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The range of microfinance services through SHGs in Pondicherry

The range of microfinance services through SHGs in Pondicherry

- A. Bharathy Parna Ray * & **

Pondicherry University College Comminity.

________________________________________________________________________

Abstract:

Poverty is and has always been the greatest socio-economic challenge for India. Over the years many measures the government is trying to help the poor through the implementation of various poverty reduction programs, but have met with little success.

It has now been recognized, that the basic need of the poorest populations' need for credit ", as they strongly prefer to start their own entrepreneurial activities as wages. The concept of micro-finance has spread extremely rapidly since its beginnings in the late 1970s, but whether and how to alleviate poverty has been a subject of intense Debate. In recent years, Micro Finance Institutions (MFIs) have begun a variety of services, including insurance and business development skills training offer. Most micro-financing schemes in India focus on women and the operation group (SHG) mechanism.

This paper, "The Reach of microfinance services through SHGs in Pondicherry, Puducherry, on the basis of the collected data, makes a study on the performance of the SHGs / MFI in the Union Territory and compares it with the successful MF companies in other parts of India. We found that an astonishing growth of this industry only from sunrise Catering to the objectives of the savings was a witness and self-employment in the government SHGs run contrary to a basket of new services such as the possession of a house (MAS Financial Services, Delhi), forging a strategic tie up deal (with Metro Cash & Carry, its products to 95 SKS Kirana shops supply) have been elsewhere, offered by MFIs in other parts of our country. The pattern of micro-credit use of the recipient and the range of credit plus services of the MFIs in Puducherry at the Creating awareness of various social problems, to discuss the empowerment of women - even in the newspaper.

Microfinance is one of the few market-based, scalable solutions to fight poverty, which is in India today, and the argument is to scale up to meet the overwhelming need is compelling. The paper concludes with some suggestions that will help unleash the entrepreneurial talent of the MFI of the people in the bottom row of Indian society would.

________________________________________________________________________

Author Details:

* A. Bharathy, Lecturer in Management, Department of Management, Pondicherry University Comminity College, is a Ph.D research scholar in Dravidian University.

** Parna Ray, Lecturer in Economics, Department of Management, Pondicherry University Comminity College, is a Ph.D research scholar at Mother Teresa Women's University, Kodaikanal. She has her doctoral thesis on "Structural Adjustments in the Indian economy presented - the impact on women's employment in urban Tamil Nadu. "

The range of Micro Finance Services by SHGs in Pondicherry

Poverty is a problem of global scale. It is estimated that half of the world's population, nearly 3 billion people, currently living on less than $ 2 per day.

The causes of poverty are numerous, but the consequences are endless. Unemployment, illiteracy, hunger, homelessness, polluted water, disease, and have an immeasurable impact on the lives of the poor around the world.

have over the years many of the government's measures tries to help the poor by the implementation of various poverty reduction programs, but with little success.

It has now recognized that both the need the poorest population groups, the demand for loans, since they strongly prefer to start their own business, instead of earning wages. There is some misunderstanding about the poor people who need them loans at subsidized interest rate on soft terms, they lack education, skills, capacities, Creditworthiness and to save that are not bankable. Nevertheless, experience shows that the poor are in rural areas actually efficient managers of credit and finance.

Poor people have an appetite for micro-loans to repay, and showed them. . Availability of timely and adequate credit for it, any economic Activities to pursue, rather than credit subsidy is essential. Even if it does not directly contribute to poverty reduction, to finance the mere access is a blessing.

The concept of micro-financing was provided by Mohammad Yunus, the Bangladeshi economist in 1976 and was successfully implemented in the Grameen Bank. The concept has since with the adaptation and evolution of Professor Yunus' ideas about different countries and contexts. The UN Year of Microcredit reported in 2005, a turning point for Microfinance and increased awareness about the prospects of the field in order to alleviate the poverty and the integration of the world's poor help themselves in the rapidly evolving global market.

Mohammad Yunus and the Grameen Bank were awarded the Nobel Peace Prize a year, for their contribution to reducing poverty in the world.

Micro Finance

Broadly speaking, micro-finance loans (ie, micro-credit) is to provide financial services to small people Access to traditional banking services is missing. The concept of microfinance usually implies very small loans to low-income customers for the independence, often with the simultaneous detection of small amounts of savings deposits. The design principles of microfinance are derived from the needs and socio-economic living conditions of the poor and have emerged from the experiences of microfinance institutions in the last two minutes three decades ago in the world. These design principles are:

• small saving or frugality by poor is possible, if collected at door;
• Poor people need small loans with collateral free frequency instead of large loan at a time;
• time constant and sufficient line of credit;
• simple application process
• Non-rigidity the end-use of the poor over rigid end use of small loans preferred;
• Repayment of existing family cash flow game
• relatively low running times are preferred, eg weekly, fortnightly, monthly, every six months, yearly, etc.;

It has been found that

• intensive care is necessary for microfinance operations;
• Women are better customers than men;
• and group lending method is more successful compared to individual loans.

Micro finance services

The most used service of the MFIs is micro-credit to begin to create, maintain, extend, or very small, self-sustaining businesses. Many microfinance programs provide Services through credit cards. The most basic such service that is providing savings of the poor in a safe place to save their money. Some MFIs compulsory savings per week from each borrower, and any group, some of these programs also collect voluntary savings, so that customers who order as much as they want deposit per week. MFIs have recently begun, a wide range of services, including insurance offer (life insurance and / or Health Insurance), business development skills training and remittances. A popular form of training is credit with education, developed by Freedom from Hunger, which includes modules on both business and health training.

Micro-finance interventions can on the basis of its span of activity, source of funds route, are identified by which it reaches the poor or the cover. However, it seems that one of the most common methods and approaches is the credit spread by Self-Help Groups. The approach is to SHGs, the most important Point of contact for all credit-route for the members. Almost all national funding agencies (NABARD, RMK) and other government regulations advocate of Self-Help Groups and are offering one way or the link with credit. However, many organizations also offer individual funding directly. It has been explained in the table below

A short history of microfinance in India

Microfinance has in practice for ages (though unofficially). The cooperative movement to 1904 and the Agricultural Credit Department set (RBI Act, 1934) sowed the seeds of micro-finance activities in India.

The post-nationalization Period in the banking sector, circa 1969, there was a significant

Amount of funding provided to meet the credit needs of the poor. Credit came as a remedy for many of the evils of poverty are recognized. It produced more pro-poor financial services, supported by both the state and central governments, the Loan packages and programs specifically included on the perceived needs of the poor. The pioneering work in this were from National Bank for Agriculture and Rural Development (NABARD), which was given the task of developing appropriate policies for rural credit, the provision of technical assistance support to the liquidity Banks, supervision of rural credit institutions and other development initiatives.

In the early 1980s, the Indonesian government, the Integrated Rural Development Programme (IRDP), a large poverty alleviation loan program that provided government-subsidized loans

by banks for the poor. It was the objective that the poor would be able to take advantage of cheaper credit in order to finance the poverty line.

Also during this Time NABARD conducted a series of studies independently and in conjunction with MYRADA, a leading non-governmental organization (NGO) from South India, the showed that despite a wide network of rural bank branches servicing the rural poor, a very large number of absolute poor continues outside the fold the formal banking system to stay.

Against this background, the need for alternative policy felt, systems and procedures, savings and credit products, other additional services and new mechanisms that would meet the needs of the poorest, especially women in these households. The focus was therefore, on improving access of the poor to microfinance is not only micro-credit.

has to answer to the need for microfinance to the poor in the past 25 years a large number of microfinance programs, see the support from the government and NGOs. In 1999, the Indonesian government merged together various loan programs, refined and she started a new program called Gram Swaranjayanti Swarazagar Yojana (SGSY). The mandate of SGSY is still subsidized loans for the poor by the banking sector recording to generate self-employment through a self-help group approach and the program has grown to enormous size.

The Microfinance sector has reported a stunning growth with a total coverage of the sector is estimated to 76.6 m (2009) to 59m (2008). MFI's in the country have a customer base of 22.6 million as of March 2009, the recording reported an increase of about 8.5 m clients during the year - a growth of 60% last year (State of the Sector Report 2009). For the purposes of REACH, with the exception of South India, where microfinance has in the past two - three years, it also states like Madhya Pradesh, Uttar Pradesh and West Bengal distribution concentrated. Despite the global liquidity crisis, growth of the country Mf-sector remains robust.

In various countries around the world various microfinance operating models are as follows:

Grameen Bank in Bangladesh model: This model provides in principle Financing for entrepreneurial women have smaller works.

The second model is called Model Village Bank. This model includes an implementation structure that individual banks village of about 30-50 members and offers "external" capital for further transport into the Financing of individual members.

The third type of MF model is a Credit Union, the community is based on the concept. It is in the nature of the non-profit cooperative financial owned and operated by its members.

A fourth model, originating in India based on Self-Help Groups (SHGs). Each SHG is formed with about 10-15 members, which are relatively homogeneous in income. The self-help groups (SHG) are essentially informal voluntary associations of people formed around a common goal. People who are homogeneous in terms of social background, heritage, traditional caste occupations or come together for a common to collect and manage their collective savings matter for the benefit of all members of the group. In general, the focus is on poor and to women. In fact a lot of micro-financing schemes are now increasingly on women. There are compelling reasons for it.

Women are perhaps the hardest hit by poverty because it up to 70 percent the population to earn their living on less than $ 1 per day. Worldwide, women earn only 10% of global income. In India, the trickle-down effect macroeconomic policy failed to solve the problem of gender inequality. Women have been the weakest part of society and represent a significant Segment of the population fought poverty. Microfinance has come as a miracle, these poor women.

Micro loans are solely on this group of women. There are several reasons for this: among the poor, the poor, women are most disadvantaged, they are characterized by lack of education and access of resources, both required to help them, their way out of poverty and for the positive economic and social mobility. It turns out that groups are better customers than women Men better managers of resources. If loans by women benefits of the loans are wide spread are routed between the budget.

Take In Manjula, a 40-year-old seamstress in Bagalur, a village lives 90 minutes from downtown Bangalore, was fighting for her two children without the help of her alcoholic to support man. It hung from money lenders, up to 1,000 percent a year for free.

Two $ 220 micro-loans over two years enabled her to open You are a business with saris, which she had been peddling their homes. Since then she has increased her monthly income of $ 45 to $ 110, including revenue from Side jobs tailoring and teaching sewing classes. That's enough pay off their loan and save $ 30 per month. "My dream is to transform the town into a big business," she says proudly.

started on Sadasivapet village about 80 km from Hyderabad Susheela has taken a small shop with a loan of Rs.4000 from SKS MF 8 years. Subsequent loans have allowed her to expand her business and her latest loan is for Rs 25,000.

A review of the only a fraction of the wealth of literature on groups and MFIs also confirm that SHGs seen many benefits given to both for the economic and social poverty. Support groups allow their female members to grow their savings and credit, banks are increasingly willing to to give access. But there are also some questions. How effective are the groups in managing their financial transactions? Are the groups using the loan sustainable Income generation? Do the poorest benefit at all or they do not join when they join, they are more likely to drop out? A study in 2000 EDA Rural Systems Pvt Ltd in collaboration with Andhra Pradesh Mahila Abhivruddhi Society f or NABARD investigated such issues, India is based on fieldwork in four states, presents a reality check of "what really happened."

Nirmala V, K. Sham Bhat and P. Bhuvaneshwari (2004) in their study "SHG for poverty reduction in Puducherry have discussed the performance and impact of SHG's their empowerment of rural poor women in Pondicherry region and the study has an understanding of the functioning of the SHG's were in rural Pondicherry.

Ahijit Banerjee, Esther Duflo and et al. (2009) randomized in her paper "The Miracles of Microfinance? Findings of a Evaluation Report on the intervention of micro-credit in a market mew (Hyderabad). They show that the intervention increased the total MFI loans and they studied the impact on the creation and the viability of small enterprises, consumption and investment.

Sukhwinder Singh Arora, (2005) points out that savings are services of many customers longer needed and as often as access to telephone services. Many poor households value access to savings, but lack of safe and accessible savings services for the short, medium and long terms. In the past, many banks have sent collectors but these savings Problems with monitoring, the inability to cope with embezzlement and the growing aspiration of collectors collect, which are permanent staff in public banks a useful service killed.

Guide for Micro Finance - India (2009) by Netscribes (India) Pvt. Ltd., Knowledge consulting and solutions company, provides an overview of the current state of microfinance in India extensively covers the two primary Mediator of microfinance - Microfinance institutions (MFIs) and SHG's bank linkage program (SBLP).

Jai Kumar (2009) reported that self-help groups (SHG) in Tamil Nadu to help women in rural areas become independent by opening new paths of employment. With the help of the State and central governments, women resident in Krishnagiri District in Tamil Nadu have cottage industry set to different products ranging from soft toys, beautiful accessories . Make Workers involved with the SHGs earn a decent sum for a living.

The sixth in a series of annual summits Services organized by ACCESS Development, was this year's Microfinance India Summit 2009 was held on October 26 to 28. Over the years, the microfinance India summit appeared to be the most important global sectoral platforms have become, to deepen the integration of debate and thought leaders in important current issues in the industry.

To solve the problem of national and regional economic disparities has skew MF India Vision Document, it creates State (2009). To date, much of India's microfinance movement has grown, especially in the southern states. Thirteen priority countries that remain account for 67% of the poor rather underserved. The State called Visioning Initiative as one or two states in the outlined underserved regions and tries to bring together all stakeholders in order to create a unified vision for the region. This initiative is an inventory of financial, human and institutional resources to the sector in the state support and omissions in the industry, so that greater clarity for the roles and responsibilities of different stakeholders.

In order to better chronicle the experiences and developments the micro finance industry in India the year, the MF India has also launched a platform of his annual "State of the Sector Report" (2009). The report will highlight and present perspectives on current issues and new document of interest, investment and innovation in the industry. Moreover, existing gaps in knowledge to conclude that require further research, statistical efforts, and empirical support. In the past two years, the state of the sector was one of the most useful considered reference document for Microfinance India, both within and outside the country.

Despite the major growth markets for microfinance, have and show the results of several studies, that is not feasible for the poor cast, there are issues that affect MFIs. After all micro finance still a young industry. We do not understand the fundamental impact or relative values of the different models. Many misconceptions about microfinance prevail even today. to understand questions such as:

• why 56% of the poor in India still borrow from informal sources,

• why 70% of the Poor in rural areas is still not running on an account.

• Poor people commit suicide because of peer pressure from organizations for the repayment.

To continuously research in Micro Finance is required. The present study is a small attempt in that direction. Microfinance providers in India can be divided into three broad categories: formal, semi formal and informal.

The formal sector includes banks such as NABARD, SIDBI and other regional rural banks (RRBs).

The majority of institutional microfinance provider in India are semi-formal organizations described largely as MFIs. Registered under a variety of legal acts of these organizations vary widely in philosophy, size and capacity. There are over 1,000 non-governmental organizations (NGO) registered as societies, trusts, public or non-profit Swayam Krishi Sangam companies such as (SKS India), Self Help Women's Association (SEWA), Mysore Resettlement and Development Agency (MYRADA) etc. ..

In addition to family and friends, moneylenders, landlords, and traders are the informal Sector. While estimates vary considerably its importance, it is undeniable that they continue to play an important role in the financial life of the poor.

This paper, based on the data collected from the Union Territory of Pondicherry makes a study on the performance of these three sectors.

Objectives of the study

In order to assess

• To study the pattern of credit use by the recipients and to analyze it, whether MF has in the sustainable production income from activities that led to the economic empowerment of the beneficiaries.

• To assess the scope of credit plus services of MFIs in creating awareness about various social problems, to the empowerment of women.

• To compare the performance of MF services in Pondicherry with some MF successful companies in other parts of India.

Methodology & Data Source:

The data used in this document has been both the primary and secondary sources were collected. For collection of primary data was a comparative survey of the reach of microfinance services through SHGs, public and private sectors represent different types of run rate out of UT as Lawspet, Ousteri, Sultanpet etc.. The surveyor of the data collected from various sources such as government organizations, banks, NGOs, and by actual Interaction with the recipient's structured questionnaire and interview method. The sample size is 145 beneficiaries, representing 10 SHGs The research is analytical In which we have been using the numbers, facts and information, they analyzed and conclusions were drawn in order to make a critical assessment.

Data Analysis and discussion

The analysis and the results were presented in five parts.

Table 1 SHG Profile:

Variables

Government run SHGs

NGO run SHGs

No: the groups

5

5

Total Members

65

80

Membership Type

Female:

Male / Mixed:

100%

-

57%

43%

Objectives of SHG

Savings:

Self-Employment:

80%

20%

60%

40%

Future vision of SHG

Savings:

Self-Employment:

10%

90%

12%

88%

Time of the operation

<5 years:

Over 5 years:

24%

76%

65%

35%

Source: from Primary data calculated

From the data presented in Table 1, we see that the government run SHGs covered by an average of 13 women members have usually in operation for more than five years. You start with an objective of generating funds through regular small savings by each member to their contingency to meet requirements.

The ultimate vision is the eradication of poverty through sustainable self-employment ventures. The privately owned SHGs have different Memberships 15 to 20, and a few of them even had the male members among their groups. The majority of the groups had begun to return only 2 -3 years. A few Groups (formerly operated by NGOs known for 5-8 years) were found to be concluded in the recent past. Your goals and future goals are more or less in Consistent with the government running SHGs.

Table 2 shows the image of a typical beneficiary than married women-mother three children - mostly unskilled only one Primary education. The beneficiaries are mostly housewives. While the government regulations to meet young women from BPL families, the privately-run SHGs are heterogeneous both regarding the age and economic status.

Table 2: Demographic profile of the SHG members

AVG Age of SHG members

Government run SHGs

NGO run SHGs

<35 years:

> 35 years:

80%

20%

20%

80%

Marital Status

Married:

Unmarried:

95%

5%

95%

5%

AVG No: Children / Member

3

3

AVG Girl: Boy Child

02:01 Clock

02.01 Clock

Education Profile

<10'th Std:

> 10'th Std:

60%

40%

80%

20%

Professional status

House Wife

Self Employment:

Other services:

Skill level for the independence

Skilled:

Unskilled:

25%

75%

20%

80%

Economical status

Red card:

Yellow card:

100%

-

60%

40%

Source: Calculated from Primary Data

Table 3 SHG Operational Profile:

Variables

Government run SHGs

NGO run SHGs

Frequency of meetings

Weekly:

Monthly:

Fortnightly:

90%

10%

-

40%

-

60%

Frequency of interest payments

Monthly

Monthly

Savings / Member

Rs.100

Rs.100 (60%)

Rs.105 (40%)

Loan taken

<5000:

5000-10000:

> 10,000:

60%

20%

20%

-

20%

80%

AVG repayment rate

1.8 Paisa

1 Paisa

Training for social activities

100%

60%

Training for independence

67.5%

43%

Contingency Fund

100%

55%

Source: Calculated from Primary Data

Table 3 gives us a clear picture of the difference between the operational Styles of government and privately run SHGs.It is obvious that the government's SHG follow a uniform method of weekly meetings with various loan programs Subsidy, apart from loans from the group savings fund to run. In contrast to this observation, as the private SHG's no other source of funds other than the group to give money back to their members and there is no mandatory provision of funds for contingencies. Although the recovery rate is lower rate than the government, is not in this case, the loan amount granted as a subsidy in state loans. Government run SHG's show higher efficiency by offering varied courses for social awareness and opportunities for self-generation.

Table 4 Use Credit Profile:

Variables

Government run SHGs

NGO run SHGs

Consumption

61%

85%

Income-generating activities (Farm)

9%

6%

Income-generating activities (non farm)

30%

9%

Source: calculated from primary data

Table 4 shows that credit use is not structure the objectives were developed for the micro-systems. The Most funds are not responsible for income generation activities, but have spent their way to their household consumption requirements such as purchase of household goods, Festival expenses, jewels and sometimes make investments in the education of the children found.

So We can see that the Micro Finance - SHG linkage has many had a significant impact on the lives of poor women. On the positive side:

• Evidence suggests that micro credit has important implications on household spending improves so does the standard of living of the family. A few households appeared to use micro-credit to expand the family business in particular those of male members, such as iron-Shop run, a hairdresser, had small carriers, feed etc Business A few women members in the construction of juice shops, Tiffin dared centers, idle mixture and powder stores, florist, etc

• There is no doubt women whose status in the budget has improved, especially when they have become successful entrepreneurs. Even where income effects are small or men have the loan is used is the fact that microfinance programs have thought worth targeting women have given this realization, at least some women have more value and respect within the household.

• Savings, women with a means for building an asset base. There have been cases where we have women who have come alone, the family raised from the depths of poverty, even when the male members have failed to assume their responsibility.

• Small successes have given them the confidence to greater dream for the future expansions. It is likely that changes are linked to individual, household and community level with each other and that individual Women who gain respect in their households then act as role models for others what a wider process of change in community perceptions.

• Micro-finance has also been used strategically by some NGOs as an entry point for broader social and political mobilization of women around gender issues such as domestic Violence, alcohol abuse and male dowry.

But the question of MF LED development requires further examination, as there are several shortcomings, clearly evident:

• The study found that most women invested the loan amount either in consumption or not very necessary in existing business activities, the uncertain and small profit is generated. about 65-70% of women invested the money in their husbands' activities. In many programs and contexts, it is only in a minority of cases, women have developed lucrative activities, but their own through micro-loans.

• save print - "saving" is the basic motive of this scheme - women can mean waiving their own consumption necessary. Small increases in access to income and can therefore influence at the expense of the heavier work loads, increased stress and health of women.

• Although in many Cases, women increased contribution to household well-being has improved domestic relations, in other cases it intensifies tensions because there is evidence of Men pull their contributions are expected from certain types of household expenditure that the women take care of them.

• For some Women micro-finance has a positive disempowerment. Where women are not able to significantly increase income under their control, they have to be dependent on loans to pay off previous loans. Credit used mainly for consumer loans, by successive incremental credit, many poor families have a permanent debt trap in severe poverty leading pushed

• Failure to repay loans on time serious burden on the networks of the bad payers with other women asked and we came to cases in which women were forced to leave the SHG due to pressure from other members.

• While micro-credit in the change in the pattern of household expenditure, and has succeeded in a few cases - the creation and development of businesses, there seems no obvious Influence on education, health, have or women's empowerment. Of course, after a long time, if the impact investment in higher overall spending can have translated to more households, it is possible to occur the impact on education, health and empowerment of women would.

• Interestingly, while in informal discussions with the respondents, a few women complained about the time-consuming Sunday meetings, we found that most of the time this meeting a little more than recreational get-together, where the women were observed just TV series and enjoyed their tea and chats!

Special Comments on Puducherry

The study focuses on the comparative performance of SHG's in Puducherry in comparison with some of the most successful MF companies in other parts of India.

As Puducherry Union Territory has the advantage that a surplus credit state because it rewards the of the state and central government on the economic emancipation of the people on the bottom line of society enjoys. As poverty is less that has satisfied the people and are not motivated to work hard for a sustained effort of entrepreneurship.

As for the MFI in its methodology SHG selection does not follow a sharp and foolproof method of group selection, order and payment. Ideally, beneficiaries must be selected according to a well-defined process, such as:

Market survey
Find the right people
Bringing them together
Training
Review
Identify leaders and one deputy Group leader
Make sure they understand their liability scheme

Because of their sharpness, as many people as possible, it has only resulted in overlapping Memberships, leading to multiple loan was trap.It debt seen that the private MFIs not close to compete with the lucrative state their systems Shops

The Economic Empowerment in the SHG's started by SKS Microfinance (Hyderabad) seen Sulaxmi (Delhi), MAS Financial Services (Delhi), both because of their innovative approaches and products, and continuous monitoring, training, strict supervision. For example: Sulaxmi currently offers a number of micro-credit products specifically to meet their customers want. Sulaxmi focuses on income generation loans also taking care of other needs of their customers. Sulaxmi analyzed continuously meet the changing needs and demand of its customers and re-design or introduces new loan products accordingly.

While Shuruaat (case 3,000 - Rs 10,000) is a start-up loans for entrepreneurs in the early phase of their business. Protsahan (Rs 12,000 - Rs 18,000) is a Loans for small businesses struggling to advertising, the Vikas (Rs 20,000 - Rs 28,000) a loan suggests that the borrower has demonstrated clearly be Rs / her zeal for the success and Manzil (-. 30 000 Rs 50,000) is the largest credit available with the company, which ultimately graduates the borrower, funds from banks and other large financial institutions.While attract the interest rate is 17.52% daily for all systems with repayment options weekly and monthly. Here in Puducherry they do not know how to spend even a loan of Rs.5000 or more on productive uses, although comparatively cheaper loans.

Conclusions

Micro Finance is not directly on some structural problems of Indian society and the economy, and it is still not as efficient, how it be, if economies of scale are realized, creating a supportive political environment. However, microfinance is one of the few market-based, scalable anti-poverty solutions which is in place in India today, and the argument that it scale up to meet the overwhelming need is compelling. MF in India, the poor on the streets brought prosperity by following some simple guidelines such as:

• There should be a sense of responsibility to employees and adequate training of all MFIs should be given to them.
• There should be more open to the competence of the borrower in order to sensitize them and also about the proper use making of the loan taken.
• One way of extending the successful operation of the microfinance institutions in the informal sector is through increased Networking with their formal sector counterparts. An advantageous for both sides of partnership should be based on comparative strengths of each sector.
• A Partnership should be between the other branches and MFIs in the preparation made of themselves employable opportunities through subsidized raw materials, offers Business, marketing support etc.
• The organizations in micro-credit initiatives should be involved, taking into account the fact that: credit can not by themselves so very poor women overcome their poverty. In situations of chronic poverty, it is important to save offer services are provided as loans.
• The use of technology is another important aspect of the Indian MFIs and technological solutions such as branchless banking is required. For eg. SEWA and are under Swadhaar to facilitate the use of biometric smart cards to operate for its members savings accounts via ATMs.

"If you uplifting the poor, you are uplifting the nation, "said Gandhi. Today, that vision must be achieved by increasing the intervention Micro Finance Services - by unleashing the entrepreneurial Talent of the poor through MFIs - we are slowly but surely transforming India into a way we can only imagine today.

________________________________________________________________________

References:

Books and reports:

Praful Patel (2005), "Microfinance in South Asia, today and tomorrow, "Report on the Regional Conference, World Bank Group.

Sukhwinder Singh (2005), Microfinance India Conference and a View of an expanding market, Financial Sector Team, Policy Division, The DFID.

YSP Thorat (2005), "India Microfinance In: Sectoral issues and challenges ", Theme Paper on the High Level Policy Conference on Microfinance in India, New Delhi 3 to 5 May 2005

Magazines / Magazine / Newspaper Article:

SA Aiyar. (2009), "How Micro-Finance Institutions Beat nationalized banks," The Business Line, 26 July.

Rasheeda Bhagat (2009), "There Is All Around Profit", The Business Line 'August 21

Borpuzari Pranbihanga (2009), "bar on Micro Finance, Entrepreneur, Pg :48-49, November Edition

Murali D. (2009), "Reaching the poor, microfinance, The Hindu, 24 October.

Naga Shridhar G. & M. Somasekharan (200), nest or trap? " The Business Line November 13

.

Websites :

www.ifmr.ac.in / CMF

www . sulaxmi.com

href = "http://www.microfinanceindia.org/annual-microfinance-india-summit-2009"> www.microfinanceindia.org/annual-microfinance-india-summit-2009

www.microfinance.org

About the Author

Mrs. A.Bharathy

Lecturer, Department of Management &

Ph. D Research scholar @ Dravidian University

Pondicherry University community College

Lawspet , Pondicherry  605008

Gregory Pack Agency-Farmers Insurance - Insurance Agent In Roy, UT