ROLE OF MICRO FINANCE INSTITUTIONS-A STUDY OF CASHPOR MICROCREDIT IN MIRZAPUR.

Dissertation Submitted in partial fulfillment of The requirements for the degree of

MASTER OF BUSINESS ADMINISTRATATION

In

AGRI BUSINESS

Under the supervision of

Dr. Subhash Pratap Singh (Asst.Professor) Mr.Apurba Mukherjee FMS-BHU

Submitted by
Pradeep Kumar Bharti MBA-Agribusiness (2010-12) FMS-BHU

CERTIFICATE
This is to certify that research report entitled ROLE OF MICRO FINANCE INSTITUTIONS-A STUDY OF CASHPOR MICROCREDIT IN MIRZAPUR . has been prepared under my supervision by Mr. Pradeep Kumar Bharti a student of MBA (AgriBusiness) session 2010-12 of Faculty of Management Studies as part of his course curriculum. This report is his original work and up to the standard expected from an MBA (Agri-Business) student of Management faculty. I recommend this thesis be forwarded for evaluation.

SUPERV ISOR Dr. Subhash Pratap Singh (Asst. Professor) Mr.Apurba Mukherjee FMS-BHU

ACKNOWLEDGEMENT

First of all I owe my deep sense of gratitude to the god for His blessing, mercy, guidance and strength that made for me to accomplish this herculean task of writing this dissertation. I sincerely thank
Dr. Subhash Pratap Singh

&

Mr.Apurba Mukherjee, Assistant

Professor (Agri-Business Management)

for giving me an opportunity to pursue this

study entitled ROLE OF MICRO FINANCE INSTITUTIONS-A Study of Cashpor Micro Credit in Mirzapur. The project not only helped me to understand the Role of microfinance in rural area but widen my vision in this sector.

I sincerely thank and express my gratitude to Prof.S.K.Singh, Dean& Head and Chairman (Training), Faculty of Management Studies, Banaras Hindu University, Varanasi, for providing me this opportunity of learning. I express my thanks to my friends also who helped me a lot during my work. Last but not the least; I convey my whole hearted thanks to my entire batch mate for their sustained co-operation.

Date:

Pradeep Kumar Bharti

Place: Business)
3

MBA (Agri-

FMS-BHU

CONTENTS

Sr. No.

Title

Page no.

1.

Introduction

04-17

2.

Review of Literature

18-22

3.

Methodology

23-25

4.

Description of Study Area

26-28

5.

Results and Discussions

29-40

6.

Summary and conclusions

41-46

7.

References

47-48

8.

Appendices

49-51

Background of the Study

The newly emerging (and internationally more established) Microfinanacial Institution (MFI) model is a different ball game altogether. Here the sponsor is a profitoriented venture capitalist, who sees the rural credit market as a fresh business opportunity. The MFI apparently brings great professionalism, innovation and technology to its enterprise. It also ventures to provide loans that banks do not. But MFIs form no groups that are engaged in governance functions la SHGs. Even when they operate through NGOs, MFIs are primarily concerned with lending and recovering (mostly every week) what they lend to cohorts of people, at times at very high rates of interest. The recent suicide episode in Andhra Pradesh (see Gate, 2007) is a grim reminder of the possible extreme consequences of MFI lending. Since profits are the overwhelming consideration for an MFI, there is enormous pressure to lend at all costs ("dumping money on borrowers" as Ghate calls it).36 and concomitantly to recover. Added to this is the requirement of MFIs of a security deposit as cash collateral. As also high rates of interest, inevitable because of high transaction costs and a relatively low scale of operations. Another dubious practice of many MFIs is that they charge borrowers interest on the entire remaining period as well, even if they were to return a loan early. This could become a killing penalty with long remaining periods. There is also a great lack of transparency, especially in "start-up" MFIs, about such practices (Ghate, 2007). Join this to the fact that borrowers are often illiterate people, without adequate information on the terms of the loan, and we get a potentially explosive Situation. Which in a vulnerable context such as Andhra (already riddled with suicides) was bound to explode? Finally, the really poor do tend to be implicitly or deliberately excluded as they are unable to bear the pressure of recovery (Ciravegna, 2005; Scully, 2004; Marr, 2004; Simanowitz, 2002). People are reported to have had to borrow from moneylenders in order to repay MFIs. Other borrowers have "absconded", migrated or at times tragically committed suicide .This is linked to abusive collection practices that MFIs sometimes resort to. "Abusive" is a well -defined technical term with strict usage in the literature (CGAP, 2004). It includes "(I) adjusting over dues against the security deposit, (ii) holding the weekly meeting in front of the defaulter's house, (iii) MFI
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staff sitting in front of the defaulter's house, (iv) offensive language used by group leaders or staff, (v) putting up a loan overdue notice in front of a defaulter's house" (Ghate, 2006, p.66). Instances are also mentioned of recovery of large individual loans by encashing signed blank cheques, legal action to enforce blank promissory notes and physical force used by group leaders. There is huge pressure on all members because of joint liability. No one gets another loan until all repayments are made. A major demand of MFIs is that they should be allowed to raise interest rates in an unfettered manner. "No regulation can control supply and price simultaneously. So if more credit has to flow to farmers, the price (interest rate) must be deregulated" (Mahajan, 2004, p.33).37 the Enactment of anti-usury laws is said to have led to a reduction in supply of credit and rise in interest rates. Our earlier discussion and data clearly show that this is simply not true. There was a massive expansion in the supply of credit to the poor in the social banking era. And this was at low rates of interest. It is only in the reform era that the supply of institutional credit has contracted and the usurious moneylender has made a comeback. The suggestion that it is not the price of credit but its supply that is the real problem, appears ludicrous in a socio-historical context where usurious money lending has been at the heart of relations of power, which made credit easily available to the poor but at a "price that they could just not afford. However, today there are calls, even in official documents, for the poor to pay if they want to get out of poverty. The RBI's Micro-Credit Special Cell proclaims. Interest has not helped matters much. Micro-credit has to be commercialized where all patrons Micro Finance providers, intermediaries, NGOs, facilitators and the ultimate clients - must get compensated appropriately... The cell believes that freedom from poverty is not for free. The poor are willing and capable to pay the cost (RBI, 1999b, p.12, emphasis added). There are many presumptions implicit in this view that needs to be questioned: 1. That social banking was a mistake (ignoring the real achievements of the period listed earlier). 2. That social banking was all about "dollops of sympathy" (overlooking the theoretical basis on which it was grounded and continues to operate in large parts of the world).
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3. That all "patrons" need "appropriate compensation" (it is clear that the goal has shifted away from eradication of poverty as a moral obligation of the welfare state towards those. In whose name it rules and through whose votes it derives its own legitimacy). 4. That "freedom from poverty" is nigh, now that profit-oriented MFIs are here

DEFINITION OF MICROFINANCE:
The task force of NABARD has defined microfinance as provision of thrift, credit and other financial services and product of very small amounts to poor in rural, semi urban or urban areas for enabling them to raise their income level and improve their living standards Micro Finance is defined as formal scheme designed to improve the well being of poor through better access to saving and services loans (Schreiner, 2000). Micro finance is the tool that can bring the positive change in the life of the poor people of India. Micro finance is more than simply credit. ADBs micro finance development strategy defines microfinance as providing a broad range of financial services, such as; Deposits loans Payment services Money transfers Insurance to poor and low income households and their micro-enterprises ADBs definition of micro finance is not restricted to the poor; it includes low income households (ADB, 2008). According to Robinson, Marguerite (2001), microfinance refers to small-scale financial services primarily credit and savings provided to people who farm or fish or herd; who operate small enterprises or micro enterprises where goods are produced, recycled, repaired, or sold; who provide services; who work for wages or commissions; who gain income from renting out small amounts of land, vehicles, draft animals, or machinery and tools; and to

other individuals and groups at the local levels of developing countries, both rural and urban. Many such households have multiple sources of income.

MICROFINANCE INSTITUTION (MFI):

According to the definition on Microfinance Gateway an MFI is the organization that Offers financial services to the low-income people (Microfinance gateway, 2008). There is a wide range of micro financial institutions. Mostly when we talk about these, financial NGO`s come into the mind. These financial NGOs Provide micro credit and micro saving deposits from general public. Many NGOs provide other financial services along with the micro finance and similarly some commercial bank are also providing micro finance along with their routine financial activities so because of these micro finance services which are quite bit part of the whole of the activities of these commercial banks we can call these as a micro finance institutions (Rehman, 2007). There are some other MFIs that can be considered in the business of micro finance. These institutions are the community based financial intermediaries such as credit union; cooperative housing societies and some other are owned and managed by the local entrepreneur and municipalities. This type of institution is varying from country to country (Rehman, 2007) finance services too and in most cases these financial NGOs are not allowed to capture

SIGNIFICANCE OF MICROFINANCE INSTITUTIONS:

The microfinance institutions have a pivotal role to play in a society marked by economic classes. By providing small loans to poor people, these institutions attempt to provide remedies to the woes of the deprived class. Apart from this, it is through these institutions that poor people are able to avail small loan facilities on reasonable terms and interest rates. In the absence of these institutions the poor people are more likely to fall prey to the exploitation of money lenders, who are more likely to exploit the poor masses by providing loans on enormously high rates. As a result the problems of the poor class are likely to be multiplied instead of being nullified. According to Robinson, Marguerite (2001), poor people are exploited by informal money lenders who provide loans at high costs which can range from ten to more than a hundred percent.
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LEADING VIEWS ON MICROFINANCE:

According to Marguerite (2001), there are two leading approaches to microfinance: Poverty lending approach. Financial systems approach. Both these approaches tend to provide the availability of financial services for the poor, despite having consonance in their goals, each approach tends to adopt a different modus operandi for the achievement of their desired aim. We look at how these two approaches tend to operate:

POVERTY LENDING APPROACH

According to Robinson & Marguerite (2001), the basis focus of the poverty lending approach is the reduction of poverty through institutions which receive funds from donors or governmental authorities. The basic aim of the poverty lending approach is to reach the poorest of the poor. In poverty lending approach to microfinance saving is only limited to a trivial status i.e. only as a compulsion for receiving credit. Institutions adopting the poverty lending approach are not sustainable, the reason being that the interest rate on their loans is too low for the recovery of even their costs. These institutions also do not cater to the demand for micro saving services among the poor. The focus of poverty lending approach is upon micro-credit not microfinance.

FINANCIAL SYSTEMS APPROACH:

According to Robinson, Marguerite (2001), the financial systems approach focuses on financial intermediation between the poor borrowers and savers on commercial basis. This approach lays its emphasis on the institutional self-sufficiency. The world has witnessed the emergence of many commercial microfinance intermediaries in the past decades. These commercial microfinance intermediaries provide credit and saving services to the economically active poor. The loans of these institutions are financed by savings, commercial debts and through profitable investments. The financial systems approach represents a more globally acceptable model of microfinance.

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Current status of microfinance in India:

An attempt is made to highlight the current status of microfinance sector in India in terms of potential demand for microfinance services, current level approaches and supply in relation to the potential, and extent of involvement of various type of institutions. There are no clear systematic estimates available regarding the actual as well potential demand and supply of microfinance in the country. Regarding the estimation of target group for MF services one can base it on the official estimation of the number of poor in the country given the fact that microfinance is meant for the poor. The estimated size of the below poverty line (BPL) population give some idea about the potential client base of the sector. Taking the official estimation of BPL population of 260 million during 1990-2000 and the average household size, we find that there are about 52.04 million household in rural area comes to 38.6 million, the same in urban areas comes about 13.4 million. There is however, argument whether the entire BPL household should be considered for the purpose of providing Microfinance But gave the fact that even very poor household below BPL as potential client base of microfinance. Adjusting change for like population growth and household crossing poverty line during in the interval, one can say about 50 million household in the country presently constitute the basic target group of the MF sector. As regard the demand, based on the available estimates, the task force of NABARD on microfinance had put the annual credit requirement to be in the range of Rs. 15000 crore to Rs 50000 per year (NABARD) A recent unofficial estimates puts the total credit demand by the poor household in the order of Rs 15000 to 45000 crores (Mahajan and Ramola 2003). These estimates are based on the actual credit usages as reported by various studies and not potential demand. Due to variation in the average household credit use as estimated by different studies, there is a wide gap in the total estimated range of credit demand. Again there are no clear estimates about saving and insurance demand by the poor. The same unofficial study based on the assumption that the poor can save up to 5 to 10 % of their annual income, and can pay insurance premium equivalent to 3 to 5% of their income, puts the annual

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Demand for saving product in the range for Rs. 5000 crore to Rs 10,000 crore, and demand for insurance premium in the range of Rs. 3000 crore to Rs. 5000 crore. Talking to for credit saving and insurance, the annual total demand for microfinance by the poor households Can be put in the range of Rs. 2300 crore to Rs. 6500 crore in the country. Given such a demand potential, actual coverage of the target group and the extent of supply of microcredit by various agencies indicate that there is a big gap in the demand and supply of microfinance in the country. Since there are no real figures available on the actual supply of microfinance.

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Top 40 Microfinanacial Institutions in India

MFIs Spandana Share SKS Bandhan AML Microcredit Foundation of India KAS Cashpor BISWA BASIX BFL GV Mahasemam Sarvodaya nano nance ESAF Sanghamitra SEWA Kotalipara AMMACTS GK

No. Of borrower 916,261 826,517 513,108 449,304 416,829 410,329 394,462 201,692 200,912 198,282 185,448 181,328 175,089 116,625 110,122 104,614 91,096 84,458 83,236 82,562

13

SWAWS BSS Sadhana Krushi GU VWS SMS Adhikar KBSLAB AWS SMSS RGVN RASS SU Sangamam CReSA Ujjivan OMI IASC BSA Total

81,818 63,315 55,569 42,242 41,353 41,167 39,577 35,210 32,498 26,852 25,938 24,982 23,410 22,860 22,326 21,871 19,474 16,779 14,813 14,400 6,408,728

Source: The Geographic Distribution of Microfinance Services in India, 2008

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Top 20 Districts by MFI Penetration

State Karnataka Karnataka Karnataka Orissa AP AP AP AP Orissa Orissa AP AP Orissa AP Maharashtra AP Orissa Tamilnadu Orissa AP

District Kannada Udupi Kannada Nayagarh Khammam Kurnool Krishna Adilabad Puri Bargarh Medak Nalgonda Khordha Guntur Wardha Nizamabad Sambalpur Sivaganga Boudh East Godavari

Female Population 724766 6413333 1042739 449832 1376397 1873497 2237932 1337118 794948 714886 1424245 1725103 957548 2394041 660404 1278463 495157 622631 199160 2639313

Total # Active Borrowers 141840 124377 177315 74489 204287 226325 266049 158252 92834 77111 145460 175081 95698 235211 62060 120005 45742 57333 17626 225336

MFI Penetration 19.57 19.39 17.00 16.56 14.84 12.08 11.89 11.84 11.68 10.79 10.21 10.15 9.99 9.82 9.40 9.39 9.24 9.21 8.85 8.54

Source: The Geographic Distribution of Microfinance Services in India, 2008

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MFI penetration in Top 10 Urban Areas:

State

District

MFI penetration within district

MFI penetration of surrounding state 7.4629326

growth rate

growth rate of surrounding state

Andhra Pradesh Delhi Gujarat Gujarat Karnataka Karnataka Maharashtra Maharashtra Maharashtra Maharashtra Tamilnadu WestBenal

Hyderabad Delhi Ahmadabad Surat Bangalore(R) Bangalore(U) Mumbai Mumbai(Suburban) Pune Thane Chennai Kolkata

5.159789

0.711432 0 0 0

1.9776701

3.272099 0.692674

3.5712678 3.5712678

0.5000384 0.225682 0 0 0.002635 0.109339 3.382944 1.364519

1.8682336 1.8682336

0.002635 0.109339 3.176365 1.02714

0.8092153 0.8092153 3.3829474 1.3645169

0.7347145 0.7347145 1.7011636 0.8180745

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Bank Loan provided to MFIs 2007-08 and 2008-09

(Amount Rs. Crore) Agency Years Amount of loan disbursed to NGOs/ MFIs No. of MFIs 327 497 52.2 Amount 115134 1,968.60 71.0 Loan Outstanding against NGOs/ MFIs as on 31 March No. of Amount MFIs 541 158427 1,072 98.2 2,745.24 73.3 Percentage Recovery of loans

Commercial Banks (Public and Private)

2007-08 2008-09 % growth

92-100 82 100

Regional Rural Banks (RRBs)

2007-08 2008-09 % growth

7 8 14.3 0 13

0.22 1.51 586.4 0 0.04

8 24 200.0 1 13 1200.0

0.20 3.58 1,690.0 0.01 0.02 100.0 1,584.48 2,748.84 73.5

90 95.5 100

Co-op. Banks

2007-08 2008-09 % growth 2007-08

100 NA

334 518 55.1

1,151.56 1,970.15 71.1

550 1109 101.6

Total

2008-09 % growth

Source: NABARD

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Keeping in view the above facts it become necessary to know the current status of micro financial institutions in mirzapur district and their target group .The prominent MFIs in this region is CASHPOR MICRO CREDIT Ltd. CASHPOR India started its operations in mid 1997 by disbursing its first loan on 15 September in Mirzapur District of Uttar Pradesh. The entity was working with an objective to reduce poverty in eastern U.P. and western Bihar through the provision of Micro finance services to the rural poor women timely, honestly and efficiently. Its first six branches were set up in July 1997, to cover the southern part, which was poorer part of the district. Its next six branches were opened in October 1998, to cover rest of the District. Its original branches having acute poverty level were finding it difficult to become financially viable, because of little demand of loan amount, low population density and frequent casualties in the clients family leading to high portfolio at risk. The lack of market infrastructure limited the avenues of profitable enterprise for the poor. One most important survey of our dissertation that how it is helpful for poverty alleviation in mirzapur and what criteria is adopted by CASHPOR MICRO CREDIT Ltd. for choosing their target customers. This study was undertaken with following objectives: 1. To study the various financial services model provided by Cashpor and other Microfinance Institutions and its impact on poverty eradication in the study area. 2. To examine the development process through Cashpor micro-Credit and understanding the role of women in microfinance.
the

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Aghion and Morduch (2005) studied the most of the microfinance programmes are not sustainable and heavily depend upon external findings. Morduch studied that only one percent of these are sustainable and rest will either close or keep relying on subsidies (Morduch, 1999). Now the question is that should a microfinance programme be given If subsidies are worthy for subsidies in the form of low interest rates by the government and external funding by the donors and what if the donors decided to stop their funding. poverty alleviation then other investments then it is better to continue with them. Reaching poor is an expensive job. The formal Institutions left the poor because poor didnt approach themselves and the financial institution were not ready to outreach poor because of high cost. The microfinance tried to outreach the poor which has its financial costs. In these circumstances, external funding is justifiable. Krishnaswamy (2005) examined that Indian microfinance has seen unprecedented growth. For instance, during 20056, major Indian microfinance institutions (MFIs) were able to expand their active borrower base by about 110 per cent making the sector one of the fastest growing worldwide. Loans outstanding of Sa-Dhans members almost doubled from Rs 1095.1 Crore to Rs. 2070.2 crore during the same time period. In fact, in 2005, five leading MFIs from India ranked in the list of top 20 fastest growing MFIs in the world.
1,2

This trend

was reinforced by and in turn further accelerated the commercialization of the industry. Commercialization is characterized by increased competition for clients and a clear objective to seek profitability. The Majority of India's top 25 MFIs already are, or are working to become, profit-oriented NBFCMFIs (Non-bank finance companymicrofinance institutions). Despite the growth, there is considerable unmet demand for credit in India. According to a World Bank report, only 9% of poor families in India are covered by microfinance. Of the projected credit requirement of $10909 million, only $1050 million is met by microfinance. Mahajan and Nagasri (1999) analyzed India is perhaps the largest emerging market for microfinance. Over the past decade, the Microfinance sector has been growing in India at a fairly steady pace. Though no microfinance institution (MFI) in India has yet reached anywhere near the scale of the well-known Bangladeshi MFIs, the sector in India is
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characterised by a wide diversity of methodologies and legal forms. However, very few Indian MFIs have achieved sustainability yet. Sustainability itself has to be seen in a broader sense than just financial sustainability. The sustainability of Demand, of the MFIs mission, of its ownership and governance structure and the legal and regulatory framework under which it works, are all contributory to overall sustainability of an MFI. Further, the sustainability of an MFI by itself may not be enough unless a full-fledged micro-finance sector (MFS) is established on sustainable lines. Ledgerwood (1998) analysed that the key factors that contribute to the success and sustainability of the many micro financial institutions are, Favourable macro economic conditions, Managed growth, Deposit mobilization, cost control

Shekhar (1995) studied The Village Welfare Society (VWS) has been operating as a microfinance institution (MFI) since1995. Since then, the organization has not only established itself as one of Indias leading MFIs with a sizeable customer base of about 60,000, but has made visible improvements in the lives of thousands in West Bengal. VWS has truly emerged as an organization completely dedicated to socioeconomic development of the poor, particularly women in disadvantaged groups and the Unorganized sector, by continuing to help individuals realize their dreams with Financial assistance.VWS has adopted a strategy of vertical expansion by penetrating deeper in existing areas of operation. However, their model has not been shielded from current sectoral Issues, such as process intensiveness, gender perspectives, overemphasis on credit, slow growth in per capita credit, and the limited availability of holistic financial services. The microfinance movement has centred mainly on the provision of credit and VWS is no exception. It appears, therefore, that in the case of urban microfinance, if organizations are providing financial services to the poor to reduce their clients financial vulnerability, the entire gamut of financial services, including savings, investments, and remittances, poor to lift themselves out of poverty through income Smoothing, asset-building, and greater risk-taking capacity, thereby facilitating their participation in the larger economy.VWS expansion strategy must also be assessed within
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the context of increasing competition in its existing areas of operation. For example, as VWS faces increased competition from credit-only MFIs, is the vertical expansion model conducive to VWS intention to expand its customer base? Are VWS strong client reputation and resource base sufficient to drive this expansion amidst such competition? These concerns have to be addressed while considering current industry trends and benchmarks. This Case study was conducted between April and May 2006 and reflects VWSs business model at that time. Since then, VWS has undergone a major transition, part of which was a transformation of their business model from August 2006 onward. Otero et al (1994) examined to be successful, financial intermediaries that provide services and generate domestic resources must have the capacity to meet high performance standards. They must achieve excellent repayments and provide access to clients. And they must build toward operating and financial self-sufficiency and expanding client reach. In order to do so, microfinance institutions need to find ways to cut down on their administrative costs and also to broaden their resource base. Cost reductions can be achieved through simplified and decentralized loan application, approval and collection processes, For instance, through group loans which give borrowers responsibilities for much of the loan application process, allow the loan officers to handle many more clients and hence reduce costs. Gupta (1992) examined In India today, there are over 150,000 retail outlets offering banking services to the countrys vast citizenry of over 1 billion. In spite of the presence of a large branch network, however, approximately38% of the population continues to depend on informal sources, such as moneylenders and pawnbrokers, to meet their financial needs. In 1992, in order to reduce the number of households turning to these often exorbitantly priced sources, the National Bank for Agriculture and Rural Development (NABARD) developed the self-help group (SHG)-Bank linkage model by utilizing and building upon the work of several prominent NGOs, such as MYRADA and PRADHAN.Initially, the SHG movement began with a pilot testing phase in which 500 groups were linked with rural branches of six major financial institutions across India. Local NGOs assisted in the formation of groups and provided training to poor women in areas such as record-keeping and arithmetic. Today, this home grown model of microfinance has exploded with over 440 banks, with a combined SHG portfolio of over Rs. 1,200 crores , lending to over 500,000 groups that have been formed and trained by 2,000 NGOs and development organizations. The result is that financial services have been made available, in effect, at the doorsteps of over 8 million Indians who previously lacked access to products that could help smoothen consumption or
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increase income generating capacities. Indian Bank is a financial institution that has taken part in this movement by not only lending to SHGs but pioneering the public sectors involvement in the microfinance sector as a whole. Established in 1907 as part of the Swadeshi Movement, Indian Bank has evolved into a well-established financial institution with its overall business totalling Rs. 63,290 crores as of the end of the financial year 2006. Beginning in 1989, inAssociation with the International Fund for Agriculture Development and the Tamil Nadu Corporation for Development of Women (TNCDW), Indian Bank commenced its microfinance operations. To capitalize on its first-mover advantage, the Bank opened a special branch in 2005, Microsate, which was intended to run with the sole intention of managing the microfinance business, particularly through SHGs. In the Indian context, this decision was particularly noteworthy since establishing a separate branch was something that was previously unheard, unseen, and unpractised, given that many financial institutions were working on microfinance through distinct divisions. Yunus (1976) approaches The Grameen Bank lending system is simple but effective. To obtain loans, potential borrowers must form a group of five, gather once a week for loan repayment meetings, and to start with, learn the bond rules and "16 Decisions" which they chant at the start of their weekly session. These decisions incorporate a code of conduct that members are encouraged to follow in their daily life e.g. production of fruits and vegetables in kitchen gardens, investment for improvement of housing and education for children, use of latrines and safe drinking water for better health, rejection of dowry in marriages etc. Physical training and parades are held at weekly meetings for both men and women and the "16 Decisions" are chanted as slogans. Though according to the Grameen Bank management, observance of these decisions is not mandatory, in actual practice it has become a requirement for receiving a loan. Yunus (1976) studied and look the growing enthusiasm for promoting microfinance as a strategy for poverty alleviation. The microfinance sector blossomed in many countries, leading to multiple financial services firms serving the needs of micro entrepreneurs and poor households. These gains, however, tended to concentrate in urban and densely populated rural areas.It was not until the mid-1990s that the term "microcredit" began to be replaced by a new term that included not only credit, but also savings and other financial services. "Microfinance" emerged as the term of choice to refer to a range of financial services to the poor, that included not only credit, but also savings and other services such as insurance and money transfers.

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SAMPLING TECHNIQUE:-

The Mirzapur District was selected purposively because of low concentration of MFI and existence of poverty. There are twelve blocks in the districts, out of which three blocks were selected purposively. Selection indicators are given in table .On the basis of indicators one developed block i.e. Naryanpur and one underdeveloped block Marihan and Mirazapur City were selected for study purpose. Table Selection Criteria of Blocks in MIRAZAPUR DISTRICT Croppin g Intensity Productivit (%) y (Qtls/Ha) Block Chhanvey Kon Majhawa Nagar (City) Pahari Lalganj Hallia Marihan Rajgarh Shikhar Narainpur Jamalpur 114.54 112.53 159.23 155.37 133.82 143.65 130.91 150.04 156.16 139.50 165.85 175.13 20.70 22.00 22.49 21.85 19.17 22.10 18.79 20.87 22.65 21.23 21.98 22.59 97.10 82.70 82.70 88.20 97.10 100.00 88.00 93.50 91.70 71.00 88.50 95.50 Foodgrai n Area (%) Net Irrigate SC/ST d Area Populatio (%) n (%) Marginal farmer % 39.65 43.05 62.47 60.85 41.42 69.24 41.36 63.94 71.84 61.37 77.89 93.13 20.2 27.7 22.8 27.6 30.6 41.1 44.3 55.2 34.2 21 17.4 14.4 81.50 81.97 81.10 82.48 67.98 65.91 44.25 63.39 39.32 65.59 74.86 77.82

Total Milch Animal 9735 10782 34702 9412 5830 27502 49016 39675 62018 19096 34134 302 7 2

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SOURCES OF DATA:Data were collected from primary and secondary sources. Primary data collection: The primary data were collected from Cashpor Micro Credit Limited through Pre- structured questionnaire (open and close ended) Secondary data collection: The secondary data provides ready to be used information regarding an issue or event. Journals, articles, research papers, magazines, statistics reports, catalog and books (Ghauri & Gronhaug, 2005) can gather this. The use of secondary data has a number of benefits: Time conservation Better quality of material due to expert people involvement. Easy to compare Sample survey:Type of respondents. Urban poor peoples Rural poor peoples Total No. of respondents 50 30 80

Respondents were classified into two groups poor peoples of rural area and urban area respectively. Total 80 respondents were selected for data collection as indicated in the above table. Analytical tools:Simple tabular and pie diagram analysis will be done to achieve the above objectives.

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LOCATION, BOUNDRIES, AREA AND POPULATION:

The District of Mirzapur lies between the parallels of 23.52 & 25.32 North

latitude and 82.7 and 83.33 East longitude. It forms a portion of the Varanasi Division. On the north and north-east it is bounded by the Varanasi district ; on the south bounded by district Sonbhadra. On the south west by the district of Allahabad. The shape to the north and west is somewhat irregular. In no direction, except for about 13 km. in the north east where he Ganga separates the Tehsil of Chunar from the district of Varanasi , has Mirzapur a natural frontier. According to Central Statistical organisation, the district of Mirzapur had an area of 4521 Sq.Km. At the census of 2001, the population of the district is 1657140(males 1093849 and females 980860) of which 1788203 were living in rural and 286506 in the urban area of the district. District Mirzapur At A Glance 4521 sq. Kms. 2074709.00 1093849.00 980860.00 554102.00 1302.00 1788203.00 286506.00 917960.00 611282.00 306678.00 04 12 61 35 15 03 18 01

1- Geographical Area

2- Population (a) Total (b) Male (c) Female (d) Schedule Caste (e) Schedule Tribe (f) Rural Population (g) Urban Population 3- No. of Educated Personals (a) Total (b) Male (c) Female 4- No. of Tehsils 5- No. Of Development Blocks 06- No. Of Branches Of Nationalized banks 07- No. Of Gramin Bank Branches 08- No. Of Co-operative Bank Branches 09- No. Of Branches Of Development Banks 10- No. Of Other Commercial Banks 11- No Of MFIs

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Place of visit:
Mirzapur city Naryanpur Madihan

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Model of financial services provided by MFIs and its impact on poverty eradication in the study area.
Microfinance is the provision of a broad range of financial services such as

Loans Payment services Money transfers Insurance to poor and low-income households and their micro enterprises

Microfinance is often considered one of the most effective and flexible strategies in the fight against global poverty. It is sustainable and can be implemented on the massive scale necessary to respond to the urgent needs of those living on less than $1 a day, the Worlds poorest. Microfinance consists of making small loans, usually less than $200, to individuals, usually women, to establish or expand a small, self-sustaining business. For example, a woman may borrow $50 to buy chickens so she can sell eggs. As the chickens multiply, she will have more eggs to sell. Soon she can sell the chicks. Each expansion pulls her further from the devastation of poverty. Microfinance, the Grameen way, includes several support systems that contribute greatly to its success. Microfinance institutions offer business advice and counseling, while clients provide peer support for each other through solidarity circles. For example, if a client falls ill, her circle helps with her business until she is well. If a client gets discouraged, the support group pulls her through. This contributes substantially to the extremely high repayment rate of loans made to microfinance entrepreneurs. An equally important part of microfinance is the recycling of funds. As loans are repaid, usually in six months to a year, they are re-loaned. This continual reinvestment multiplies the impact of each dollar loaned. Microfinance has a positive impact far beyond the individual client. The vast majority of the loans go to women because studies have shown that women are more likely to reinvest their earnings in the business and in their families. As families cross the poverty line and micro-businesses expand, their communities benefit. Jobs are created, knowledge is shared, civic participation increases, and women are recognized as valuable members of their families and communities
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A new paradigm that emerges is that it is very critical to link poor to formal financial system, whatever the mechanism may be, if the goal of poverty alleviation has to be achieved. NGOs and CBOs have been involved in community development for long and the experience shows that they have been able to improve the quality of life of poor, if this is an indicator of development. The strengths and weaknesses of existing NGOs/CBOs and microfinance institutions in India indicate that despite their best of efforts they have not been able to link themselves with formal systems. It is desired that an intermediary institution is required between formal financial markets and grass root. The intermediary should encompass the strengths of both formal financial systems and NGOs and CBOs and should be flexible to the needs of end users. There are, however, certain unresolved dilemmas regarding the nature of the intermediary institutions. There are arguments both for and against each structure. These dilemmas are contextual and only strengthen the argument that no unique model is applicable for all situations.

MICRROFINANCE-CREDIT LENDING MODELS:

The credit delivery channel is mainly by four operating models Self Help Group models, Grameen model, Individual Banking model and a mixed model. These are the major methodologies employed by MFIs for delivery of financial services to the poor people. The SHG model is the dominant model of microfinance delivery.

SHG MODEL:
The operation of SHGs is based on the principle of revolving members own savings, which are augmented by funds borrowed by banks (SHG-Linkage Programme) or MFIs (the alternate channel). Saving thus precede borrowing by the members. The volume of member saving or the saving of the group as a whole determines the borrowings of the individual. In this, MFIs/NGOs obtain external funds in bulk and channelize it to the members via SHGs. NABARD has facilitated the SHG-Bank linkage programmed which entails banks lending directly SHGs rather than via bulk loans to MFIs. NABARD refinances the loans of the commercial banks to SHGs. The SHGs are linked to commercial bank (58%), Regional Rural Banks (33%) or Cooperatives (9%).There is three models of SHG-Bank linkages that have evolved over time. These are:
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MODEL I. SHGs FORMED AND FINANCED BY BANKS. (20% of SHGs financed):

MEMBERS

Saving

SHG

Saving

BANKS

Credit at rates decided by the members

Forming and Nurturing of groups. Credit at rates decided by the banks

MODEL II. SHGs FORMED BY NGOS AND FORMAL ORGANIZATIONS BUT DIRECTLY FINANCED BY THE BANKS. (72% of SHGs financed)

MEMBERS

SHG

BANKS

Credit at rates decided by the members

Credit at rates decided by bank

Formed, nurtured and trained by NGOs and agencies.

NGO/ GOVERNMENT AGENCIES

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MODEL III. SHGs FINANCED BY BANKS USING NGOS AND OTHER AGENCIES AS FINANCIAL INTERMEDIARIES (8% of the SHGs financed):

MEMBERS

Savin g

SHGs

Support and Linkage Services

Credit at rates Decided by NGO

BANK
Credit at rates decided by the bank/ grants

NGO

GRAMEEN MODEL:
The Grameen Bank of Bangladesh initially promoted this model. Grameen MFIs undertake individuals lending but all borrowers are required to form into five member groups. The groups, in turn, get together with 7-10 other neighboring groups to form a centre. Peer pressure among the members is the key factor in ensuring repayment. Each borrowers credit-worthiness is determined by the overall credit-worthiness of the group. Savings are a compulsory component of the loan repayment schedule but do not determine the magnitude or timing of the loan. The important MFIs following this model are Share Microfinance Limited (registered as NBFC) in Andra Pradesh and Cashpor in Uttar Pradesh. .

Joint Liability Group 5 Individual Members

Centre 8 groups

Individual credit worthiness determined by groups

Bank Branch 150-200 centers

MIXED MODEL:
Under mixed model, some of the MFIs started with the Grameen model but later on went on to adopt some aspects of the SHG model. A prominent MFI that follows a hybrid model with features of both Grameen and SHG is Spandana, which operates in the Guntur region of Andra Pradesh. There are others MFIs that have chosen to adopt either Grameen or SHG model to cater individuals market segments. Few organisations are also providing individual banking type products and methodologies, in addition to group based methods to provide financial services. An important example is BASIX that uses diverse methodologies each suited to a particular market segment. Others such as the Indian Association of Savings and Credit (ISAC), a section 25 company promoted by the Housing Development Financial Corporation (HDFC) gives individual as well as group loans.

INDIVIDUAL BANKING MODEL

This model includes the provision of financial services by MFIs to individual clients. There are two sub models in it one where JLGs are formed and provide the social collateral to the lending institution and, the other being direct lending to individual client. However, the models are appropriate for larger client. Many MFIs like BASIX.

LOAN DELIVERY SYSTEM OF CASHPOR MICRO CREDIT

Loan Delivery Models

Conventional /Branch Model Partnership Model

Under both the models the loan deliver to individual member on their joint liability. Each model is almost similar except infrastructure and Group size, which are described as under-

Conventional Model :
In Conventional Model Cashpor has adapted FI (Financial Intermediation) methodology, where Cashpor takes money from different banks in a pool and lend it to clients. Here the outstanding occurs in the books of the Cashpor.

Operational Features : Under this model we have 10 Branch offices associated with a District office. Each branch has 8 CM (Center Manager). CM reports to Branch Manager, whereas Branch Manager reports to Area Manager and Area Manager reports to District Manager. A group consist 5 members and a Center consist 4 groups. Center Meeting happens once in a week . Partnership Model : In Partnership Model Cashpor has adapted SI (Social Intermediation) methodology, where Cashpor manages the money of its partner Banks/FIs. Here the outstanding occurs in the books of the partner (Banks/FIs). Cashpor takes service charges in lieu of its services. As a Social Intermediary Cashpor undertakes following functions: Identification of poor clients. Group formation. Imparting training to the groups. Grading/Recognizing the groups. Taking loan proposals. Disbursing loans to poor clients and Taking care of repayments and managing delinquency. Operational Features : Under this model we have a District office divided into 4 units, whereas units don't have it offices. District office is headed by District Manager and units are headed by their Unit Managers. Each unit has 20 CM. CMs reports to Unit Manager, Unit Managers reports to District Manager and District Manager report Managing Director. All the center managers and Unit Managers report ones in week to District office.

Cashpors house index method:

The CASHPOR Housing Index is a cost effective method to identify poor households through visual inspection from the road or lane outside the house. It uses a points system that allocates a predetermined number of points for each main component of house e.g.its size, the material of roof and walls and its structural condition. Points are allocated according to the appropriate amount of investment required to buy or build this particular component. This means that the index is locally determined and is weighted towards the most expensive components of the house in the local context. The points scored by any house are added into a total. Each MFIP determines its own cut-off levels for points scored on the House Index. Two cut-off levels are set. Each house is then assigned according to the cut-off points into three groups: 1. Very poor 2. Moderate Poor 3. Non- poor

Alleviation of poverty through public sector bank:

Kisan Credit Card: The scheme aims at providing adequate and timely credit for the
comprehensive credit requirements of farmers for taking up agriculture and allied activities under single window, with flexible and simplified procedure, adopting whole farm approach, including the short-term credit needs and a reasonable component for consumption needs, through Kisan Credit Card including repayment of farmer's dues to non-institutional lenders.

Crop Insurance under NAIS:

All Crop loans under KCC are to be covered under National Agricultural Insurance Scheme (NAIS) in respect of the notified crops. It is implemented with the approval/consent of State Government concerned, which is monitored and followed up by SLBC of that State. The following crops are covered under NAIS:-

a) b) c)

Food crops (cereals, millets, pulses) Oil seeds Sugar cane, cotton and potato (annual commercial / annual horticulture crops)

All farmers both loanee and non-loanee farmers growing the above notified crops in the notified areas are eligible for insurance coverage. In each district, there is a Nodal Branch for receiving premium for insurance coverage and remitting the premium to the Agricultural Insurance Corporation of India. Subsidy on premium is allowed in respect of small and marginal farmers.

Personal Accident Insurance Scheme (PAIS):

The coverage under PAIS is also compulsory for all KCC holders. The premium payable under the scheme is to be shared by the issuing Branch and the KCC holder in the ratio of 2:1. The premium payable for a one-year policy is Rs.15/- while the same for a three-year policy will be Rs.45/- only. The insurance coverage will be from the date of receipt of premium by the Insurance Co.

The development process through micro-finance and understanding the role of women in microfinance.
Micro finance is expected to play a significant role in poverty alleviation and development. The need, therefore, is to share experiences and materials, which will help in not only understanding successes and failures but also provide knowledge and guidelines to strengthen and expand micro finance programmes. In India, a variety of micro-finance schemes exists and various approaches have been practised by both GOs and NGOs. In the development sector, credit has been viewed as one of the missing inputs and therefore, a growing emphasis on re-formulating and restrengthening micro credit programmes is observed. There are examples of spectacular successes and there are examples of not-so-successful programmes, which experienced high default rates and were unable to provide financial services in the end. Ultimately, the aim is to empower the poor and mainstream them into development. Amongst different approaches of micro-finance schemes, the process and stages remain more or less the same. The ultimate aim is to attain social and economic empowerment. Successful intervention is therefore, dependent on how each of these stages has been carefully dealt with and the capabilities of the implementing organisations in achieving the final goal, e.g., if credit delivery takes place without consolidation Of SHGs, it may have problems of selfsustainability and recovery. A number of schemes under banks, central and state governments offer direct credit to potential individuals without forcing them to join SHGs. Compilation and classification of the communication materials in the directory is done based on this development process. The socio-economic benefits of microfinance are threefold: 1. Job creation 2. Poverty reduction 3. Empowerment

ROLE OF WOMEN:

Criticality of women and gender issues in microfinance programmes is best highlighted by a quote from Mohammed Yunus, founder of Grameen Bank. Explaining why 94 percent of Grameen Bank's loans go to women, he said, "Women have plans for themselves, for their children, about their home, the meals. They have a vision. A man wants to enjoy himself." Availability of finance to women ensures that resources and profits generated are ploughed back into the development of the immediate household and family. Protection of family values, of health and safety of household members, of a more even distribution of income, can be seen as a result. Better distribution of income and other resources in the household essentially means that personal health and well-being is protected - a key to broader development processes. As a result, experimentation and innovation is attempted, and risk of environmental accidents or hazards reduced, particularly in home-based or householdbased enterprises, where women play a significant role. This enablement also introduces a sensitivity of environmental problems and effects to a household in its everyday life

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The newly emerging (and internationally more established) Microfinanacial Institution (MFI) model is a different ball-game altogether. Here the sponsor is a profitoriented venture capitalist, who sees the rural credit market as a fresh business opportunity. The MFI apparently brings great professionalism, innovation and technology to its enterprise. It also ventures to provide loans that banks do not. But MFIs form no groups that are engaged in governance functions la SHGs. Even when they operate through NGOs, MFIs are primarily concerned with lending and recovering (mostly every week) what they lend to cohorts of people, at times at very high rates of interest. The recent suicide episode in Andhra Pradesh (see Gate, 2007) is a grim reminder of the possible extreme consequences of MFI lending. Since profits are the overwhelming consideration for an MFI, there is enormous pressure to lend at all costs ("dumping money on borrowers" as Ghate calls it).36 and concomitantly to recover. Added to this is the requirement of MFIs of a security deposit as cash collateral. As also high rates of interest, inevitable because of high transaction costs and a relatively low scale of operations. Another dubious practice of many MFIs is that they charge borrowers interest on the entire remaining period as well, even if they were to return a loan early. This could become a killing penalty with long remaining periods. There is also a great lack of transparency, especially in "start-up" MFIs, about such practices (Ghate, 2007). Join this to the fact that borrowers are often illiterate people, without adequate information on the terms of the loan, and we get a potentially explosive Situation. Which in a vulnerable context suchas Andhra (already riddled with suicides) was bound to explode? Finally, the poor do tend to be implicitly or deliberately Excluded, as they are unable to bear the pressure of recovery (Ciravegna, 2005; Scully, 2004; Marr, 2004; Simanowitz, 2002). People are reported to have had to borrow from moneylenders in order to repay MFIs. Other borrowers have "absconded", migrated or at times tragically committed suicide .This is linked to abusive collection practices that MFIs sometimes resort to. "Abusive" is a well -defined technical term with strict usage in the literature (CGAP, 2004). It includes "(I) adjusting over dues against the security deposit, (ii) holding the weekly meeting in front of the defaulter's house, (iii) MFI staff sitting in front of the defaulter's house, (iv) offensive language used by group leaders or staff, (v) putting up a loan overdue notice in front of a defaulter's house" (Ghate, 2006, p.66). Instances are also mentioned of recovery of large individual loans by encashing signed blank
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cheques, legal action to enforce blank promissory notes and physical force used by group leaders. There is huge pressure on all members because of joint liability. No one gets another loan until all repayments are made. A major demand of MFIs is that they should be allowed to raise interest rates in an unfettered manner. "No regulation can control supply and price simultaneously. So if more credit has to flow to farmers, the price (interest rate) must be deregulated" (Mahajan, 2004, p.33).37 the Enactment of anti-usury laws is said to have led to a reduction in supply of credit and rise in interest rates. Our earlier discussion and data clearly Show that this is simply not true. There was a massive expansion in the Institutional credit has supply of credit to the poor in the social banking era. In addition, this was at low rates of interest. It is only in the reform era that the supply of contracted and the usurious moneylender has made a comeback. Keeping in view of developmental roll of MFIs this study was undertaken following objectives: 1. To study the various financial services model provided by Cashpor Micro credit and other MFIs and its impact on poverty eradication in the study area. 2. To examine the development process through micro-finance and understanding the role of women in microfinance. The Mirzapur District was selected purposively because of low concentration of MFI and existence of poverty. There are twelve blocks in the districts, out of which three blocks were selected purposively. Selection indicators are given in table .On the basis of indicators one developed block i.e. Naryanpur and one underdeveloped block Marihan and Mirazapur City were selected for study purpose. Data were collected from primary and secondary sources. Respondents were classified into two groups poor peoples of rural area and urban area respectively. Total 80 respondents were selected for data collection.

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MFIs and public sector bank helps in poverty eradication:

Microfinance is often considered one of the most effective and flexible strategies in the fight against global poverty. It is sustainable and can be implemented on the massive scale necessary to respond to the urgent needs of those living on less than $1 a day, the Worlds poorest. Microfinance consists of making small loans, usually less than $200, to individuals, usually women, to establish or expand a small, self-sustaining business. For example, a woman may borrow $50 to buy chickens so she can sell eggs. As the chickens multiply, she will have more eggs to sell. Soon she can sell the chicks. Each expansion pulls her further from the devastation of poverty.

MICRROFINANCE-CREDIT LENDING MODELS:

SHG MODEL: The operation of SHGs is based on the principle of revolving members own savings, which are augmented by funds borrowed by banks (SHG-Linkage Programme) or MFIs (the alternate channel). Saving thus precede borrowing by the members. The volume of member saving or the saving of the group as a whole determines the borrowings of the individual. In this, MFIs/NGOs obtain external funds in bulk and channelize it to the members via SHGs. NABARD has facilitated the SHG-Bank linkage programme which entails banks lending directly SHGs rather than via bulk loans to MFIs. NABARD refinances the loans of the commercial banks to SHGs. The SHGs are linked to commercial bank (58%), Regional Rural Banks (33%) or Cooperatives (9%). GRAMEEN MODEL: In this model, each borrowers credit-worthiness is determined by the overall credit-worthiness of the group. Savings are a compulsory component of the loan repayment schedule but do not determine the magnitude or timing of the loan. The important MFIs following this model are Share Microfinance Limited (registered as NBFC) in Andra Pradesh and Cashpor in Uttar Pradesh. MIXED MODEL: Under mixed model, some of the MFIs started with the Grameen model but later on went on to adopt some aspects of the SHG model. A prominent MFI that follows a hybrid model with features of both Grameen and SHG is Spandana, which operates in the Guntur region of Andra Pradesh.

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INDIVIDUAL BANKING MODEL: This model includes the provision of financial services by MFIs to individual clients. There are following types of financial services are provided for poverty alleviation:

Loans Deposit Payment services Money transfers Insurance to poor and low-income households and their micro enterprises

The microfinance provides various socio-economic benefits via: 1. 2. 3. 4. Poverty reduction Empowerment Job creation Empowering the women

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SUGGESTIONS:-

The new Micro finanacial institution launches new financial scheme. The amount which are provided to borrower should be somewhat increased. Interest rate should be minimized. The duration of repayment period should be increased. Some educational purpose-financing scheme should be increased. Not all financial schemes are being provided by the all the Microfinanacial Institutions, it must be compulsory to provide all same financial schemes. The MFIs should be focus same to all segment of instead women. There are various new schemes are launches to poverty alleviation for male and female both. MFIs must be involved in some social works, such as opening the school for poor, hospital etc.

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Aghion and Morduch (2005) why all the microfinance programmes are not sustainable. Krishnaswamy Karuna (2005) Indian microfinance has seen unprecedented growth. Mahajan and Nagasri (1999) India is perhaps the largest emerging market for microfinance Ledgerwood (1998) key factors that contribute to the success and sustainability of the many micro financial institutions. Churchill C.F. (1996) " An Introduction to Key Issues in Microfinance: Supervision and Regulation, Financing Sources, Expansion of Microfinance Institutions," Mahajan Vijay and Bharti Gupta Ramola (1996) Financial Services for the Rural Poor and Women in India: Access and Sustainability, Journal of International Development, Vol. 8, No.2, 211-224 Web Portals:Microfinance Portal (www.microfinancegateway.org) Micro finance Development Strategy (www.adb.org) www.grameen_info.org www.nabard.org www.unitus.org www.icici.org

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Questionnaire:

1: Why MFIs Charges High rate of interest on loan amount? A) Because do not require any collateral. B) Because it provide small amount of loan. C) Because it provide loan at right time. 2: Why MFIs give more emphasis on the women.? A) Because they are more reliable than man in repayment of loan. B) For empowering the poor women. C) Because of high unemployment rate. 3: Why MFIs had better than public sector bank? A) Because they have not required the more formalities as PSU. B) They provide less amount of loan. 4: What are the Poverty lending approaches Of the MFIs? A) The reduction of poverty through institutions. B) Receive funds from donors or governmental authorities. 5: What are the financial lending approaches of MFIs? A) B) Focuses on financial intermediation between the poor borrowers and savers. Give the emphasis on the institutional self-sufficiency

6: Why MFIs prefer to provide loan to self help group (S.H.G.)? 7: What is the Strength and weakness of MFIs?

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Strength: A) Because they provide less amount of loan. B) The accessibility is very fast. Weakness: A) The high rate of interest. B) They provide only low amount of loan.

8: Why the repayment rate of MFIs is very high.? A) Because customer is very reliable. B) Because of low amount of loan. C) Because of companies creditability. 9: Why MFIs is different from other loan program? 10:Why Women SHGs are more successful?

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