Micro Finance Topic

Definition :

The word Micro means itself is small.

Where as finance mean money.
 

The word Micro finance means motivating the people with small credit or loans.
 

Micro Finance is a finance, where small organization help the poor people financially.
 

The MFI’s (Micro Finance Institutions) like NGO’s helps the small business people internally.
 

It encourages the SMI’s.

History :

It came into existence in 1970 in India.
 

In 1983 Dr Muhammad Younus formed the Grameen bank in Bangladesh it served over 40,00,000 poor people of Bangladesh.
 

This motivated the encouragement for some more micro credit Institutions like ASA, BRAC ,PROSHIKA.
Many credit groups have been operating in many countries for several years, for example ,the “chit funds” (India), “tontines” (West Africa), “susus” (Ghana) ,”pasanaku” (Bolivia) etc. 

Concept :
 

MFI’s (Micro Finance Institutions) concept is to remove the poverty in rural areas.
 

Motivating the Small Entrepreneurship.
 

Making the financial stability to the economy.
 

Increasing the GDP rate.
 

Balanced growth in rural and urban areas.
 

Helping to sick Industries for reconstruction.


Micro Finance Institutions:


SKS Microfinance Ltd (SKSMPL)

Spandana Sphoorty Financial Ltd (SSFL)

Share Microfin Limited (SML)

Asmitha Microfin Ltd (AML)

Shri Kshetra Dharmasthala Rural Development Project (SKDRDP)

Bhartiya Samruddhi Finance Limited (BSFL) Bandhan

Cashpor Micro Credit (CMC)
 

Grama Vidiyal Micro Finance Pvt Ltd (GVMFL)

Grameen Financial Services Pvt Ltd (GFSPL)


Problems of Micro Finance:

High rate of interest
 

Forcing in recovery of loan amount.
 

Entry easy and Exit is critical.
 

Undue Influence.
 

More Rules.
 

Less perception.
 

Uncontrollable Rules.


Conclusion:

MFI’s is a Boon as well as Bane to the countries.
 

Boon : It encourages the economy financially where banks cannot.
 

Bane : MFI’s leads to the crises to the economy.