Status of Micro Finance in India 2009-2010 doc
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Status of Micro Finance in India 2009-2010
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Status of Micro Finance in India – 2009-10Status of Micro Finance in India – 2009-10Status of Micro Finance in India – 2009-10
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Status of Micro Finance in India 2009-2010
Status of Micro Finance in India 2009-2010
PrefacePrefacePreface
The Self Help Group (SHG)-Bank Linkage Programme, in the past eighteen years, has become
a well known tool for bankers, developmental agencies and even for corporate houses. SHGs,
in many ways, have gone beyond the means of delivering the nancial services as a channel
and turned out to be focal point for purveying various services to the poor. The programme, over
a period, has become the common vehicle in the development process, converging important
development programmes. With the small beginning as Pilot Programme launched by NABARD
by linking 255 SHGs with banks in 1992, the programme has reached to linking of 69.5 lakh
saving-linked SHGs and 48.5 lakh credit-linked SHGs and thus about 9.7 crore households are
covered under the programme, envisaging synthesis of formal nancial system and informal
sector.
In view of the large outreach and pre-dominant position of the microFinance programme, it is
important to keep a continuous track of the status, progress, trends, qualitative and quantitative
performance comprehensively. To achieve this objective, Reserve Bank of India and NABARD
issued guidelines in the year 2006-07 to Commercial Banks, Regional Rural Banks and
Cooperative Banks to furnish data on progress under microFinance. The data so collected
covers various parameters like savings of SHGs with banks, bank loan disbursed to SHGs, bank
loan outstanding against SHGs, gross non performing assets of bank loans to SHGs, recovery
performance of loans to SHGs. Further, the banks also furnished the data regarding bank loans
provided to Micro Finance Institutions (MFIs). NABARD, has been bringing out the consolidated
document annually.
This booklet presents the consolidated data obtained from the banks along with preliminary
analysis of the various trends and progress under micronance sector under the two models viz.,
SHG – Bank Linkage model and MFI – Bank Linkage model. The data furnished by the banks
have been analysed on a region-wise, state-wise, agency-wise, bank-wise and also for SHGs
exclusively under Swarnajayanti Gram Swarojgar Yojana and exclusive women SHGs data in the
booklet.
The trend in submitting the Management Information System by banks has shown improvement.
This year all 27 Public Sector Commercial Banks, 19 private sector Commercial Banks, 81
Regional Rural Banks and 318 Co-operative Banks have submitted the MIS. We thank all the
banks for furnishing the data and expected that in the coming years all the remaining banks will
co-operate in timely and accurate submission of data to us.
The major support provided by NABARD under Micro Finance Development and Equity Fund
relates to promotion and nurturing of SHGs by Self Help Promoting Institutions and training and
capacity building of the stakeholders in the Sector. NABARD is also experimenting innovative
projects for further developing the microFinance through Joint Liability Groups. The details in this
regard are also included in this booklet.
We hope that all the stakeholders under micronance sector would use the information as
input and feedback relating to the sector for bringing about policy changes and improvement
in operational strategies. More analysis than what is given in the book is expected from all the
micronance players. NABARD would welcome suggestions and comments on this booklet for
making it more informative and useful at all levels in micronance sector.
Status of Micro Finance in India 2009-2010
Status of Micro Finance in India 2009-2010
Highlights – SHG Bank Linkage Programme 2009-10 i-ii
Micro Finance in India iii-xxii
I - A Savings of SHGs with Banks – Agency-wise position as on 31 March 2010 1
I - B Bank loans disbursed to SHGs – Agency-wise loans disbursed during 2009-10 1
I - C Bank loans outstanding against SHGs – Agency-wise position as on 31 March 2010 1
I - D Non Performing Assets of Banks against SHGs – Agency-wise position as on 31 March 2010 2
I - E Agency wise Bank Loans provided to MFIs during 2009-10 and loans outstanding
as on 31 March 2010 2
II - A Savings of SHGs with Banks – Region-wise / State-wise / Agency-wise position as on
31 March 2010 3
II - B Bank Loans disbursed during the year – Region-wise / State-wise / Agency-wise Loans
disbursed during 2009 - 2010 4
II - C Bank Loans Outstanding against SHGs – Region-wise / State-wise / Agency-wise Loans
Oustanding as on 31 March 2010 5
II - D
Non Performing Assets (NPAs) against Bank loans to SHGs – Region-wise / State-wise /
Agency-wise position of NPAs as on 31 March 2010
6
III - A (i) Savings of SHGs with Public Sector Commercial Banks as on 31 March 2010 7
III - A (ii) Savings of SHGs with Private Sector Commercial Banks as on 31 March 2010 20
III - B Savings of SHGs with Regional Rural Banks as on 31 March 2010 23
III - C Savings of SHGs with Co-operative Banks as on 31 March 2010 27
IV - A (i) Bank loans disbursed by Public Sector Commercial Banks to SHGs during 2009-10 36
IV - A (ii) Bank loans disbursed by Private Sector Commercial Banks to SHGs during 2009-10 49
IV - B Bank loans disbursed by Regional Rural Banks to SHGs during 2009-10 51
IV - C Bank loans disbursed by Co-operative Banks to SHGs during 2009-10 55
V - A (i) Bank Loans outstanding against SHGs as on 31 March 2010 – Public Sector
Commercial Banks 63
V - A (ii) Bank Loans outstanding against SHGs as on 31 March 2010 – Private Sector
Commercial Banks 76
V - B Bank Loans outstanding against SHGs as on 31 March 2010 – Regional Rural Banks 79
VI - A (i) NPAs against Bank loans to SHGs and Recovery Performance of Public Sector
Commercial Banks as on 31 March 2010 90
VI - A (ii) NPAs against Bank loans to SHGs and Recovery Performance of Private Sector
Commercial Banks as on 31 March 2010 102
VI - B NPAs against Bank loans to SHGs and Recovery Performance of Regional Rural Banks
as on 31 March 2010 104
VI - C NPAs against Bank loans to SHGs and Recovery Performance of Co-operative Banks
as on 31 March 2010 108
VII Bank Loans provided to MFIs and their Non Performing Assets (NPAs) and
Recovery Performance – 2009-10 117
VIII NABARD Support for Training and Capacity Buliding under Micronance Sector – 2009-10 118
IX - A Support to NGOs functioning as SHPIs 120
IX - B Support to RRBs functioning as SHPI 169
IX - C Support to Co-operative Banks Functioning as SHPI 175
IX - D Support to IRVs for Promoting SHGs 179
IX - E Support to Farmers Clubs Functioning as SHPI 182
X - A Agencies having outstanding Revolving Fund Assistance as on 31 March 2010 183
X - B Agencies having outstanding Capital Support as on 31 March 2010 184
X - C MFIs assisted with grant support for rating during the year 2009-2010 185
XI - A
Special focus on the Resource Poor Regions – Savings Linked SHGs in the 13 Priority States
186
XI - B
Special focus on the Resource Poor Regions – Loans Disbursed to SHGs in the 13 Priority States
187
XI - C
Special focus on the Resource Poor Regions – Loans Outstanding against SHGs in the 13 Priority States
188
ContentsContentsContents
ContentsContentsContents
Status of Micro Finance in India 2009-2010
Status of Micro Finance in India 2009-2010
Þ Total number of SHGs savings linked with banks : 69.53 lakh
Þ Out of total [of which] exclusive Women SHGs : 53.10 lakh
Þ Out of total [of which] -SGSY SHGs : 16.94 lakh
Þ Total number of SHGs credit linked during 2009-10 : 15.87 lakh
Þ Out of total [of which] exclusive Women SHGs credit linked : 12.94 lakh
Þ Out of total [of which]-SGSY SHGs credit linked : 2.67 lakh
Þ Total number of SHGs having loans outstanding as on
31 March 2010 : 48.51 lakh
Þ Of which exclusive Women SHGs : 38.98 lakh
Þ Of which-SGSY SHGs : 12.45 lakh
Þ Estimated number of of families covered upto 31 March 2010 : 97 million
Þ Total savings amount of SHGs with banks as on 31 March 2010 : ` 6198.71 crore
Þ Out of total savings of exclusive Women SHGs : ` 4498.66 crore
Þ Out of total savings of SGSY SHGs : ` 1292.62 crore
Þ Total amount of loans disbursed to SHGs during 2009-10 : ` 14453.30 crore
Þ Out of total loans disbursed to Women SHGs : ` 12429.37 crore
Þ Out of total loans disbursed to SGSY SHGs : ` 2198.00 crore
Þ Total amount of loans outstanding against SHGs
as on 31 March 2010 : ` 28038.28 crore
Þ Out of total loans o/s against Women SHGs : ` 23030.36 crore
Þ Out of total loans o/s against SGSY SHGs : ` 6251.08 crore
Þ Average loan amount outstanding per SHG as on March 2010 : ` 57795
Þ Average loan amount outstanding per member
as on 31 March 2010 : ` 4128
SHG – Bank Linkage Programme 2009-10SHG – Bank Linkage Programme 2009-10SHG – Bank Linkage Programme 2009-10
SHG – Bank Linkage Programme 2009-10SHG – Bank Linkage Programme 2009-10SHG – Bank Linkage Programme 2009-10
SHG – Bank Linkage Programme 2009-10SHG – Bank Linkage Programme 2009-10SHG – Bank Linkage Programme 2009-10
SHG – Bank Linkage Programme 2009-10SHG – Bank Linkage Programme 2009-10SHG – Bank Linkage Programme 2009-10
Status of Micro Finance in India 2009-2010
Þ Commercial banks [public] : 27
Þ Foreign banks + Private banks : 19
Þ Regional Rural Banks : 81
Þ Cooperative Banks : 318
Þ Small Industries Development Bank of India : 1
Þ Number of programmes conducted during 2009-10 : 6804
Þ Number of participants covered during 2009-10 : 2.54 lakh
Þ Cumulative number of participants Trained upto March 2010 : 24.55 lakh
Þ Grant support during the year 2009-10 : ` 9.93 crore
Þ Cumulative fund support upto March 2010 : ` 45.02 crore
Þ Renance to banks during 2009-10 : ` 3173.56 crore
Þ Cumulative renance released upto 31.3.2010 : ` 12861.65 crore
Þ RFA released to MFIs during the year : ` 22.55 crore
Þ Cumulative RFA released to MFIs upto 31 March 2010 : ` 55.49 crore
Capital Support [CS] to MFIs
Þ CS released to MFIs during the year : ` 7.87 crore
Þ Cumulative CS released to MFIs upto 31 March 2010 : ` 24.86 crore
Þ Grant assistance sanctioned during 2009-10 : ` 28.78 crore
Þ Cumulative sanctions upto 31 March 2010 : ` 107.66 crore
Þ Grant assistance for Rating of MFIs during 2009-10 : ` 15.83 lakh
Status of Micro Finance in India 2009-2010
Micro Finance in IndiaMicro Finance in IndiaMicro Finance in India
Micro Finance in IndiaMicro Finance in IndiaMicro Finance in India
Micronance sector has traversed a long
journey from micro savings to micro credit and
then to micro enterprises and now entered the
eld of micro insurance, micro remittance and
micro pension. This gradual and evolutionary
growth process has given a great opportunity
to the rural poor in India to attain reasonable
economic, social and cultural empowerment,
leading to better living standard and quality
of life for participating households. Financial
institutions in the country continued to play a
leading role in the micronance programme
for nearly two decades now. They have joined
hands proactively with informal delivery channels to give micronance sector the necessary
momentum. During the current year too, micronance has registered an impressive
expansion at the grass root level. This booklet aims to provide a snapshot of the progress in
the micronance sector.
Since 2006-07, NABARD has been compiling and analysing the data on progress made in
micronance sector, based on the returns furnished by Commercial Banks (CBs), Regional
Rural Banks (RRBs) and Cooperative Banks operating in the country. The banks operating,
presently, in the formal nancial system comprises Public Sector CBs (27), Private Sector
CBs (22), RRBs (82), State Cooperative Banks (31) and District Central Cooperative Banks
(370). Most of the banks participating in the process of micronance have reported the
progress made under the programme.
The data presented in this booklet covers information relating to savings of Self Help
Groups (SHGs) with banks as on 31 March 2010, loans disbursed by banks to SHGs during
the year 2009-10, loans outstanding of the banking system against the SHGs and the
details of Non-Performing Assets (NPAs) and recovery percentage in respect of bank loans
provided to SHGs as on 31 March 2010. The data have been compiled region-wise, State-
wise and agency-wise. The booklet also provides details relating to SHGs coming under
Swarnjayanti Gram Swarojgar Yojna (SGSY) and exclusive women groups. In addition,
the information relating to bulk lending provided by Banks and Financial Institutions to
Micro Finance Institutions (MFIs) for on lending to groups and individuals have also been
provided. Based on these data and information, this booklet attempts an assessment of
progress on varied dimensions of the micronance sector.
NABARD has been instrumental in facilitating
various activities under micronance sector,
involving all possible partners at the ground
level in the eld. NABARD has been
encouraging voluntary agencies, bankers,
socially spirited individuals, other formal
and informal entities and also government
functionaries to promote and nurture SHGs.
The focus in this direction has been on training
and capacity building of partners, promotional
grant assistance to Self Help Promoting
Status of Micro Finance in India 2009-2010
Institutions (SHPIs), Revolving Fund Assistance (RFA) to MFIs, equity/ capital support to
MFIs to supplement their nancial resources and provision of 100 per cent renance against
bank loans provided by various banks for micronance activities. Financial support and
promotional efforts of NABARD towards development of the micronance sector have also
been outlined in this booklet.
In this section, the data for the year 2009-10 alongwith a few preceding years have
been presented and reviewed under two models of micronance involving credit
linkage with banks :
(i) SHG - Bank Linkage Model : This
model involves the SHGs nanced
directly by the banks viz., CBs (Public
Sector and Private Sector), RRBs and
Cooperative Banks.
(ii) MFI - Bank Linkage Model : This
model covers nancing of Micro
Finance Institutions (MFIs) by banking
agencies for on-lending to SHGs and
other small borrowers.
The overall progress under these two models is depicted in Table -1:
Milch animals purchased by JLGs / Bagavali PACS.
`
Savings Total 5009794 3785.39 6121147 5545.62 22.2 46.5 6953250 6198.71 13.6 11.8
of SHGs SHGs
with Bank Out of 1203070 809.51 1505581 1563.38 25.1 93.1 1693910 1292.62 12.5 (17.3)
as on which
31 March SGSY
Bank Loans Total 1227770 8849.26 1609586 12253.51 31.1 38.5 1586822 14453.30 (1.4) 17.9
disbursed SHGs
to SHGs Out of 246649 1857.74 264653 2015.22 7.3 8.5 267403 2198.00 1.0 9.1
during which
the year SGSY
Bank Loans Total 3625941 16999.91 4224338 22679.84 16.5 33.4 4851356 28038.28 14.8 23.6
outstanding SHGs
with SHGs Out of 916978 4816.87 976887 5861.72 6.5 21.7 1245394 6251.08 27.5 6.6
as on which
31 March SGSY
`
Bank Loans disbursed 518 1970.15 581 3732.33 12.2% 89.4% 691 8062.74 18.9% 116.0%
to MFIs during the year
Bank Loans outstanding 1109 2748.84 1915 5009.09 72.7% 82.2% 1513 10147.54 (21%) 102.6%
with MFIs as on
31 March
Actual number of MFIs provided with bank loans would be less as several MFIs could have availed loans from more than one bank.
Status of Micro Finance in India 2009-2010
`
Loans disbursed to MFIs during 2009-10 88 2665.75
Loans outstanding against MFIs as on 31 March 2010 146 3808.20
In addition, to the SHG-Bank linkage model and MFI-Bank linkage model, Small Industries
Development Bank of India (SIDBI) has also supported MFIs. The details for the year 2009-
10 are presented below:
`
Saving linked SHGs 31.03.2009 6121147 5545.62 4863921 4434.03 79.5 80.0
31.03.2010 6953250 6198.71 5310436 4498.66 76.4 72.6
Loans disbursed 2008-09 1609586 12253.51 1374579 10527.38 85.4 85.9
2009-10 1586822 14453.30 1294476 12429.37 81.6 86.0
Loans Outstanding 31.03.2009 4224338 22679.84 3277355 18583.54 77.6 81.9
31.03.2010 4851356 28038.28 3897797 23030.36 80.3 82.1
The details of total number of women SHGs saving linked, credit linked and loans
outstanding for the last two years are given in table 2 :
It may be seen that of the total number of saving linked and credit linked SHGs, exclusive
women SHGs with banks were 76.4 per cent and 81.6 per cent, respectively. Further, the
percentage of loans outstanding of exclusive women SHGs to loans outstanding of total
SHGs which was 81.9 per cent as on 31 March 2009 has increased to 82.1 per cent as on
31 March 2010.
This section provides disaggregated picture of the progress achieved under SHG Bank
linkage programme.
Status of Micro Finance in India 2009-2010
As on 31 March 2010, a total of 69.53 lakh SHGs were having saving bank accounts
with the banking sector with outstanding savings of ` 6198.71 crore as against 61.21
lakh SHGs with savings of ` 5545.62 crore as on 31 March 2009, thereby showing a
growth rate of 13.6 per cent and 11.8 per cent, respectively. Thus, more than 97 million
poor households were associated with banking agencies under SHG-Bank Linkage
Programme. As on 31 March 2010, the CBs lead with savings accounts of 40.53 lakh
SHGs (58.3%) with savings amount of ` 3673.89 crore (59.3 %) followed by RRBs
having savings bank accounts of 18.21 lakh SHGs (26.2% ) with savings amount of
` 1299.37 crore (21.0%) and Cooperative Banks having savings bank accounts of
10.79 lakh SHGs (15.5 %) with savings amount of ` 1225.44 crore (19.8%).
The share under SGSY was 16.94 lakh SHGs with savings of ` 1,292.62 crore forming
24.4 per cent of the total SHGs having savings accounts with the banks and 20.8 per
cent of their total savings amount.
The agency-wise savings of SHGs with banks as on 31 March 2009 and 31 March
2010 are given in Table - 3:
`
Commercial Banks 31.03.09 3549509 58.0 2772.99 50.0 7812 931422 681.60
(Public & Private 31.03.10 4052915 58.3 3673.89 59.3 9065 1088160 831.48
Sector)
Regional Rural Banks 31.03.09 1628588 26.6 1989.75 35.9 12218 433912 774.55
31.03.10 1820870 26.2 1299.37 21.0 7136 462370 268.50
Cooperative Banks 31.03.09 943050 15.4 782.88 14.1 8302 140247 107.24
31.03.10 1079465 15.5 1225.44 19.8 11352 143380 192.64
Status of Micro Finance in India 2009-2010
During the year under review, the average savings per SHG with all banks had
marginally decreased from ` 9,060 as on 31 March 2009 to ` 8,915 as on 31 March
2010. The decrease may be due to proper utilization of saving amount by SHGs for
internal lending. It varied from ` 11,352 per SHG with co-operative banks to ` 7,136
per SHG with RRBs.
As on 31 March 2010, the share of women SHGs in the total SHGs with saving bank
accounts was 53.10 lakh SHGs forming 76.4 per cent as compared to the previous
year’s share of 79.5 per cent. The actual share of women SHGs would be more as all
RRBs from Uttar Pradesh, Gujarat and Jammu & Kashmir and all Co-operative Banks
from Uttar Pradesh, Gujarat, Jammu & Kashmir, Goa, Assam, Nagaland, Tripura,
Mizoram, and Manipur have not reported data for women SHGs. In addition, some of
RRBs viz., Marathwada Gramin Bank from Maharashtra, Assam Gramin Vikas Bank,
Bihar Kshetriya Gramin Bank, Madhya Bihar Gramin Bank, Nainital Almora Kshetriya
Gramin Bank and some of the Central Cooperative Banks have also not reported
women SHGs data.
The State-wise and bank-wise position of savings of SHGs with banks as on 31 March
2010 is indicated at Statement III-A (i) (Public sector CBs), III-A (ii) (Private sector
CBs), III-B (RRBs) and III-C (Cooperative Banks).
During 2009-10, banks have nanced 15.87 lakh SHGs, including repeat loan to the
existing SHGs, with bank loans of ` 14,453.30 crore as against 16.10 SHGs with bank
loans of ` 12,253.51 crore during 2008-09, registering a decline of 1.4 per cent of
SHGs but a growth of 17.9 per cent in bank loans disbursed. Out of the total loans
disbursed during 2009-10, SHGs nanced under SGSY accounted for 2.67 lakh
(16.9%) with bank loan of ` 2198.00 crore (15.2%) as against 2.65 lakh SHGs (16.4%)
with bank loan of ` 2015.22 crore (16.4%) during 2008-09.
The agency-wise details of loans disbursed by banks to SHGs during the years 2008-
09 and 2009-10 are given in Table 4.
`
Commercial Banks 2008-09 1004587 62.4 8060.53 65.8 80237 133117 1102.38
(Public & Private 2009-10 977521 61.6 9780.18 67.7 100050 157560 1215.50
Sector)
Regional Rural Banks 2008-09 405569 25.2 3193.49 26.1 78741 81662 655.27
2009-10 376797 23.7 3333.20 23.1 88461 67531 682.41
Cooperative Banks 2008-09 199430 12.4 999.49 8.2 50117 49874 257.57
2009-10 232504 14.7 1339.92 9.3 57629 42312 300.09
It may be observed from Table-4 that as always, CBs led in disbursement of loans to
SHGs during 2009-10 with 61.6 per cent share followed by RRBs with a share of 23.7
per cent and Cooperative Banks with a share of 14.7 per cent.
Status of Micro Finance in India 2009-2010
During 2009-10, average bank loan disbursed per SHG was ` 91,083 as against
` 76,128 during 2008-09. The average loan per SHG ranged from of ` 1,00,050 per
SHG by CBs to ` 57,629 per SHG by Cooperative Banks.
The State-wise and bank-wise position of disbursement of bank loans to SHGs during
the year 2009-10 is indicated at Statement IV-A (i) (Public sector CBs), IV-A (ii) (Private
sector CBs), Statement IV-B (RRBs) and Statement IV-C (Cooperative Banks).
As on 31 March 2010, total number of 48.51 lakh SHGs were having outstanding bank
loans of ` 28,038.28 crore as against 42.24 lakh SHGs with bank loans of ` 22,679.85
crore as on 31 March 2009, representing a growth of 14.8 per cent in number of SHGs
and 23.6 per cent in bank loans outstanding against SHGs. The share of SHGs under
SGSY was 12.45 lakh SHGs (25.7%) with outstanding bank loans of ` 6,251.07 crore
(22.3%) as against 9.77 lakh SHGs (23.1%) with outstanding bank loans of ` 5,861.72
crore (25.8%) as on 31 March 2009.
The agency-wise position of outstanding bank loans to SHGs for the years 2008-09
and 2009-10 are given in Table 5.
`
CBs (Public & 31.03.2009 2831374 67.1 16149.43 71.2 57,037 645145 3961.53
Private Sector) 31.03.2010 3237263 66.7 20164.71 71.9 62,289 798304 4072.03
RRBs 31.03.2009 977834 23.1 5224.42 23.0 53,428 258890 1508.10
31.03.2010 1103980 22.8 6144.58 21.9 55,658 368795 1725.94
Cooperative Banks 31.03.2009 415130 9.8 1306.00 5.8 31,460 72852 392.09
31.03.2010 510113 10.5 1728.99 6.2 33,894 78295 453.11
Status of Micro Finance in India 2009-2010
`
CBs (Public Sector ) 19724.42 513.53 2.60
CBs (Private Sector) 440.29 23.93 5.44
RRBs 6144.58 218.53 3.56
Cooperative Banks 1728.99 67.04 3.88
It may be observed from Table 5, that following the highest disbursements, CBs also
had the maximum share of 66.7 per cent in outstanding bank loans to SHGs followed
by RRBs with a share of 22.8 per cent and Cooperative Banks with a share of 10.5 per
cent.
The average bank loan outstanding per SHG had increased from ` 53,689 as on 31
March 2009 to ` 57,795 as on 31 March 2010. It varied between ` 62,289 per SHG in
case of CBs and ` 33,894 per SHG in case of Co-operative Banks as on 31 March 2010.
The State-wise and bank-wise position of outstanding bank loans to SHGs as on 31
March 2010 is given in Statement V-A (i) (Public sector Commercial Banks), V-A (ii)
(Private sector Commercial Banks), V-B (RRBs) and V-C (Cooperative Banks).
As on 31 March 2010, total 221 banks had reported data on Non Performing Assets
(NPAs). Based on these data, NPAs to total bank loans outstanding against SHGs as
on 31 March 2010 stood at 2.94 per cent, amounted to ` 823.04 crore, which showed
an increase from 2.90 per cent and ` 625.87 crore during 2008-09.
In case of SHGs under SGSY, NPAs to total bank loans outstanding against SHGs
were ve per cent, amounting to ` 319.47 crore, as on 31 March 2010. The agency-
wise position of NPAs to total bank loans outstanding against SHGs as on 31 March
2010 is given in Table 6:
The State-wise and bank-wise position of NPAs of bank loans to SHGs as on 31
March 2010 are provided in Statement VI-A (i) (Public Sector Commercial Banks), VI-A
(ii) (Private Sector Commercial Banks), VI-B (RRBs) and VI-C (Cooperative Banks).
The recovery performance of banks varies from region to region and also as between
SHG-Bank linkage programme and SHGs nanced under SGSY programme. On the
basis of data reported by banks, out of 302 banks which have reported the recovery
data, 203 banks (67.2%) had more than 80% recovery of SHG loans as on 31 March
2010 which remained about the same as on 31 March 2009. Agency-wise distribution
of banks according to recovery per centage of SHGs, is given in Table – 7.
Status of Micro Finance in India 2009-2010
As regards recovery percentage of SHG loans by banks under SGSY, out of total 165
banks reported the recovery data of SHGs under SGSY, 86 banks (52.2%) had more
than 80% recovery of as on 31 March 2010 as against 58.9% as on 31 March 2009.
Agency-wise percentage distribution of banks according to recovery performance is
given in Table – 8.
Commercial Banks
(Public Sector) 24 4 10 10 0
Commercial Banks
(Private Sector) 8 5 1 2 0
Regional Rural Banks 56 4 19 23 10
Cooperative Banks 77 26 17 20 14
The State-wise and bank-wise position of recovery percentage to demand of SHG
loans as on 31 March 2010 is indicated at Statement VI-A(i) (Public sector CBs), VI-
A(ii) (Private sector CBs), VI-B (RRBs) and VI-C (Cooperative Banks).
Micro Finance Institutions (MFIs) are playing an important role of nancial intermediaries in
micronance sector. The MFIs operate under various legal forms, viz.,
NGO MFIs – Registered under Societies Registration Act, 1860 and / or Indian Trust
Act, 1880
Cooperative MFIs – Registered under State Cooperative Societies Act or Mutually
Aided Cooperative Societies Act (MACS) or Multi- State Coop. Societies Act, 2002
NBFC MFIs incorporated under Section 25 of Companies Act, 1956 (not for prot)
NBFC MFIs incorporated under Companies Act, 1956 & registered with RBI
Following the RBI guidelines issued vide its circular dated 18 February 2000, to all
scheduled commercial banks including RRBs, MFIs have been availing bulk loans from
banks for on-lending to groups and other small borrowers. On the basis of returns received
from banks for the year 2009-10, SIDBI, 21 Public Sector Commercial Banks, 14 private
Commercial Banks
(Public Sector) 24 8 10 6 0
Commercial Banks
(Private Sector) 9 6 3 0 0
Regional Rural Banks 70 17 28 21 4
Cooperative Banks 199 72 59 43 25
Status of Micro Finance in India 2009-2010
sector Commercial Banks, 04 foreign Commercial Banks, 7 RRBs and one Co-operative
Bank had reportedly nanced MFIs for on-lending to groups and other small borrowers to
promote micronance activities.
Based on the MIS, banks have nanced to 691 MFIs with bank loans of ` 8062.74 crore as
against 581 MFIs with bank loans of ` 3,732.33 crore during 2008-09, representing growth
rate of 116.5 per cent in bank loans disbursed. As on 31 March 2010, the outstanding bank
loans to 1513 MFIs was ` 10147.54 crore as against ` 5009.09 crore to 1915 MFIs as on
31 March 2009, showing doubling of bank loan over the previous year.
Further, during the year 2009-10, SIDBI had nanced to 88 MFIs with nancial assistance
of ` 2665.75 crore and the loan outstanding against 146 MFIs as on 31 March 2010 was
` 3808.20 crore. As such the total exposure of banks and nancial institutions to MFIs as
on 31 March 2010 was to the tune of ` 13955.74 crore.
The progress under MFI-bank Linkage programme, for the year 2008-09 and 2009-10, is
given in Table – 9.
`
CBs (Public, Private and Foreign) 2008-09 522 3,718.93 1,762 4,977.89 70-100
2009-10 645 8,038.61 1407 10,095.32 80-100
RRBs 2008-09 59 13.40 153 31.20 87-100
2009-10 46 24.14 103 52.22 100
Coop. Banks 2008-09 0 0.00 0 0.00 NA
2009-10 0 0.00 3 0.007 90
SIDBI 2009-10 88 2665.75 146 3808.20 NA
Actual no. of MFIs provided with bank loans would be less as several MFIs had availed loans from more than one bank.
NA – Not Applicable/Not available.
Bank-wise details of MFIs nanced by banks during the year 2009-10 are furnished in
Statement VII.
NABARD provides renance support to banks to the extent of 100 per cent of the bank
loans disbursed to SHGs. The total renance disbursed to banks against banks’ loans
to SHGs during 2009-10 was ` 3173.56 crore, registered a growth of 21.1 per cent
from ` 2620.03 crore in 2008-09. Further, the cumulative renance disbursed under
SHG bank linkage programme by NABARD to Banks upto 31 March 2010 stood at
` 12861.65 crore.
Status of Micro Finance in India 2009-2010
To strengthen the efforts of NABARD towards promotional support for micro
nance, the Government of India in the Union Budget for 2010-11 had further
increased the corpus of Micro Finance Development and Equity Fund (MFDEF) to
` 400 crore. Recognising the need for upscaling the micro-Finance interventions
in the country, the Hon’ble Union Finance Minister, while presenting the budget
for the year 2000-01, had created Micro Finance Development Fund (mFDF) with
an initial contribution of ` 100 crore, to be funded by Reserve Bank of India,
NABARD and commercial Banks in the ratio of 40:40:20. In the Union Budget
for 2005-06, the Government of India had decided to re-designate the mFDF
into mFDEF and raised its corpus from ` 100 crore to ` 200 crore. The mFDEF
is managed and administered by NABARD under the guidance of an mFDEF
Advisory Board. The objective of mFDEF is to facilitate and support the orderly
growth of the micronance sector through diverse modalities for enlarging the ow
of nancial services to the poor, particularly for women and vulnerable sections of
society consistent with sustainability.
The Fund is utilised to support interventions to eligible institutions and
stakeholders. The major components of the assistance include promotional
grant assistance to Self-Help Promoting Agencies, training and capacity building
for micronance clients and stakeholders of SHG - Bank Linkage Programme,
funding support to MFIs, Management Information System (MIS) for micronance,
research, studies and publications.
NABARD continued to
organize / sponsor training
programmes and exposure
visits for the benet of ofcials
of banks, NGOs, SHGs and
government agencies to
enhance their effectiveness
in the eld of micronance.
Training supplements and
materials were supplied to
banks and other agencies.
Best practices and innovations
of partner agencies were
widely circulated among
government agencies,
banks and NGOs. During the year 2009-10, fund support of ` 9.93 crore was
provided for capacity building, exposure visits and awareness-building as against
` 6.10 crore during 2008-09. The cumulative fund support for the purpose
as on 31 March 2010 stood at ` 45.02 crore. During 2009-10, 6,804 training/
capacity building programmes were conducted covering 2,53,868 participants. The
progress under training and capacity building during the year 2009-10 is given in
Table -10.
Status of Micro Finance in India 2009-2010
1 Awareness creation and capacity building programmes organised for
SHG members in association with identied resource NGOs, covering
participants to inculcate skills for managing thrift and credit 1991 83131
2 Awareness-cum-refresher programmes conducted for NGOs, including CEOs 1130 35648
3 Training programmes conducted for bankers covering ofcials of Commercial banks,
RRBs and Co-operative Banks 462 14945
4 Exposure visits for bank ofcials / NGOs to agencies pioneering in Micronance
(MF) initiatives 14 387
5 Field visits of Block Level Bankers' Committee (BLBC) members to nearby SHGs 227 5880
6 Programmes for the elected members of Panchayati Raj Institutions (PRIs) to create
awareness among them about the MF initiatives 80 2799
7 Training & exposure programmes for government ofcials 79 3385
8 Other training programmes for micronance sector 1181 65029
9 Micro Enterprises Development Programme (MEDP) 1530 38313
10 Micro Enterprise Promotional Agency 36 1000
11 Meetings and Seminars (Bankers, NGO ofcials, etc.) 74 3351
The Region/State-wise position of support provided by NABARD for training and capacity
building during the year 2009-10 is given in Statement VIII.
Based on the studies conducted by
NABARD, it was found that nancing
of Joint Liability Groups (JLGs) is a
good business proposition. It needs
simplied documentation, group
dynamics, timely repayment culture
and prospects of credit enhancement
to quality clients. Keeping in view
the need and ndings of the studies,
NABARD has issued comprehensive
guidelines on JLGs to Banks focusing
on small and marginal farmers, oral
lessees, tenant farmers engaged in farm sector and other clients under non-
farm activities. NABARD supports banks for nurturing and nancing of JLGs for
the initial three years. Banks may use the services of JLG-promoting agencies.
In addition, NABARD would also extend support for training, exposure visits,
experience-sharing, etc., for banks’ staff. The details of the scheme are given in
Exhibit.
The Micro Enterprise Development Programme (MEDP) was launched by
NABARD in March 2006 with the basic objective to enhance the capacities of the
members of matured SHGs to take up micro enterprises through appropriate skill
upgradation / development in the existing or new livelihood activities both in farm
and non-farm sectors by way of enriching knowledge of participants on enterprise
management, business dynamics and rural markets. It is tailor-made and focused
on skill building training programme. The duration of training programme ranged
JLG of Bagavali PACS with the leafy vegetable.
Status of Micro Finance in India 2009-2010
between 3 and 13 days, depending
upon the objective and nature of
training. The training budget has
been revised to ` 39,000/- per
programme for imparting training to
30 participants upto 13 days.
In 2009-10, a total of 1530 MEDPs,
both under Farm and Non-farm
activities, were conducted across the
country covering 38313 members
of the matured SHGs. Cumulatively,
total 2837 MEDPs have been
conducted so far covering 93777
participants. The dominant activities in agriculture and allied sector covered
under MEDPs were animal husbandry, bee-keeping, mushroom cultivation, vermi-
compost/ organic manure, horticulture, oriculture, etc. whereas predominant
non-farm activities taken up under MEDPs were readymade garments, Agarbatti-
making, embroidery, bamboo-craft, beauty parlours, etc.
NABARD continued its efforts in the formation and nurturing of quality SHGs by
means of promotional grant support to NGOs, RRBs, DCCBs, Farmers' Clubs and
Individual Rural Volunteers (IRVs) and by facilitating capacity building of various
partners, which has brought impressive results in the promotion and credit linkage
of SHGs. Further, the number of partner institutions/individuals functioning as
Self-Help Promoting Institutions (SHPIs) over the years has increased to 2911
which has resulted in the expansion of the programme throughout the country.
During the year 2009-10, the nancial support provided by NABARD to its
partner institutions and their progress in SHGs promotion / linkage are indicated in
Table - 11.
`
NGOs 306 2620.10 53393 2624 9025.81 345173 3469.69 244367 157831
RRBs 4 40.14 3395 117 429.44 47975 189.23 54271 36155
Co-operatives 7 63.23 5230 102 626.36 59105 252.95 44618 29075
IRVs (2023) 2 154.70 9250 68 684.46 40483 63.91 9991 5636
Farmers’ Clubs – – – – – – 61.96 14858 7986
The SHPI-wise details of the promotional grant provided by NABARD during the
year 2009-10 are given in Statement No. IX-A (NGOs- SHPI), IX-B (RRBs- SHPI),
IX-C (Coop. Banks- SHPI), IX-D (IRVs- SHPI) and IX-E (Farmers Clubs-SHPI).
The Pilot Project for SHG-Post Ofce Linkage programme was initially launched
in ve select districts of Tamil Nadu, viz., Sivaganga, Pudukottai, Tiruvannamalai,
Thanjavur and Tiruvarur. The initial results have been encouraging. Thus,
Status of Micro Finance in India 2009-2010
NABARD has sanctioned an additional Revolving Fund Assistance (RFA) of ` 200
lakh to India Post for on-lending to the SHGs, taking the total RFA sanctioned to
` 500 lakh.
As on 31 March 2010, 2,828 SHGs have opened zero interest savings accounts
with select Post Ofces in Tamil Nadu and 1195 SHGs have been credit linked
with loans amounting to ` 321.25 lakh.
NABARD has sanctioned RFA of ` 5 lakh to Post Ofces in Meghalaya for on-
lending to 50 SHGs in East Khasi Hills.
NABARD introduced a scheme for supporting small-scale activity based groups
(ABGs) in 2008-09, wherein capacity building, production and investment credit
and market-related support would be extended. The scheme focuses on forming
and nurturing the groups engaged
in similar economic activities, such
as farmers, handloom weavers,
craftsmen, shermen, etc., to improve
efciency of their production and
realise better terms from the market
through economies of aggregation
and scale. The scheme drew upon
NABARD’s existing modes of
support and has both grant and loan
components. While grant support
would cover expenditure on SHGs
formation and training, extension services, establishing market linkages, etc.,
bank loan/s would cover investment activities and working capital needs of the
SHGs. Banks would be eligible to draw renance for the loans provided to Activity-
Based Groups on the same terms as applicable for SHG’s nancing. In select
cases, NABARD may also provide loans directly to registered SHGs or through
the agencies promoting SHGs to establish few initial projects where none exists.
Recognising the emerging role of the SHGs’ Federations in nurturing of
SHGs, enhancing the bargaining powers of group members and livelihood
promotion, NABARD introduced during 2007-08, a exible scheme to support
such Federations, irrespective of their model. The broad norms prescribed for
supporting SHG Federations stipulate that the federations should be need-based,
member-owned/driven, democratically managed with members at liberty to join,
become self-managed over three years, etc. NABARD extends grant support
to the Federation for training, capacity building, and exposure visits of SHG
members, etc., as also under all of NABARD’s existing promotional schemes. So
far grant assistance of ` 22.02 lakh has been sanctioned to SHG Federations.
NABARD has been associated with Rajiv Gandhi Charitable Trust (RGCT) for
promotion, credit linkage and formation of SHG Federations in select districts
of Uttar Pradesh. The project envisages promotion and credit linkage of 22,000
SHGs, 1,100 cluster-level associations and 44 block-level associations in
collaboration with participating banks and implementing NGOs. The project would
Status of Micro Finance in India 2009-2010
cover 15 and 29 blocks under Phase I and II respectively in 12 districts of Uttar
Pradesh viz. Sultanpur, Rae Bareli, Barabanki, Pratapgarh, Lucknow, Unnao,
Fatehpur, Jhansi, Lalitpur, Bahraich, Shravasti and Banda. NABARD and RGCT
have designed the project with technical assistance from Society for Elimination of
Rural Poverty (SERP), Government of Andhra Pradesh. As at the end of 31 March
2010, 21,868 SHGs have been promoted, of which 12,749 SHGs have been credit
linked. In addition, 676 Village Level and 15 Block Level SHG Federations were
formed under Phase I and Phase II.
(a) Arunachal Pradesh: During 2008-09, an amount of ` 39.15 lakh was
sanctioned by NABARD for implementing the project ‘Micro Finance Vision
2011’ by the Govt. of Arunachal Pradesh. Further, an amount of ` 33.66 lakh
was sanctioned to the Essom Foundation Trust for setting up a Resource
Centre at Itanagar for providing policy, operational inputs, capacity building
support and marketing linkages among the groups. NABARD has released `
5.452 lakh to the trust upto 31 March 2010.
(b) Tripura: NABARD continued to provide technical support to the State support
project on SHGs being implemented by the Government of Tripura for credit
linkage of 11,500 existing SHGs, forming and credit linking 35,000 new SHGs
and promoting livelihood activities among the 3 lakh members upto 2012.
NABARD has taken three major initiatives to support Micro Finance Institutions (MFIs)
to strengthen them as detailed in the following paragraphs:
As mentioned earlier, the Micro Finance Development Fund (mFDF) was set
up with NABARD by Government of India in 2000-01 with the initial corpus
of ` 100 crore to be contributed by Reserve Bank of India (40%), NABARD
(40%) and Commercial Banks (20%). The mFDF was redesignated to
Micro Finance Development and Equity Fund (mFDEF) in 2005-06 and the
corpus was increased to ` 200 crore and same has been further increased
to ` 400 crore during 2010-11. Accordingly, NABARD formulated a scheme
called “Capital/Equity Support to MFIs” in 2007-08 for providing Capital/equity
support to various types of MFIs to enable them to leverage commercial and
other funds from banks. This would help MFIs in providing nancial services
at an affordable cost to the poor.
During 2009-10, NABARD introduced a new scheme for "Capital Support
to start-up MFIs" having potential to scale-up their activities but lacking
in capital, infrastructural facilities and managerial skills. Micro-Finance
Organisations (MFOs) and MFI-NBFCs, identied as ‘Start ups’ on the basis
of area of operation, client outreach, lending model, borrowing history, etc.,
are eligible for support under the scheme. Financial support will be in the
form of ’subordinated debt’ which shall be sub-ordinate to the claims of
all other creditors. The quantum of support will be commensurate with the
business plan of the MFO / MFI-NBFC but not exceeding ` 50 lakh in any
case. The rate of interest has been xed at 3.5 per cent to be repaid over a
period of 7 years including moratorium of 2 years.
Status of Micro Finance in India 2009-2010
During 2009-10, under Capital Support Scheme, 10 proposals amounting to
` 6.87 crore were sanctioned to 10 MFIs and disbursed ` 7.87 crore. The
outstanding under Capital support as on 31 March 2010 was ` 24.17 crore
against 31 MFIs. The agency-wise outstanding is given in Statement No. X(B).
NABARD provides loan funds in the form of Revolving Fund Assistance
(RFA), on a selective basis, to MFIs. The RFA provided to these agencies is
necessarily to be used for on-lending to SHGs or individuals and the amount
is to be repaid along with the service charge between 3.5 per cent and 9.5
per cent within a stipulated period of 5 to 7 years with one to two years of
moratorium period. This enables them to build a ‘credit history’, which would
help them to access credit facilities through the regular banking channels.
During 2009-10, RFA of ` 23 crore was sanctioned to 13 MFIs taking
cumulative RFA sanction to ` 65.98 crore to 51 agencies. The disbursements
made during 2009-10 were at ` 22.55 crore and the cumulative disbursement
reached to ` 55.49 crore. As on 31 March 2010, the total RFA outstanding
was ` 33.27 crore against 22 MFIs. The details of agencies-wise outstanding
RFA are given in Statement - X(A).
Besides Capital Support and RFA from MFDEF, renance assistance of ` 30
crore was also released during 2009-10 of which outstanding as on 31 March
2010 was Rs.28.33 crore.
In order to identify, classify and rate Micro Finance Institutions (MFIs) and
empower them to function as intermediaries between the lending banks and their
clients, NABARD had introduced a scheme for providing nancial assistance by
way of grant to CBs, RRBs and Co-operative Banks to avail of the services of
accredited rating agencies for rating of MFIs. Banks can avail the services of
credit rating agencies viz. CRISIL, M-CRIL, ICRA, CARE and Planet Finance for
rating of MFIs and also avail nancial assistance by way of grant to the extent of
100 per cent of the professional fees of the credit rating agency.
During 2009-10, the scheme has been rened and the grant support has been
increased to a maximum of ` 3.00 lakh. The facility is available for the rst rating
of an MFI with a minimum loan outstanding of ` 50.00 lakh and maximum loan
outstanding of ` 10 crore. Duirng 2009-10, NABARD has provided grant support
of ` 15.83 lakh for rating of 13 MFIs to Banks or MFIs. The MFI-wise details of
the grant support provided by NABARD for rating of the MFIs duirng the year are
given in Statement No. X (C).
NABARD had entrusted a study to, Institute for Social and Economic Change (ISEC),
Bagalore for studying the quality and sustainability of SHGs in Karnataka. For study
purpose, three representative districts viz. Mysore (well developed), Tumkur (medium), and
Bagalkot (less developed) and the major nding are as follows:
