Micro Finance in India Final

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SUMMER INTERNSHIP PROGRAM c ccc Microfinance in India with special reference to Canara Bank

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c ^MICROFINANCE IN INDIA WITH SPECIAL REFERENCE TO CANARA BANK´

A Dissertation Submitted to Institute for Technology and Management, Bangalore For the Partial Fulfillment of the PGDM Program

By SWATI BHARDWAJ Reg. No: PGDM 2009-11/53

Under the Guidance of:

Industry Guide- Mr. B. S. Umesh Rao Senior Manager-Microfinance Division Faculty Guide- Prof Madhavi Jayanthicc Lecturer Finance

Institute for Technology and Management Bangalore-560076 2009-11

DECLARATION pc c c c c c c c c Microfinance in India-with special

reference to Canara Bankåc cccc c!! c" #ccc c!c c$c ccc% c"c c %c c&''()**c c c" c!c%c !c " c Prof. Madhavi Jayanthic !c p c " c c %c %c " c Mr. B. S. Umesh Rao#c+ c " ) ! c,-ccMr. Ashwani Kumar#c " #c ") #c "c#cc c."#ccc //#c" /c cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccpcc c c c cc c c!c%c !!cc c c

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1) STATEMENT OF THE PROBLEM ^The study of Microfinance in India with special reference to Canara Bank´. pcc c!c c " c c cc c$c /c c "c$ #c #c- cc Accc "cc %c$!cc%c4')4;Bc!c c c c c c $c- c cCD/c c c cc - c cc%

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c Figure 1

c

c c c

&'c c

c

2.7) COMPETTIORS INFORMATION 1) State Bank of India: c+ cc #c$ c- c*3'''c #c c c" c c $ccpc c c c c *5*c - c !! c c - c 4&c /c + c c !c pc c c!c c"c<cc!cpc$ cpppc#c 1ccc ,<c/c c + cc!cpcc&( c%c c%cc c$c"cc< /c c c !c c c c c c #c +-"#c p- % #c - #c +pc ! c p c /cc c 2) ICICI Bank: pc c p c " c - c c c c % c ?c c c " c - c c %c !c /c c c c c c $c !c *#35'c c c c 5#6*3c ccpcc cc*6c #cc$ cc% c&5c%c% /c pppcc!! cc$ c" c!c "ccc !c - cc c c c% c " cc- c!c - c /cpppcccc c" c c!c cccp/cc c 3) Bank of India:cc cpc $c c c :c + % c *('3c c $ c c E c c %/c

- % )$ c c?cc*(3(#cpcc c!cp c "c#c$ c c 4*'*c c "c &:c c c p/c c !c pc c c ! c % % c!c+.p<cC+ c!c.$ cp cc<c %%Dcc pc $ c ! c -c !c ) !! - c !c "c c %%c - /cc c c c c c c c &*c c

c

2.8) INFRASTRUCTURAL FACILITY Uc ccc cc c c!c cc$ c cc c%)!c"c $ cc c cc!cc c % /ccc Uc c c c !c % ? c c $ c ! c $ c c c !c c c

%

cc Uc cc- c% c! ccc %

cc Uc pcc- c c!cc c %

cc c /cc Uc ccc- c- c!cc- "c$ cc c %

c Uc ccc c- c$ cE c! ccc %

cC!! D/c Uc c c c c c $c "c c c - c c %

>c $ " #cc@c /c

2.9) WORK FLOW MODEL

ccccccccccccccccccccccccc

c

Figure 2 the loan sanction process

cc cc$c$c ccc$c!$c /c >c cccc% #c c c $ c E c c c

c c !c c c c %c c c c - c c /c c c c c %c ""c c c%Acc

cc c c c !c c c c !%c c c c /c c c c cc!c c c " c c-cc c!

c!%c "c /cc c c c c c c c c !c c E % c c !! Ac c !c c c %cc 1

"c c%c!c c #c c E cc!$ cc c c!! cc c &&c c

c c!! /c c cc c c!! c- ! cccc c c/c c c C- 9 Dc c c c c c - c #c c c c c c /c c !" c- c- cc c "c!c c% /c

2.10) AWARDS/ACHIEVEMENTS c Uc <c c $#c c c c c !c #c +%c @c %c #c

-/c!cpc!c±Excellence in Micro & Small Enterprises (MSE) Lending±c!c&''3)':/c Uc ±Golden Peacock Award for Corporate Social Responsibility±c !c c c &'':/c c cc c!c+cc - c c$c cccc c c*((*/cc Uc ÎGolden Peacock National Training Award-2007å#c cc cp c!c, #c $c, #cc

cc8c -/c Uc ! c cBusiness Super brandsc+c!c&''6/cc Uc c "?c !c c c $)c !c c 1 #c c c c c c!cp/c Uc 1 cc c! c!cKhadi & Village Industriescc+ cL c!c c c&''3)':#c cc= c@c7" cp c%%#c c!c #c+%c@c %c #c - % c!cp/cc Uc - c "c &''6)'(! c ±First Rank±c c p c c c $c c c "c±Strength and Soundness±c!c&''3)':ccc- c ccc@c"/c Uc Best Performing Bank under Rural Employment Generation Programme#c C Dc !c = c c 7" c p c %%c C=7pD#c c + c L c !c c c &'':)'6#c cc cMinistry of MSME, Government of India/c Uc c cc"c $c&''6c!c 1 cc"/c Uc Global HR excellence in Training#cc$c! cc cAsia Pacific HR Congress#c c " c ?-c !c c ! #c c c % c "c c " % c " c cc&&cc&4c "c&''6#c, /c Uc c c +c c c $#c c c +#c ++ c c % c</c

&4c c

c Uc cc$c$c+- c c c $c!cBest Corporate Ad in the Print Media and Best Corporate Film on Corporate Social Responsibilityc c c c cc!cpc $c&''(/c Uc Best Bank in South Zonec $c!c c c&''6)'(cc c!c "c c=7pcc c + % /c c $c $c c - c c ,/ % c +" #c > c % c c!cpcc Uc c c - c cCredit Guarantee Approval Certificatec c c +c !%c + cc

#c > c< c c!cp/c

c

2.11) FUTURE GROWTH AND PROSPECT c Uc cc%cc cc"" " c c!" c!c/;c c #c%"cc c!c/&6;'''c cc- c!c/&*;'''c /ccc Uc c c $c c c !c c c #c $ c c - c !c "% "c !cc!/cc Uc 1"c"c!#c ccc cc cc - c!! cc+ c ccccpc-c c cc(c c /cc Uc " cc - c*''Bc+c- " cc2 c&'*'c Uc cc ccc c- c&''c $c c"c<&'**/c c

c c c c c c &5c c

c

3) McKINSEYåS 7s FRAMEWORK c >c:ccc-c c!c c c!cc"?/c c c cc!c % /c c!" c $c $c c!% $/cc <"/c40c >c<% $c

ccccccccccc

c

Figure 3

3.1) Structure c "c!c"?c ccc$$c%%c!c!%cc c/c c!%c!$cc$#c/ /c!%c) - c%" % cc$ c - /c c %c c%""c c - c c c cc c"?/c c"- ccc c

1 - c c c c " c %" c $ c c c "- c c c c $ c - c %" /c c % c - c %" % c c !c " c %" c c %c /c %"c c % c c

c " c -c c - c " /c pc c !c %c c c c /c

c c c $c %% c c c c c

!% cc- c "cc c" c%" /cc

3.2) Skills ccccccccccccc c c c %c c !$ c c !c c c c c c c c c "?c c c c c c c !c c c

%

cc@cc!cc cc%" % /c cccc -"c " c c %

/c c c!c c"?c 0c

&;c c

c Credit Skills: c! c c " cc%-"c c cEc c"c"%c !c""c cc@c c%"c#c )c@c)c -#c "c %"c !c #c !c % #c /#c $c c - /c c "c !c c c@c-"c$cc cc ccc% c@c c - cc Ec % - c !c c/c Technology Skills: c c c -"c c - c "c c Ec @c c !c % /c c c c cc #c )"#c c#c c /#cc "c!c c!c - c c #c%c!#c"- % c /cp "c)!c % #c c "% c- c @c c ! c c cc%- c c!c @cc % c"$ cc c-% c% c /cp% c cc

c"- cc c c $c c #c 9 Fc - c @c c c "c 1 c c %- c

!! c!c c /c Operating Skills: c cc "c)!c% #c c "% c- c@c c ! c c c c %- c c !c @c c % c "$ c c c -% c % c /cp% c cc

c"- cc c c$cc #c cc "c

1 c c !! c % c c !c % #c %c @c %" c -c c c$ c c"c cc c c!c #c c c@cE/c

3.3) Style c c!cc"?c"cc c c!% $c % c - c " c c c!cc cc% % c!cc%" % c %c- cc c!c% /cc G

pc c

c - cc ccc c c -c!c c$c c cc /c c %- c ! c $ c c $"c c %/c c c c c $ c 1c c c c /c c c !c c $c c c ! c c %/c $ c c c c c #c c $ c c c c c %

"#c #c c #c c "c c c c "" c c c "- c c /c c c c c!c c/c c c!c cc c -- c /cc

&3c c

c

3.4) Strategy + "c c c !c "%c !c c !c -"c c "?c - c c

!! c %"c c!%>c /cpc-- c "c !c!c%

"c!

c !/c pc c c c $ c %

"c c " c c c c c c c !c c% cc c% /c

3.5) Systems Training System : c c c -c " c $ c % c "c c - c !c c c c c c %" % #c % c #c "c ! #c c ! c - #c c! /c cccc$c"c %c$ c c c!c c "c /c"c%c c$ c"c#c$ " c%- % c /c Technology System: c c c c c c ) "

"c $ c c !!c c c c c c c c % /c pc c c )"c + - #c c c $c E c "c #c c c c c !c

>c c c c /c

cccccccccc c c c c c c c % % c c !c % ""c %c C+< +Dc c %? c !$ c c !c !c % " c %%c c c " c c -% /cc Recruitment & Selection System: c c!c % cc c"?cc c!%c!c c 1 c @c /c c c !$c c % c @c c c c c %%c!$ ccc c/c Systems and Procedures: c %cc cc cc$ c - c ) c c %! c "c c c $ c "c c /c $ c %"c c - c $ c -9"c !c c c c %#c ?c !c c c c c "c % #c %!c !c % c "c - c #c ?c !c "c c c " c !c !%#c c % % c !c " c $$c %c c c c -c !c ,,c % c c @c %"c !c c c "c !c " cc /c

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c

3.6) Staff c c c %- c c c c E c c !c c %c c !c "$ c !c c c c c % c %c c !c !c c %c - % c %"c >c !!/c c c c% cc$c % c!cEc c c%"cc %

/c "c@c, - % c c c c

c c ! c c c % c !c c $c "c " c c " #c c c *4c "c "c c c - c " c @c c !c c /c c c c c!c$ " #cc@cc - % c!c c %

/

3.7) Shared values Uc p%- c% c ccc@c %)c% /c Uc p c% c!c !%"c cc % c $c !%"c /c Uc c - c% cc-c %c$c! /c Uc c - c c % c c c !c c %

c " c "c Cp c @c

1 Dcc c ,c% /c Uc c %- c c $c -% c c c c " c $ ! c % c c c pc /c Uc c " c %

cc c$ " cc!%cc c-c- c c cc " c c c "? cc c/c Uc c " c %

c!c% % c!c!! c"" cc cccc$/c Uc c$"c$cc%- cc c c-- c"c c !% c!c c - c !c !c Jc !c !c % Kc Cc p Dc c % % "c Ec %" % c %c E % c !c c c !c c c c c c p+9p+c (''*0&'''c c c c

&6c c

c

4) SWOT ANALYSIS cc c - cccc!! c!c - ccc!!cc c cc %-c!c cc" #c%c!c c!c-"#c-"c cc c cc

cc - cc c!c %c%"c c /c

Strengths Uc pcc c!cccpcc - c cp )c c $c Uc pcc c !ccc - c

c$ cp+c !c !c-"c cc !c !% c!c c!c% ccpc"c$ c!! "c "cc+ - c Uc pc c c4'53c cc ccc!c c!c&'*'/c Uc pc c c %1%%c % c !c c c %"c c c ? c c %%"ccc% c c&'''c!c %cc3(6c c Uc *(;(c c!c cccp cc c"cCp Dc - cc Uc $ c">c - c c "c- cc&'(*c!cc c Uc

c c c!ccc c c$ c c% c c+ % cC +Dc cc c<c! cC<Dcc! c

Uc cc!! c c"c+ - #c c"c+ - #cpc"c + - ccc@c+ c c+ - /c

c c

Weakness Uc +ccc%c!c cc"c %c Uc E c"c"%c ccc!c%c $c % c@c " c Uc . c c %c Uc +!!c c% cc" c cc c $c- c Uc +c5 ccc c? cc"c c

&(c c

c

c

Opportunities Uc c%- cc%c!#cc c ccc
Threats Uc % c!c- c#c "c c% c Uc pc!c $c " cc c $cc$ c " c! c Uc p-- c c c@c- c% c c - c Uc

c!c%c " c@c"c %c!%cc

Uc 7 c !! c c %#c$ c c$c"c c $c- cc c% c Uc c!c c- cc- c&5 c!c c c

c

c

4'c c

c

5) FINANCIAL STATEMENT ANALYSIS cc c!c c c+

cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccC c:Dcc >c

c c

c c

c c

c c

c c

*'c

'(c

'6c

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'3c

';c

c+cCDc

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45/3;c

4&/:3c

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c

c

,- c c c

*'c

6c

6c

:c

3/3c

;/;c

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:4/((c

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44/&(c

44/*;c

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&3/:c

*4/::c

*'/6(c

(/3*c

**/3c

*4/6&c

*&/6*c

cc

cc

cc

cc

cc

cc

Per share ratios

Profitability ratios c!c%"cCBDc

Leverage ratios c 9 Ec

*6/:*c

*6/3&c

*6/;:c

*:/;;c

*3/35c

*3/*:c

<1 c c- cc

5/3;c

5/'6c

4/3;c

&/6;c

;/&(c

;/&3c

cc

cc

cc

cc

cc

Liquidity ratios cc

/'*c

'/4c

'/*(c

'/&;c

'/4&c

'/45c

8cc

&3/(6c

**/&(c

(/*:c

(/5(c

*'/*(c

(/53c

cc

cc

cc

cc

cc

Payout ratios ,- cccC c!Dc

*;/66c

*6/;*c

&5/;4c

&4/34c

&&/(:c

&4/'6c

"c cc

65/*'c

6*/56c

:;/5;c

:3/43c

::/'&c

:3/(*c

c c c

4*c c

c

Interpretation of the above ratios: pccc- c$ !cc !c!c% "c !% c!cc"?/c $c c% c !c cc cc? c c !% c!ccc- c cc3c /c<#c >c c% c 9c c c/c 1) Earnings Per Share0c C c !c ! c 1c c ! c - 9/c Ec ).c c c c c %c !% c!c c Acc cc%c!! cc c!c- c /c c - c c c c - c c - c c c - $c c c c !c c

c "cc c ccc c $cc c!c*:&/4Bc- c cc1c /c c 2) Dividend per share0c,- c c c c!c!c c%"c c c c c /c c- c c

c "c!%c/c;)*'/cpc c $cc c!c6*/*6Bc- c c c3c /c c 3) Net Profit Margin0c C c !c ! c p c c 19+ DM*''. c c "c % cc 1 c c" c!c%c!c!c ! c1#c cc /c c- c c cc c #c%c cc cc c@cc c!1 cc cc cc c c c cc/c c c

cc c!c:/5Bc- c c c cc 4) Debt-Equity Ratio0c Cc , 9+ c <D/c pc c c c $

c c!cc c$ c!c c /c

c&0*cc c%c c!c!"c #c " cc!c40*c%c c % c!cc - c /cpc cc " c%cc c cc c c /c c- c $cc "c c- c c cc>c c c cc- c"#c "c c ccc c % /c

6) Fixed Asset Turn Over Ratio0c C+ 9<1 c ). p>c c !!c c c c ? c c c c- c c cc c/c c c-cc c- c$ c%c c c c % c !c c c c c c c c c !c c c c c c/cc c

4&c c

c 7) Current Ratio: ( c #c c @c - 9 c c @c -D/ c c c*/440*cc c%%%c c - c!c-"c$"cc< /c c % c c- c!c c%/c c- c $c c cc c

c "c "-"cc- c"#cc c c

cc cc c c c&''(c$ c%c c c c " c c #ccc$ c c- % c / c 8) Quick Ratio0c C c

#c c @c

- )p- 9 c c @c

-)c- !D. p>cc % cc ccc % c- ccEc !c c%/cpcc% c c%>ccc%

cc% >c"/c c 9) Dividend Pay Out Ratio0cC,- c+ 9"c c+ D/c cc c c#cc c- c c " cc cc /c c c

cc c cc c#c %c cc$c!cc " cc c "c/c c 10) Earnings Retention Ratio0c c c - c c %"c c c c c c c c " c /c c%c c%c c cc! c 1cc!c c %cc c- % c /c c c c c c c c c c c c c c c 44c c

c c c c c c c

c cc c 45c c

c

1) EXECUTIVE SUMMARY )< cc % ""ccc$ !c% c!c- c -cc c $c %/c pc p#c %)< c c c % c c + !c c c C+ Dc )c c " c "%% #c % c c -"c c c !! - c % %c !c -"c !c - c c c c /c pc c pc 1c %c c N%c c %"c !% N#c Nc c Nc c N %c $ c Nc - c

c c c c ! c %)! c % /c c c c " c c $c #c - c % #c %! c c c c % c c #c c c % c !c c !c "c c c - #c c %- c c c c c !c c !% c c c "c !c %c #c %! c c c c "$c c c c !c c c !c $c c c c /c cpc c c pc c c - c c c c !c ! c c c p#c "c !%c !"c %! #c $"c c

c !c #c c !c %! c c %c c #c -cc"$ c!c%! c#c cc #c%c c "c #c c #c p%c c - c -#c #c " #c ! c c /c $ c c !c c c c - /c pc - c 1 c c >c !c c %! c c c c % c c c c c c !c <c p#c $ c >cc!ccc=c % c# c % c /c c c c c c c c c c c c c c 4;c c

c

2) MICROFINANCE INTRODUCTION c !c$ c #c c c c!c #c

c !ccc - cc c #c? c %cc c % - c"c/c
cc!c c"cc - c- /cc ! cc - c c$)% ccc% c$c0c cC*Dc-"c$"cccc Acc cC&Dc p!"c c c % c c !$c c %" c "c c "c !#c "#c #cc Accc C4Dc "c c %c%c!c c cc #c !#ccc /ccc - #c c -"c c - c c c c !! c c c c % c c c 3'Bcc*''Bcc #c%! c - c c$ c!%c %"c ccc cc$ c 1 c- /ccc
c &;Bc c 4;Bc c c
" c !c c c c " c % c c $ c c %c !c "c c - /c c c !c c - c c - c -c c c c %c !c %-"c - c c " c c -c !c c !c % #c c cc-"c!cc%"cc%c% "/cc c " c - c !c c - c
- % c - c c c "%#c c - c c c -c !c "c c!c !c) "#cc % c c - c c$ cc"?cc % c %cc % - cc-"c c - /cc c " c !c - c c c %! c c "c "#c -c c "#c c-c!c-"cc #cc"#cc"c c - % c - /c . - c c !%c!c-c $ - #c c- "c"c c! c c cc c-c!c%! cc c c!cc- /c

43c c

c

3) MICROFINANCE DEFINITIONS/cc "ccRobinson, Marguerite/

³Microfinance refers to small-scale financial services for both credits and deposits ² that are provided to people who farm or fish or herd; operate small or microenterprises where goods are produced, recycled, repaired, or traded; provide services; work for wages or commissions; gain income from renting out small amounts of land, vehicles, draft animals, or machinery and tools; and to other individuals and local groups in developing countries, in both rural and urban areas´c c "ccInternational Labor Organizationc(ILO),

³Microfinance is an economic development approach that involves providing financial services through institutions to low income clients´. c c Task Force on Supportive Policy and Regulatory Framework for Microfinancec c "" cc$"c !c!c%! cc

"Provision of thrift, credit and other financial services and products of very small amounts to the poor in rural, semi-urban or urban areas for enabling them to raise their income levels and improve living standards". c . c 1- c - "c c #c c c % c c ""c $ c !%c )%c " ccc%c" /c c"cc c " c!cc)!c - /c c

% c!cc c%
-" /c c c

4:c c

c NMicrofinance institutionsc C
c " 0c i). Not-for-Profit MFIs + c " c c+ c "c #c*63'cc%c+ c c cc " c c cpcc #c*66&c )!c% c " c c+ c&;c!c c% c #c*(;3c ii). Mutual Benefit MFIs + c c - c c c - c c c - c+ cC +Dc iii). For-Profit MFIs c"c<c% cC<Dc " c c c% c #c*(;3c c$ c- c
³Microfinance is the provision of a broad range of financial services such as deposits, loans, payment services, money transfers, and insurance to poor and low-income households and, their microenterprises´. c ! c - c c- cc

c c!c 0c Uc !%c#c ccccc - Ac Uc %!%c#c cc"- % c"?Acc Uc p!%c c cc% c cc

/c pc %! c c ! c c c %! c - c - c c c !%c c %!%c/c

46c c

c

4) ACTIVITIES/ PRODUCTS/SERVICES IN MICROFINANCE c

Micro credit: pccc%c%c!c% c ccc ccccc c/c c cc c!! #c! c$ c #ccc-cc " c"c "/c/"/c " c2 #c + #c c c

Micro savings: c c c - c c$c cc- c%c%c!c% c!c! c /c! c $ c %%%c c E % #c c -"c c $c c c - c c cc%

c 1 c 1 ccc!c! c 1 /c/"/ccc

Micro insurance: pccc %cc$ c #c cc c"?c% cc% cc c/c c c c c c c c % c c - "c c c $ c %""c cc!! "c #c cc ccc$/c/"/c c !c #c% #c E% #c%c c

Remittances: c c! c!c!c!%c cc c cc cc #ccc c c!%cc! /c% c$ c c c!cc cc! c "cc c cc %c% #c % c cc - c c c!c!/c c c c c c

4(c c

c

5) HISTORY/ORIGIN OF MICROFINANCE care 3 main factors ccc c""cc!c ! cccccpc c */ c !c !c c -c - c $c pc >c c ?c - c c c *(3(c $ c E c %% c c c c c c "c c *;/&Bc c c cc ccpc $

c*(:4cc*(6;/cc c &/c c c c c c c c c "!c %c c c -c !c p>c "cc!c %cc cp " cc, - % c"%cCp,Dc cc *(:6cc " cc cc c% c!c"cp>cc- />cc c 4/c c c %c - c $ c % c c !c c "c %c c pc $c c ?c !c p>c !c %c c c *(('c ? c c c c !c c % cc!cc !%c cc c - cc!cpcCpD/c c c %cc c!c"cc$c % ?"cc% cE!"c E % #c " c #c %"#c /#c c c c c " c c !c c c c "c$c!%c c!%c"c /c ccc 1 c c cc 1c !c c $c $c c "c c c "c -% c !c c c %

c " c c c c c -"#c $ c - c c c -c !c "c ccc!c c /c c c% c% #cc$cc c!c %c c $c c c !c c c 4''c %c )c - c !c c )cc %c c c !c !c c /c c c!cc - c% %c!c "cc c!c - c

c!c cc$c c %"c% - /c c c -c!c% c%! cc c c$ c c"c!c %

ccc c c *(:3c c " c c c c !c c *(64c c - % c "/c ,/ %% c c$c$cc c

c!c #c c c c ! c!c % c %! /c cc c % c$c cc- c c$/c c 5'c c

c

6) DEMAND FOR MICROFINANCE SERVICES , ccc" c? ccc!cc*'''c%#cp c ,cc%"c cc*;c

% c !c c $/c $ - #c c 4''c %c c c c 3'c %c #c c-"c $c c- c /cpcc! c % c c!c c #ccc&'Bc - c cc c !%c c !%c cc c6'Bc cc c cc c /c #c c "% c!c ccc- c c- c ccc c " c c c!c cc c!%c!ccc cc - c"c cc c!%c !c % c - #c"c-"c - /ccc pc$c!c ccc$c% c #c - c!c9cc - c4cc !c

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13) SUCCESS FACTORS OF MICROFINANCE IN INDIA - c c c c #c !c 1 c c -"c ! c c %c c c c c % c c c c c c #c c $ c c "- c c c c c c - c c c c % c !c c - c c c % c c #c c c c c c c c c

c c c c % cc /cc%%c#cc cc"cc-"cc cc"cc c$c - c $c c cc% ccccc c! cc!cc$ ccc !cc c #cc%"c%! c c!c c%c !! - c- c "c " /cc A. For NGOs: 1)c c c E c!c%! cc%#c cc 1c c #cc cC - c c Dc % c c >c c c " #c ! c !c E c $c c c c % c cc $c c cc c- cc% /c c 2)c+c cAc cc%! cccc-c!#cc"c c ,#c +p,p#cc <..#c c =#c c #c c 7#c -c c ! c "%% c c c cp< ,#ccF,#c.cccccc, % cc!ccp cc, - % #ccF=#cccc c%% cc#cc c" c /ccp cc c$$ c!cc%! #c c cc - c

c!"c%! c /c c 3)c c c c c c #c Ec c " c % c !c %"c ! c!c%! c c c%c!c cc c /cc c 4Dc c c!c% % "c%! c c% /c c%c%%c c!$ cc c c %c !c + /c c pc c %c % c c c c >c c -- /c #c 1 c c cc

cc+ c "c$ c c$c-"/c c c c - c c c --"c !c !%c c c c - c c $c c !c !% cc$/cc c 5)c<#cc%c #c %! c c c$cc!c /c c !c c % %))" c c c c c c c c c !c !c ) "#c !c 1% c !%cc +p,p#cc cc cc cc cccc cccccc cc!cc - cc ccc #c " c% - cc "c!!)) cc!"/c 3*c c

c B. For Financial Institutions and banks: c - c - c-" c- c#c%c "ccc c 1)c c!! c#c #cc c!cc c #cc #c- ccc %! c /c c 2)c c c c ccc%

ccc c" /c c 3)c%cc cc "cc#c
1cc cccc cccc!cccc

cccc #cccc cc cc!c"c c c!c - c c!cc /cc c 6) c - c c ! #c "c c " c $c !c #c !%c $ c c

1cc ccccc% c!c%! c /c c 7)c c - c$ ) c ccc%- cc"c %cc

cc!cc" c% c!c/cc c 8)c c$ c c!c- cc cc " cc"- c #c ) !! - #cc!#cc!c$ c cc/c c 9)c c c - c c$c c!c!cC cc EcD#c ccc - c c cc cccc cCcc D/c c 3&c c

c COMPARITIVE ANALYSIS OF MICROFINANCIAL SERVICES OFFERED TO THE POORcccccccccccccccccccccccccccccccccccccccccccccccccccccC c*3Dc Parameter

Money lender

Commercial

Govt sponsored

Financial

bank

bank

products of MFIs

Ease of access Transaction

" c

$c

$c

" c

$c

7 c " c

7 c " c

" )% %c

7 c c

1 % c"c

1 % c"c

+ c

<1 cc"c

<1 cc c

<1 cc c

< 1 c

1c " c

$cc- c

$c#c!! c

cc

!! c

c? c

!! c

ccc

ccc

+ %c!c cc

c

c

c

1 % c% c

1 % c% c

+% ccEc

%"cc

%"cc

% c

% c

cost of access Lead time for loan Repayment terms Interest rates Repeat

c

borrowings Loan access

7 cEc

procedures Loan

p!%cc

1 - cc

1 - cc

+% cc

application

1- c

% 1c

% 1c

!%c

%c

E cc

c E c

c E cc

demand

c!c

" cc " c

cc c

promissory

c%c!! c

c c c

!c c

procedure Collateral and

% c%c c

notes incentives

c

c

c

cc" c #c c c

c

34c c

c

14) INDIAN MICROFINANCE AT GLOBAL CONTEXT pc %! c $ c c !c c " c "$ c c "c c &''&#c c % " c c c!c c%cc#c%% c- #cc!c /c "c cc pc% c#cpc c c!c c$ c- " cc? c!ccG*;'cc$ cc c$ c cc!c!c&*/&B/cc c%cc? c% c$ c c$c c c !cc ccc!cpc
cc" c! c!cc %"c ccc - c- /cpcc$ c c"#cpc
c cc c %!c - "c#ccc "c c!cc cc c C D/c c c " " c pc c c !! c c c c !c c " c " /c
c5')3;B/c cc c c !! cc c!c cpc%! cccc"c c c !c % $c "c $ c "$ c c c c c $$c c c!$c!c!c$ c "- c!! c"$ cc%! cc c% cc c $/cc c % c !)cc"c!c c"c %c-cc c !c c /c - #c cpc !c %ccc$ c c % cc ") %c ! c c c c " c c $c - % c /c . c c "c - " c !c % c - % c c %! c - c c 3;B#c - c ('Bc !c c !"c c pc % c " c% c #c " " "c! cc c "c c% cc

1 c!c " c! c"$ cc /ccc c

c

c c c c c c c c c 35c c

c

15) IMPACT OF MICROFINANCE c 1) Microfinance Enhances Choices Available to the Poor ! c c c c c c - c c c E c c - c #c c cc% #cc c c c ccc$"/c c c 2) Microfinance can Help Clients in Coping with Vulnerable Situations "c !c #c $c - c c % c -"c c c "c " c !c c /c - #c pc c c %c - c C c $ c "c % c #c $% c c #c 1"c Dc $ c c c c $ /c + c - c c c%c"" cc c %$ % #c

"c c !c c -c "$ #c %c -#c )%"c c c cc c%%/cc c 4) Microfinance Helps in Reducing Clientås Dependence on Money LenderscC " c c!c c c Dcc pc %c $ c ) #c ! $ c c c c $"c %c c !%c " c c !%c /c - #c ) c !c >c c c $c !%c % c c!c" c%cC!c 1% #c

cc%

c%" c"Dc c !c %c

c " c C!c 1% #c

c !c % c D/c ! #c c !#c cc c c c cc c %c!c% /c cc% c - c!c c - #c c%! c%cc!c c!%c% c "#c!c c

cc c c %)#cc$cc c"cc c% c /ccc c 5) Impact on poverty c c c !! c!c%! #cc$ c c c!! cc%- c cc !c- cc /ccc c cc "c- c!c% c #ccc!c/cccc c 3;c c

c

16) ISSUES RELATED TO MICROFINANCE +% c!c c%c c c c $0ccc 1) Borrower Unfriendly Products and Procedures . cc %c!c c% c "c #ccc %c!c %c

"c%c ccc %c!c %c E"c " c% c c c #c cc cc "c cc/ccc c 2) Inflexibility and Delay c c"c %cc c ccc!c% c c!c c$ cc )%- c %cc c! c/cccc c 3) High Transaction Costs, both Legitimate and Illegal " c c c c!! cc c$ cc " #c cccc %c!c c% c!ccc c% #c c% cc c! c /cc c "c " cc c c cc "c cc!c$"#c c%"cc c- cc c$ /ccc c

c

4) Social Obligation and not a Business Opportunity c )! c c c

c

c ccc"c c c c c c /ccc c 5) Legal and Regulatory Framework c % c !

c c !% c c c c

c $c c c ? c /c c - c ccc- #c c c$"cc c c#cc c%- c c !c -"c %c c " /c c %c c - c

c c c c c !c "c c " #c %"c c %c c c %c c /c c c % %c c !

c c c c c #c !!c c - c c - c c $c c "- c c /c c c

c c c %c c - c c "c c c #c c c

- c c!cc ccc %cc - c) - ccc c cc 1 c c c c "- % /c c c !c c $c $c " c c c c c c

c c %c!c c$ c/ccc c 33c c

c 6) Problems for Alternative Micro-Finance Institutions c %c %c $ c $ c c - c
c c %cc/c c-c%c!c %c ccc c!c" "c cc !c #c c 1"c c !c % %c !"c c c c +p,pc c ,cc - c!c cc c!"c - #c c =cc<..#cc c !c c #c c c % c + /c c c #c c " c - c c c c - c %c " c c!c /c c%c %c! cc cc 0c c 6.1) Inappropriate Legal Forms c - c %)! c c c c c c c c !c " c c c ccc %! c c c ") %c c /c p!c c c - c c c!c c!c "c c %c ! c - /c c >c - c Ec c c p!c c c c c cc!c c% c!%c "c-#c c- c c**cC5Dc!c cp% c 1c

c c c c c c c c + )*&/c c c - c c

? cc%c!c c c ccc c!%c!cc!cc
c c- cc$cc$ c cc"#c%c!c c c
c 6.3) Lack of Proper Governance and Accountability

- ccc c% cc c!c)!cc

cc c%- /c c c%c c% c$ c!c c!c cc c!c! /c c c c c % c" cccc%"cc! $c /ccc c 6.4) Isolated and Scattered c
36c c

c

17) MICROFINANCE AT CANARA BANK c <c+ c c % c c" c c?cccccc c c c ""c!c c!c c !%/c $ - #c - ccc-c "% c!c c c %c- cc 1 c!%c c c@c - c- cc c !c /c cc c c ccc ? cc c c c c c 1c c c c - c c %!c c c c E c

%c /c c c cc c!c""c c-" #c - cc c" c!%c c$ c c!c c cc c!cc c !!ccc c c c c "% c !c c c c "c c c - c c !c c - c "cc - c%% /cc c c - c !c % c c c <c + - #c % c c c % c c % c ! #c -"#c c c p c - c c !! c c c c $ c c c c

1 c $c c %c c !c /c <c c c " c c 1 c c

%c !

%c " c c "c c c c !c %c - c c

"c!cc c c"c!cc- c"$ /cc c c c c "$c c c - c "c c c "c !%% c $ c $ c - c 4'53c ccc c!c- c/c5#c''#'''c /c cc c c cc c cc - c cc #c - c c%%c%#cc c - c$- cc " cc c!cc c!c cc% c/ cc cccc!cc*(;&cc c -"ccc c cc #c$#cc"

"c /c c c "cc+ % c!c $ c % c !% c c *(;3/<"c " c c

c c c c c % %c -c c c *(3'/ c !c c !c c + c c c c c c + % cc*(:6c c

"c !!cc+ !c c c c" cc*(('cc c c c % c c c c c !c c + !c c c c $c + !c !c c - cc c!c"c c%"c@c c!% #c #c+ !)c % c$% c

c/$#c c + c-"ccCc<cDc+ % cc

c cc+ % /c c 3(c c

c

Canara Bank±s Initiatives c< c!c!cc)ccc4*/'4/&''(cc , c "0ccccccccccccccccccccccc(;5('c 9c)c3&3;;c /cc " >c c<0cc&6:&'c 9cc&'63*c /c " >c
¬ ¬ ¬¬¬ * *+ !

* *" $ ~

~ * *" $~ * *+ ~ !!

c Figure 8

c c c c c c c c c c :'c c

c c< c!c!cc)ccc4*/'4/&'*'cc cc , c "0cccccccccccccccccccccc(;&('c 9cIccc3654;cc /cc " >c c<0c&6346c 9cIccc&*'(4c /c " >c
¬ ¬ ¬¬¬ ¬ * *,+

* *," $ ~

a ~ * *," $~ * *,+ a ~ !

c Figure 9

cc Analysis: pcc c

c c c cc>c cc!c c&''(cc% c " c c "// /c55Bc % c " c c !cc;5Bc % c " c
:*c c

c Canara Bank lending to priority sector cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc

!

!

!!

- 1 - 1 - 1

! ~ ~~ ~ ./ .+0~ - ~

%cc c c

Figure 10

Analysis: <%c c - c " c c c c c ? c c c - c c c c c

c "c cc cc c"$ cc4:/&6Bc!%c&'':)'6cc&''()*'#cc% c$c c !ccc"c ccc c c $cc c!c4(/&'cBcc$ c- cc + c c

c c:3/'5Bc!%c c&'':)'6cc&''()*'cccc+ c- c c $cc c!c3:/'3Bc!%c&'':)'6cc&''()*'cc c%! c!/c ccc c % c cc cc cc c 1"cc%"c !cc c c

1) Cansaral Savings Account/ No-Frill Account c ccc!c-"cc cc c% c$ c? c #ccc c c $ ccc c!cc&;Ac c!c cc% cc c!c-"cc/c c c - c$ c!

c c%c, cc!#c!

c cc% c"#c E cc !c /c cc c>c

c% c cc;'#'''cc cc cc c cc c 1 cc 1

ccc*#''#'''/cc :&c c

c

2) General Credit Card Schemec pccc- cc c!

c cc9 %cc c$ c cc c c c c c !c c /c pc c c c !c c " c c "c %/c pc c c c E%c c c ;'Bc !c c !c c c % c !c c c c ccc%1%%c!cc&;#'''c c ! ~* - 1

!

~ ~+

~ ~+ !

!

%

%%.

c Figure 11

c Analysis: c%- c% c!ccc c $cc465Bc c!%c c!c c &''6)'(c c &''()*'c c c % c !c c c c

c c *(5/6Bc !%c c !c c&''6)'(cc&''()*'/c c c!c c"$ c$c"" - c% "ccc c- " c!c% cc% c c c c % /c c

3) Scheme for Prepayment of Debts of Urban poor from Non-institutional Sources c !c c c c c $ c - c c c c c c !%c )c cc ccE%cc*;'Bc!c c"c% c ccc%1%%c!cc;'#'''c c % c %cc% cc;c$ c /c :4c c

c

4) Differential Rate of Interest (DIR) Schemec cc c c c$"ccc %cc!cc "9 c-c c c-c % c c " /c cc cc % ccc$ c- cc c 5Bc % c /c c % c - c c !c c %c !c c *;#'''c 1 c "c cc "cccc 1 c!cc&'#'''cc c% % c!c+9+c$ c!!c c,pc %/c<c" "c cc c!%c% c c cc*6#'''cc ccc ccc &5#'''cccc %cc /c ,pc % cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccC c*:Dc "c

>':c

c

/!c

,pc

>'6c %c

/!c

>'(c %c

>*'c

/!c9c

9c

C Dc

9c

C Dc

*44'6c

3;c

*;(:5c

5'c

%c

*:444c

/!c

%c

C Dc

9c

C Dc

56c

&:*66c

;'c

c !

!

!

" ~ '2*(

!

!

!

+,

+,

+,

+,

c Figure 12

Analysis: c% c!cc c,pc % c c $cc cc*'5/&Bcc >':cc >*'c% c c c- c c c % cc"c"" - c% "cc "c $ c%"c c / :5c c

c

5) Scheme for Redemption of Debts of Farmers from Non-institutional sources pc%c ccc c c c- cc c!% c!%ccc ccc c - c c !% c !%c c c !%c )c c c c c E%c %1%%c !c c c ;'#'''c c c *;'c Bc!c c "c c % #c c c % c $ c;ccE 9 !c 9 c% / ccccc, c+$"c+ % c cccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccC c*6Dc "c

>'(c

c

c!c9c

, c$"c

*'55:

>*'c %cCc Dc

/!c9c

5:/3*

*'553

%cCc Dc 5*/44

+ %

c

" ~

3'2*(

+,

+,

c Figure 13

c Analysis: c % c !c c !%c >'(c c >*'c c %c % /c c c c

c c "!c " c c c %c c $c c " c c !c *4/*(Bc !%c c !c c

"c >'(cc c>*'/c :;c c

c

6) Canara Grameena Vikash Vahini c c- cc %

c7c7 c7 c c;'c ccc c /c c - c!c c- ccc c$ cc ccc"c ! c%"c cc cc c cc cc "c"%% c c c!

cc c c % cc E % c!c-" /cc c- cc- c$ c % c- "c c % c!c c#c c!%c!c "cNc!Ncc c c/cc c" c 1 c!! c!c ccc c!!c$ c c $ c - c $ c c % c !c c c c

c !c c c c c %"c c- cc % c c!%cc c$ /cc c

7) Financially Literacy Books c c % c c $ c $c #c !c !c c c #c c " c c =/cc c c c% cc cc +-" /ccc c c c% c- c c cc c " c c c#c cc!% c/c

8) Financial Inclusion and Credit Counseling Centre cc c c!c cc c "c cC<Dcc

c ccc ,#c% c "#c=cc cc=c / c

9) Smart Card Technology cc c c+%cc "cc$c-" c c" c!c!c/

10) Bank has signed MOU with Govt. of Karnatakac!c% % "c+%cc !c % c!c - % c !#c c +c$" c% ccc+c+ c cc

cc% #c #c "cc "/c

11) Bio metric Voice enabled ATMs c cc c cc c7 c c cc c9+ %cc#cc

c - c c c cc - c cc c c/cccc% c c c cc+%cc cc c cc " c cc% c /cc :3c c

c

12) Bio metric Voice enabled Mobile ATM cc% "c- #cc cc c cc"c c c!cc c c!c c % /c c c c c c 7 c $ c % c c !/c c % c c c c " c !c -"c

c !c c c c !c c $ c c c

% /c c 7 c c %- c c c c " c c c c ) % c /c c c c cc% cc c/cc c!%c c c !#c c % c7cc -"c% cc$ c cc c c- cc% 9 c c-cc!c c/c c

13) Canara Bank Training Institute for Micro finance, Sonnahallipura Training p $c c c c *((4#c c c E c /cc pc c "" c c "c + c c %"c c %c! c /cc c c cc c c*'5:&c / c

14) Farmers training Cells . c c - c c " c c =$ " c c !c !%"c %%c $ c c cc % "c#ccc c cc<% c"c cC<Dc " c c c c c c , - % c #c $ c c c " c + !c %% c"cp cc c/c c<% c"c c#c "cc c %c - c c c !c "c "%% c c c ! c !c " c c c - #c #c "c ! c "%% #c ! c 1 c -c c " - c !% c #c %#c!% c%

c#!% c#cc") %cc /c c$c - c!c <c c c "cc c" cc c!% /cc c

15) Canara Nayee Disha c c c cc $c % c cNc

c, cJc""cc c 1"c

" c c % c c c% #c!c!c

"c c c c c!c !c/c c c c % #c cc c" c&'Bc!c c c$ c$ c " cc c"c!#ccc"cc!cc #c!c-"c c

::c c

c c-cc " c"c% %/cpcc c -c!c ccc- c c !cc4/;'c c cc c 1 c!c/:;'c #c c c $c % /c c

16) Krishi Mitra Card scheme pc cc - cc- c c cc-c c!% #cc

#c c c

c!c-c!c#c% c!c!%cc% #c % c!c% cc %c c!c$ ccE%cc%1%%c!c/c;'#'''c cc- c!c c /c c - " c cc= c cc cccccccccccccccccccccccccccccccccccccccccccccccccccC c*(Dc "c c

>':c /!c

= c c

>'6c %c

/!c

9c

C Dc

::&c

&/66c

9c

>'(c %c

C Dc

*;*3c

4/(5c

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>*'c %c

/!c

%c

9c

C Dc

9c

C Dc

&&&4c

:/&6c

*(*:c

*5/56c

c

c !

!

!

~ !

2*

+4

+4

+4

+4

c Figure 14

c Analysis: c % c !c c c = c c c c

c c !%c c !c c

"c >':cc >*'cc*56Bcc c%c - c

c cc5'&Bc!%c >':c c >*'c c $c c "" - c % "c c c c ! c c c !c c %! c c c&''3/c :6c c

c

17) Scheme for Self Help Group (SHG) finance/ SHG Credit Linkage pc c c - c c c $ c c "c "c % /c F c 2 9 c c c c -"c c % /c c % c - c !c "c !c +c c $ c c #c "c %

"#c c "cc - #c% c!ccc " #c%%%c c!c 1c% c 1 c!c-"cc/cccc c"cc cc!c c "c$ c c c-"c!c c"#c cc #c%c cc c% % cc!c $c #cc - cc c ccc+ /c c%c % cc*05c!c c $ c!/cccccccccccccccccccccccccCc c&'cccDccccccccccccccccccccccccccC9ccDcccccccccccc %- c !% c

':c

'6c

'(c

*'c

c!% c

*;'&:6c

&*'55*c

&:;*''c

4*((('c

c c c

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&:;45(c

35(/3:c

(('/4:c

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c

c

c

c cC/cpcc DMc

c c ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc !

!

!

!

!

! !

~ 2

!

!

+4

+4

+4

+4

c

cc<" c*;c Analysis: c- c" c $cc" - c cc c+ c"c!% c c c

cc % c !c**&/(Bc!%c c<c "c >':cc >*'cccc c c c"c c

c cc$ c c c %c!c c c c c 35/:3cBc c% c!c !c c "c % c ':c c % c &'*'#c c c c %! c c c c c ! ccc c"" - c% "/c

:(c c

c !% c"c c ccccccccccccccccccccccccccccccccccccccccccccccccccccccccC c&*Dc !% c,"c c c

':c

'6c

'(c

*'c

c!% c

4:;':c

3'434c

353;(c

556('c

c c c

436*5c

;&*&;c

;&4;6c

;':'*c

c

!

!! !! ! !

!

+4 +4

+4 +4

~ 2

c Figure 16

Analysis: c% c!c"c!% c c

c cc*(/3Bc!%c c "c >':cc >*'c $ ccc c $cc c!c4'/;:Bc!%c c "c >'(cc >*'/c pc c !c "c c c c c c

c c c !c 4:/:&Bc !%c c "c >':cc >*'/

ccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc

19) Micro Credit Groups (MCG) linkages cccc"c "c % c c+ c$ c%1%%c% c!c% % cc% c c *'c c c c c c !c "c 9%-"c c 1"c c % c " "c -/c c % cc- c c %c!c c% % cccc%1%%c!c/&;'''9)c c!c cc%c % c c$ /cF c+ cccc c c % /c c%c 6'c c

c % c c $ c c /;''''9)c c /;'''''9)c c "/c 1%%c % c % cc3'c% /c

20) Government sponsored schemesc cccc cc c cc-cc"- % c % c cc % c c$% cc c - % cC,D#c c, - % c#c+c - % c#c+c - % c#c 9cc#cc - % c!! c cc

21)c cc cKisan Credit Card, Kisan Suvidha, Artisan Credit Card, Swarojgar Credit Card, Cantools ccc " c!c/c

22) Total Financial Inclusion Campaigns-Multi Pronged Approach cc c cc c<cpccc%)" c c c$ c c c c" c*34(c-" c cc<cpc% cc7" c$ c%"c cc c cc cc <cpc%" cc c!c cccc -" cc c!cccc %cc c cc c c - c!%cc c -" c c" cc"c - cc "c+-"cc cccCc <c Dc!c!% c c c c%c!c"c+ - /c Uc c c cc c" c1639 villagescc cc cc <cc c c-" c c c9+ %cc )c "%% /c Uc c1.74c cc!c c"c c c!c /c Uc - c19.04c c c c<cc Uc

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22) BIBLIOGRAPHY: Books *Dcc, c%cc#cF "c ! c &Dc ! c - cc cc %cc!cpc c!c "cc! c Reports , >c c!ccc&'':)'6c , >c c!ccc&''6)'(c , >c c!ccc&''()*'cc c cc, c+"c ! ccpcIc7c #c c c%cc $cc#c1c c cc c c c cc7 c+ "c cc/c+-cc Websites 099$$$//%9" 99 ,<.% /1c 099$$$//%9" 99 "/1c 099$$$//%9" 99 "/1c 099$$$//%9" 99p"/1c 099$$$//%9" 99 /1c 099$$$//%9" 997 /1c 099$$$//%9" 99+ p!%/1c 099$$$//%9" 99 $ /1c 099$$$//%9" 99+ /1c ! 099909,% B&'B&'+ "9F 9, 9%B&'! 9 B&' = B&')B&'ppB&',p/ %c ! 099909,% B&'B&'+ "9F 9, 9%B&'! 9 ! B&') B&'. #B&' B&'!

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Micro Finance in India Final

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