothesis

of no awareness is rejected to prove that respondents know that mf is about lending the

small amounts.

61 | P a g e
Statement -2,Microfinance is about Financing micro business.

TABLE 4.17.Microfinance is about Financing micro business

RESPONSE NUMBER OF RESPONDENTS

STRONGLY DISAGREE 5

DISAGREE 28

NEUTRAL 6

AGREE 44

STRONGLY AGREE 17

62 | P a g e
 One-Sample Statistics

N MEAN STD. STD. ERROR

DEVIATION MEAN

VAR00014 100 3.4000 1.20605 .12060

Above table shows the mean score of the respondents while answering the

statement “Microfinance is about Financing micro business ” . The mean score is 3.40

which shows that respondents are aware about the statement 2 of the

microfinance. The Standard deviation is 1.20 which shows the variability among the

responses of the respondents. It shows that sample is not consistent in answering the

facts about statement2.

63 | P a g e
 One-Sample Test

TEST VALUE = 3

T DF SIG. (2- MEAN 95%

TAILED) DIFFERENCE CONFIDENCE

INTERVAL OF

THE

DIFFERENCE

LOWER UPPER

VAR00014 3.317 99 .001 .40000 .1607 .6393

The above table tests the null hypothesis of awareness regarding the above mentioned

statement. The low value of p(.001) shows that the 3.40 is significantly different from 3

which implies that customers are aware regarding statement 2. Thus the null hypothesis

of no awareness is rejected to prove that respondents know that microfinance is about

Financing micro business .

64 | P a g e
Statement -3,Microfinance is about saving.

TABLE 4.18.Microfinance is about saving

RESPONSE NUMBER OF RESPONDENTS

STRONGLY DISAGREE 12

DISAGREE 6

NEUTRAL 18

AGREE 39

STRONGLY AGREE 25

65 | P a g e
 One-Sample Statistics

N MEAN STD. STD. ERROR

DEVIATION MEAN

VAR00015 100 3.5900 1.26407 .12641

Above table shows the mean score of the respondents while answering the statement

“Microfinance is about saving.” . The mean score is 3.590 which shows that respondents

are aware about the statement 3 of the microfinance. The Standard deviation is 1.26

which shows the variability among the responses of the respondents. It shows that

sample is not consistent in answering the facts about statement.

66 | P a g e
 One-Sample Test

TEST VALUE = 3

T DF SIG. (2- MEAN 95%

TAILED) DIFFERENCE CONFIDENCE

INTERVAL OF

THE

DIFFERENCE

LOWER UPPER

VAR00015 4.667 99 .000 .59000 .3392 .8408

The above table tests the null hypothesis of awareness regarding the above mentioned

statement. The low value of p(.000) shows that the 3.59 is significantly different from 3

which implies that customers are aware regarding statement 3. Thus the null hypothesis

of no awareness is rejected to prove that respondents know that microfinance is about

savings.

67 | P a g e
Statement -4: Microfinance is about providing insurance.

TABLE 4.19. Microfinance is about providing insurance.

RESPONSE NUMBER OF RESPONDENTS

STRONGLY DISAGREE 54

DISAGREE 39

NEUTRAL 7

AGREE 0

STRONGLY AGREE 0

68 | P a g e
 One-Sample Statistics

N MEAN STD. STD. ERROR

DEVIATION MEAN

VAR00016 100 1.5300 .62692 .06269

Above table shows the mean score of the respondents while answering the statement

“Microfinance is about providing insurance.” . The mean score is 1.53 which shows that

respondents are unaware about the statement 4 of the microfinance. The Standard

deviation is .626 which shows the variability among the responses of the respondents is

low. It shows that sample consistent in answering the facts about statement 4..

69 | P a g e
 One-Sample Test

TEST VALUE = 3

T DF SIG. (2- MEAN 95%

TAILED) DIFFERENCE CONFIDENCE

INTERVAL OF

THE

DIFFERENCE

LOWER UPPER

VAR00016 -23.488 99 .000 -1.47000 -1.5944 -1.3456

The above table tests the null hypothesis of awareness regarding the above

mentioned statement. The low value of p(.000) shows that the 1.53 is significantly less

from 3 which implies that customers are not aware regarding statement 4. Thus the null

hypothesis of no awareness could not be rejected.. Since the mean score is significantly

less than 3 it means that respondents are unaware about that insurance is also a part of

microfinance.

70 | P a g e
Statement -5, Microfinance is about fund transfer.

TABLE4.20 Microfinance is about fund transfer.

RESPONSE NUMBER OF RESPONDENTS

STRONGLY DISAGREE 54

DISAGREE 38

NEUTRAL 8

AGREE 0

STRONGLY AGREE 0

71 | P a g e
 One-Sample Statistics

N MEAN STD. STD. ERROR

DEVIATION MEAN

VAR00017 100 1.5400 .64228 .06423

Above table shows the mean score of the respondents while answering the statement

“Microfinance is about fund transfer” . The mean score is 1.54 which shows that

respondents are unaware about the statement 5 of the microfinance. The Standard

deviation is .64228 which shows the variability among the responses of the respondents

is low. It shows that sample is consistent in answering the facts about statement 5.

72 | P a g e
 One-Sample Test

TEST VALUE = 3

T DF SIG. (2- MEAN 95%

TAILED) DIFFERENCE CONFIDENCE

INTERVAL OF

THE

DIFFERENCE

LOWER UPPER

VAR00017 -22.731 99 .000 -1.46000 -1.5874 -1.3326

The above table tests the null hypothesis of awareness regarding the above

mentioned statement.The low value of p(.000) shows that the 1.540 is significantly

different from 3 which implies that customers are not aware regarding statement 5. Thus

the null hypothesis of no awareness could not be rejected. Since the mean score is

significantly less than 3 it means that respondents are unaware about that fund transfer is

also a part of microfinance.

73 | P a g e
Statement -6, Overall awareness of microfinance is reasonable.

TABLE 4.21 Overall awareness of microfinance is reasonable.

RESPONSE NUMBER OF RESPONDENTS

STRONGLY DISAGREE 39

DISAGREE 0

NEUTRAL 1

AGREE 42

STRONGLY AGREE 18

74 | P a g e
 One-Sample Statistics

N MEAN STD. STD. ERROR

DEVIATION MEAN

VAR00018 100 3.0000 1.65145 .16514

Above table shows the mean score of the respondents while answering the statement

“Overall awareness of microfinance is reasonable.” The mean score is 3.00 which

shows that respondents are neutral respondents are aware about some of schemes and

some of not the statement 6 of the microfinance. The Standard deviation is 1.50 which

shows the variability among the responses of the respondents. It shows that sample is not

consistent in answering the facts about statement 6.

75 | P a g e
 One-Sample Test

TEST VALUE = 3

T DF SIG. (2- MEAN 95%

TAILED) DIFFERENCE CONFIDENCE

INTERVAL OF

THE

DIFFERENCE

LOWER UPPER

VAR00018 .000 99 1.000 .00000 -.3277 .3277

The above table tests the null hypothesis of awareness regarding the above

mentioned statement. The value of p(1.000) shows that the 3.000 is not significantly

different from 3

The study thus fails to reject the null hypothesis of no awareness when it comes to level

of awareness. The respondents do know about the microfinance but are not aware

of the complete definition of the microfinance. The respondents are not aware of the

insurance and fund transfer scheme of the micro insurance.

The overall results suggest that the all respondents are aware of the microfinance but the

level of awareness is not high specially in case of micro insurance and fund transfer

activities of the micro insurance.

76 | P a g e
 CHAPTER 5

FINDINGS,

SUGGESTIONS &

CONCLUSIONS

77 | P a g e
 FINDINGS

Section I

Demographics of the respondents

 The study revealed that the age of respondents and people between the age of 45-

55(40) is more, Then is the between the age of 35-45(24), between the age of 25-

35(21). and between the age of 55-65(15).

 As far as education is concerned there is more person that are ssc passed{33},hssc

passed {30},graduate(27) and there is no illiterate out of these respondents.

 Under the martial status in this out of 100 respondents 95 are married and 5 are

unmarried.

 As far as occupation is concerned in which mostly respondents are working in

agriculture(50).and then at peoples are doing service(26) and then business (24).

 About total number of family members in which less than 8 respondents are 65

and less than 4 are 34 and less than 10 are 1.

 About the Earning members in family of respondents in this there are more

respondents whose earning member is one(45) and 2 earning members are

at(41)and 3 earning member is 14.

 As concerned about the monthly income there are 38 respondents whose monthly

income is less than 15000, 30000 and more are 28 , between 15000-20000 are 20

and between 20000-30000 are 14

 About housing status that out of 100 respondents 95 have their own house and

five are living at rental house.

78 | P a g e
 Section -2

Awareness

 All the 100 respondents are aware about microfinance.

 The study reveals the comparison between education and source of information of

micro finance it shows the respondents that are graduate get more information

from banks, that are ssc pass that also get information from banks 12 person that

are ssc pass get information from friends. ssc pass also get information from

banks. 13 person that are ssc pass get information from friends. SHG

representative have less response of awareness towards educated respondents.

 About the comparison between age and source of information of micro finance it

shows the respondents that are between 45-55 get more information from

banks,and friend are also providing more information to the different age groups.

SHG representative have less response of awareness.

 The study reveals the comparison between martial status and source of

information of micro finance it shows the respondents that are married get more

information from banks and afterwards get from friend .SHG representative have

less response of awareness.

 About the comparison between income and source of information of micro

finance it shows the respondents that are income of less than 15000 get

information from friends and banks more. SHG representative have less response

of awareness.

 About the comparison of microfinance schemes and source of information of

MFIS THE study found that bank is playing a major role in awareness of micro

79 | P a g e
 finance schemes and friend are at 2nd place to give information to people and shg

representative have low role in awareness program as compare to friend and

banks. there is also one thing should be consider that micro insurance awareness

is very less among the respondents. they know more about the microcredit and

afterwards saving schemes.

 About the comparison of types of microfinance schemes and source of

information of MFIS we found that bank is playing a high role in awareness of

micro finance schemes and friend are at 2nd place to give information to people

and shg representative have low role in awareness program as compare to friend

and banks.

80 | P a g e
 Section -3

Level of awareness

 About “Microfinance is about lending in small amounts”. The mean score is 3.55

which shows that respondents are aware about “Microfinance is about lending in

small amounts” . The Standard deviation is 1.28 which shows the variability

among the responses of the respondents. It shows that sample is not consistent in

answering the facts . The low value of p(.000) shows that the 3.55 is significantly

different from 3 which implies that customers are aware regarding statement1.

Thus the null hypothesis of no awareness is rejected to prove that respondents

know that microfinance is about lending the small amounts.

 About “Microfinance is about Financing micro business ” . The mean score is

3.40 which shows that respondents are aware . The Standard deviation is 1.20

which shows the variability among the responses of the respondents. It shows that

sample is not consistent in answering the facts , The low value of p(.001) shows

that the 3.40 is significantly different from 3 which implies that customers are

aware . Thus the null hypothesis of no awareness is rejected to prove that

respondents know that microfinance is about Financing micro business.

 About “Microfinance is about saving.” . The mean score is 3.590 which shows

that respondents are aware . The Standard deviation is 1.26 which shows the

variability among the responses of the respondents. It shows that sample is not

consistent in answering the facts . The low value of p(.000) shows that the 3.59 is

significantly different from 3 which implies that customers are aware regarding

81 | P a g e
 statement 3. Thus the null hypothesis of no awareness is rejected to prove that

respondents know that microfinance is about savings.

 “Microfinance is about providing insurance.” . The mean score is 1.53 which

shows that respondents are unaware. The Standard deviation is .626 which shows

the variability among the responses of the respondents is low. It shows that

sample consistent The low value of p(.000) shows that the 1.53 is significantly

less from 3 which implies that customers are not aware regarding statement 4.

Thus the null hypothesis of no awareness could not be rejected.. Since the

mean score is significantly less than 3 it means that respondents are unaware

about that insurance is also a part of microfinance.

 “Microfinance is about fund transfer ” . The mean score is 1.54 which shows that

respondents are unaware. The Standard deviation is .64228 which shows

the variability among the responses of the respondents is low. It shows that

sample is consistent. The low value of p(.000) shows that the 1.540 is

significantly different from 3 which implies that customers are not aware 5. Thus

the null hypothesis of no awareness could not be rejected. Since the mean score is

significantly less than 3 it means that respondents are unaware about that

insurance is also a part of microfinance.

 “Overall awareness of microfinance is reasonable.” The mean score is 3.00

which shows that respondents are neutral respondents are aware about some of

schemes and some of not.. The Standard deviation is 1.50 which shows the

variability among the responses of the respondents. It shows that sample is not

consistent. The value of p(1.000) shows that the 3.000 is not significantly

82 | P a g e
different from 3 The study thus fails to reject the null hypothesis of no awareness

when it comes to level of awareness. The respondents do know about the

microfinance but are not aware of the complete definition of the microfinance.

The respondents are not aware of the insurance and fund transfer scheme of the

microfinance. The overall results suggest that the all respondents are aware of the

microfinance but the level of awareness is not high specially in case of micro

insurance and fund transfer activities of the micro insurance.

83 | P a g e
RECOMMENDATION OF THE STUDY

Findings of the study shows that there all the respondents are aware about

microfinance .they get more information from banks about microfinance and role of SHG

representatives is very low. More the respondents are aware about Microcredit and saving

schemes and less aware about micro insurance and fund transfer.

The respondents are aware about some of schemes and some of not. The respondents

know about the microfinance but are not aware of the complete definition of the

microfinance. The respondents are not aware of the insurance and fund transfer

scheme of the micro finance. MFIs can start various programmes to promote micro

insurance and fund transfer. they should also work upon the role if SHG

representatives to promote micro finance schemes.

The overall results suggest that the all respondents are aware of the microfinance but the

level of awareness is not high specially in case of micro insurance and fund transfer

activities of the micro finance.

This study because of time and cost constraints has conducted on limited sample. this

study if done on a bigger sample size may give more reliable results. hence this topic

could be used and lead to further research by increasing the size of sample.

84 | P a g e
CONCLUSION:-

This chapter introduced the conclusion part. Microfinance is related to micro credits,,

micro insurance, and micro savings. People can take advantage about these schemes of

microfinance only when the MFIS can take necessary steps to enhance the role of SHG

representatives. this study examine the awareness level of the people about Micro

Finance. The objective of the study is also find the awareness level of the rural people

about the various schemes and concept of Micro Finance. all the respondents are aware

about microfinance .they get more information from banks about microfinance and

role of SHG representatives is very low. More the respondents are aware about

Microcredit and saving schemes and less aware about micro insurance and fund

transfer.as we know that more the population is living in villages so the awareness of

micro finance is very necessary so the people can be self dependent and can take

benefits facilities provided by MFIS for economic development.

The overall results suggest that the all respondents are aware of the microfinance but the

level of awareness is not high specially in case of micro insurance and fund transfer

activities of the micro finance.

85 | P a g e
BIBLIOGRAPHY

86 | P a g e
BILIOGRAPHY

K.G.Karmakar 1999,”Rural Credit and Self Help Groups- Microfinance needs and

Concepts in India.”

P.Satish, 2005”Mainstreaming of Indian Microfinance”.

Anand Kumar, T.S.; Praseeda S.and Jeyanth K. N. "Operational guidelines for

sustainable housing micro-finance in India", International Journal of Housing

Markets and Analysis, Vol. 1 I No.4, 2008:303-312.

Gordon, A.N. and others "Improving maternal healthcare utilisation in sub-Saharan

Africa through micro-finance", International Journal of Health Care Quality

Assurance, Vol. 24 Iss: 8, 2011:601-610.

Kamath, R. and Srinivasan, R. ‗‘Microfinance in India: Small, Ostensibly Rigid and

Safe,‘‘ 2009.

Fields, G.S. ―Earning their way out of poverty: A Brief Overview,‖ The Indian Journal

of Labour Economics, Vol. 53, I.No.1, 2010,

Fe Bureau ‗Reforms can reduce the size of poor to 6% by 2025‘, The Financial Express,

Mumbai, 2009: 4.

Wolfgang ,Hannover. : Impact of Microfinance Linkage Banking in India on the

Millennium Development Goals(MDG), in NABARD journal , May 2005.

Ajai Nair- Sustainability of Microfinance Self Help Groups in India: Would Federating

Help (2005)

Chakrabarti, Rajesh : The Indian Microfinance Experience-Accomplishments and

Challenges (2004)

87 | P a g e
Mahajan, Vijay (2005). “From Microcredit to Livelihood Finance”. Economic and

Political Weekly, October 8.

Bateman, Milford and Ha-Joon Chang (2009), “ The Microfinance Illusion”,

http://www.econ.cam.ac.uk/faculty/chang/pubs/Microfinance.pdf, accessed on

Sept. 30, 2009

Hulme, David, and Paul Mosley (1996). Finance Against Poverty. Routledge, London.

Mustafa, K., 1994, Cooperative credit and the rural poor: Lessons from experience,

Journal of Rural Development and Administration 26, 71-83.

Lanmdau Mayoux’s study (1998) on Participatory Learning for Women’s Empowerment

in Micro Finance Programs (IDS Bulletin,Vol. 29 No.4, 1998)

Singh, N. Tejmani (2009), "Micro Finance Practices In India: An Overview"

International Review of Business Research Papers Vol. 5 No. 5 pp 131-146.

Sharma and Deshmukh(2013) in their study entitled “A STUDY OF MICRO FINANCE

FACILITIES AND ANALYZING THE AWARENESS LEVEL OF PEOPLE

ABOUT MICRO FINANCE IN NAGPUR CITY” International Journal of Social

Science & Interdisciplinary Research____ IJSSIR, Vol. 2 (3), MARCH (2013)

(Source: Field Survey by Author and Impact Assessment of Microfinance in India-

Frances Sinha and the impact assessment team: EDA Rural Systems Pvt. Ltd,

Gurgaon, 2003)

Aggarwal ,Ashok “availability and awareness of microfinance in J&K state”international

journal of research in commerce,economics and management.VOLUME NO. 2

(2012), ISSUE NO. 2 (FEBRUARY)

88 | P a g e
Basu, Priya and Srivastava, Pradeep (2005), “Scaling-up Microfinance for India’s Rural

Poor” World Bank Policy Research Working Paper Number 3646, 30p

Chavan, Pallavi and Ramakumar, R. (2002), "Micro-Credit and Rural Poverty: An

Analysis of Empirical Evidence" Economic and Political Weekly, Vol. 37, No.10,

pp 955-965.

Morduch, Jonathan and Rutherford, Stuart (2003): “Micro Finance: Analytic Issues for

India” 25p.

Srinivasan, N. (2010), "Microfinance India-State of the Sector Report 2010" Financial

Inclusion—Reasons for hope, Chapter 10, Sage Publications India Pvt. Ltd,pp

109-120

Sriram, M. S. and Upadhyayula, Rajesh S. (2002), “The Transformation of the

Microfinance Sector in India: Experiences, Options and Future” Journal

ofMicrofinance Vol. 6 No. 2, pp 90-112.

Subbarao, Duvvuri (2010), "Financial Inclusion: Challenges and Opportunities", RBI’s

Monthly Bulletin.

Sijtsma, Liesbeth (2007): “Status Report Micro Finance in India” 50p.

Sankaran, M. (2005), “Micro credit in India: an overview”, World Review of

Entrepreneurship, Management and Sust. Development, Vol. 1, No. 1, pp 91–100.

Schreiner, Mark (2003): “A Cost-Effectiveness Analysis of the Grameen Bank of

Bangladesh” Senior Scholar Washington University, St.Louis, 53p.

Shastri, Rajesh Kumar (2009),“Micro finance and poverty reduction in India (A

comparative study with Asian Countries)” African Journal of Business

Management Vol. 3, No. 4, pp 136-140.

89 | P a g e
QUESTIONNAIRE

90 | P a g e
 QUESTIONNAIRE
What is your Name________________________________.

Address______________________________________ .

1. Age

• 25-35

• 35-45

• 45-55

• 55-65

2. Education

• Illetrate

• Sscfail

• Ssc pass

• Hssc pass

• Graduate

• Any other

3. Martial status

• Married

• Unmarried

4. Occupation

• Agriculture

• Business

• service

91 | P a g e
5. Total no of family member

1. less than 4_______

2. less than 8_______

3. less than 10______

6. Earning members in family ________________________

7. Monthly income

• Less than 15000

• 15000 to 20000

• 20000 to 30000

• 30000 to more

8. Housing status

• Rental

• Own house

9. Do you know about microfinance?

• Yes____

• No_____

10. from where you get information about microfinance schemes.

• relatives

• friends

• SHG representatives

• Others

11. Awareness about of various schemes of microfinance....

• Micro credit

92 | P a g e
• Micro insurance

• Saving schemes

12. what microfinance schemes have you heard about....

• Kcc

• SHG

• NARA

• NAP

• SCCY

13. Microfinance is about lending in small amounts.

• Strongly disagree

• disagree

• neutral

• agree

• strongly agree

14. Microfinance is about Financing micro business.

• Strongly disagree

• disagree

• neutral

• agree

• strongly agree

15. Microfinance is about saving.

• Strongly disagree

93 | P a g e
• disagree

• neutral

• agree

• strongly agree

16. Microfinance is about providing insurance.

• Strongly disagree

• disagree

• neutral

• agree

• strongly agree

17. Microfinance is about fund transfer.

• Strongly disagree

• disagree

• neutral

• agree

• strongly agree

18. Overall awareness of microfinance is reasonable.

• Strongly disagree

• disagree

• neutral

• agree

• strongly agree

94 | P a g e