BY WAIKHOM BHOPENDRO SINGH MBA(3rd sem) Galaxy global Group Of Institutions, 22nd november 2012

What is Microfinance Role of microfinance Origin of microfinance Profile of Microfinance Institution in India and growth Activities in microfinance SHG and how it work Top five leaders &players in Microfinance industry as per crisil rating. Working process of microfinance industry in India. Company profile, vision and mission Findings from the study. Suggestions and conclusion.

According to International Labor Organization (ILO), Microfinance is an economic development approach that involves providing financial services through institutions to low income clients.

Microfinance helps poor households meet basic needs and protects them against risks. The use of financial services by low-income households leads to improvements in household economic welfare and enterprise stability and growth. By supporting womens economic participation, microfinance empowers women, thereby promoting gender-equity and improving household well being.

The emergence of informal financial institutions in Nigeria dates back to the 15th century, they were first established in Europe during the 18th century as a response to the enormous increase in poverty since the end of the extended European wars (1618 1648). In 1720 the first loan fund targeting poor people was founded in Ireland by the author Jonathan Swift. After a special law was passed in 1823, which allowed charity institutions to become formal financial intermediaries a loan fund board was established in 1836 and a big boom was initiated.

Their outreach peaked just before the government introduced a cap on interest rates in 1843. At this time, they provided financial services to almost 20% of Irish households. The credit cooperatives created in Germany in 1847 by Friedrich Wilhelm Raiffeisen served 1.4 million people by 1910. He stated that the main objectives of these cooperatives should be to control the use made of money for economic improvements, and to improve the moral and physical values of people and also, their will to act by themselves. In the 1880s the British controlled government of Madras in South India, tried to use the German experience to address poverty which resulted in more than nine million poor Indians belonging to credit cooperatives by 1946

. During this same time the Dutch colonial administrators constructed a cooperative rural banking system in Indonesia based on the Raiffeisen model which eventually became Bank Rakyat Indonesia (BRI), now known as the largest MFI in the world.

Microfinance began in India in the 1990s as a way of alleviating poverty, by encouraging income generating activities by poor households. Estimated that 350 million people live Below Poverty Line This translates to approximately 75 million houses. Annual credit demand by the poor in the country is estimated to be about Rs. 60,000 crores. Cumulative disbursements under all micro finance programmes is only about Rs. 5000 crores. Total outstanding of all micro finance initiatives in India estimated to be Rs. 1600 crores. Only about 5 % of rural poor have access to micro finance.

Some quick highlights industry growth in India: MFIs have recorded about 8.5 million clients during the year 2008-09, a growth of 60% over the previous year. More than 50 percent of low income households are covered by some form of microfinance product The total outstanding microfinance loans posted a growth rate of 30% or 359.39 billion over the last years level of Rs 229.54 billion. The overall coverage of the sector is estimated to have reached 76.6 million against 59 Million last year. The SHG loan outstanding has increased by Rs. 71.5 billion with an addition of 6.9 million clients.

Some parts in Karnataka faced entrenched default constituting a portfolio share of less than 0.5%. MFIs so far reached 234 of the 331 poorest districts identified by the government. SBLP registered a decline of number of women SHGs from 82.5% in March 2007 to 80.4% in March 2008. The microfinance penetration index shows especially in Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh compared to extraordinary levels reached in Andhra Parades, Karnataka and Tamil Nadu. While last years report focused on the increased risk in the sector, this years report takes stock of the uninterrupted growth rate of the sector despite several internal and external adversities.

Microcredit Micro savings Micro insurance Remittances

NABARD (1997) defines SHGs as "small, economically homogenous affinity groups of rural poor, voluntarily formed to save and mutually contribute to a common fund to be lent to its members as per the group members' decision". Most SHGs in India have 10 to 25 members, who can be either only men, or only women, or only youth, or a mix of these. As women's SHGs or sangha have been promoted by a wide range of government and nongovernmental agencies, they now make up 90% of all SHGs.

SKS Microfinance Ltd (SKSMPL) Spandana Sphoorty Financial Ltd (SSFL) Share Microfin Limited (SML) Asmitha Microfin Ltd (AML) Shri Kshetra Dharmasthala Rural Development Project (SKDRDP)

The company was launched as a non banking finance company in September 2008 under the name of Shavi Trexim and Holdings Pvt. Ltd. In the year 2009 considering the growth of the company the name was changed to UNACCO FINANCIAL SERVICES PVT. LTD. having it's Head Office at National Games Village Apartment, Flat No.402, 4th Floor, Block No. A15, Borsajai, National Highway 37, Beltola, Guwahati- 781029. The Registered Office of the company is at 12/2, Sovram Bysak Street, Kolkata 700007

VISION:

1 million members in 2015.

MISSION:

To restore the pride through economic development and create sustainable social development Therefore, UFSPLs mission is to provide micro credit and other financial services to poor household by using women as medium To generate direct as well as indirect employment for educated un-employed local youths; To provide quality education at affordable cost to children of poor family; To improve the pace and quality of life of the rural and urban poor especially the village and decentralized sector

It is found that most the clients of the UNACCO come to know about the product and services through Field Executive and only a few members come to know through clients,advertisement,friends,relatives etc. It is also found that 20% of the current clients want to take individual loan for their business needs. It is also found that most of the clients of UNACCO are satisfied with the current interest rate only few clients are not satisfied. It is also found that the current clients are not taking loan from other sources other than UNACCO as they are satisfied with the UNACCOs services and only few are taking loan from other sources.

Some of the competitors of UNACCO are Loyalam,Chanura,YVU in manipur and Assomi,RGVN,Nghtingle..etc. in assam. Among these UNACCO is the leading company in providing loan facilities in manipur. The quality of the service experienced by the customers,the customer training provided by the company and field executive experience is found to be satisfactory and cooperative. There is no dissatisfaction in the loan collection procedure by the customers.

It is lkely to increase UNACCOs loan amount on the next term as 90% of the group member want to increase their loan amount in the next term as the current loan amount is not sufficient for their business. 20% of the group members want to take loan individually with higher loan amount.So it is also likely to give loan for individual as well as group. 20% of them want to change their payable day into monthly instead of paying monthly and 10% of them want to add some interest on their saving a/c.Some more suggestios are: The members are liked to decrease their deposit amount. It is also like to reach the advantages of UNACCO FINANCAL SERVICES LIMITED loan facility not only to some districts but also throught the manipur for a better socio-economic condition.

From the above it is felt that, Poor people need a variety of financial services, not just loans. It is a powerful tool to fight poverty further, Interest rate ceilings making it harder for poor people to get credit. The role of government is to enable financial services, not to provide them. Donor funds should complement private capital, not compete with it. The key bottleneck is the shortage of strong institutions and managers. In such a condition, UNACCO FINANCAL SERVICES LIMITED is helping Manipur to develop not only the organization but also to any field.