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| Contributor | R. Krishnamurthy, National Bank for Agriculture and Rural Development, Regional Office, Pune, India Makarand Ratnaparkhi, Department of Mathematics and Statistics, Wright State University, Dayton, USA |
| Title of paper | Micro-Finance in the new economy -India's Experience |
| Abstract | Micro-Finance is emerging as a powerful instrument for poverty alleviation in the new economy. In India, micro-Finance scene is dominated by Self Help Groups (SHGs) - Banks linkage Programme, aimed at providing a cost effective mechanism for providing financial services to the 'unreached poor'. Based on the philosophy of peer pressure and group savings as collateral substitute, the SHG programme has been successful in not only designing financial products meeting peculiar needs of the rural poor, but also in strengthening collective self-help capacities of the poor at the local level, leading to their empowerment. IFAD and the National Bank for Agriculture and Rural Development, in association with several other agencies, implemented the 'Maharashtra Rural Credit Project' during 1995-2002, having micro-finance as a crucial component. The official statistics and related MIS for savings and purpose-wise loans to 73,454 members of 4921 Self Help Groups are now available. These data have some unique features. For example, the compositional multivariate time series nature of the savings and loans data is a valuable component of the knowledge base for future. Further, our analysis shows that SHG is a useful instrument for savings mobilization and enhancing access to credit for the rural, unreached poor. Besides consumption smoothening, SHG loaning had supported working capital requirements and other productive investments as well. |
| Full document | Micro-Finance in the new economy -India's Experience |
This page last revised: Friday, 7 June 2002
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