Microfinance

INTRODUCTION Meaning of bank A bank is an institution which deals with money and credit. It accepts deposits from the public, makes the fund available to those who need them, and helps in the remittance of money from one place to another. According to Crowther, a bank ―collects money from those who have it to spare or who are saving it out of their incomes, and lend this money to those who require it‖ Commercial banks: The commercial bank is one ―which transacts the business of banking which means accepting for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise ―. These commercial banks perform all kinds of banking business. In capitalist countries, like U.S.A, and U.K, commercial banks are usually in the private sector. In socialist countries like Russia, they are completely nationalized. In france, though it has a capitalized economy, all commercial banks are state owned. In our country banking transactions are done through branch banking Functions of commercial bank In the modern world ,banks perform such a variety of functions that it is not possible to make an all- inclusive list of their functions and services. However , some basic functions performed by the banks are discussed below. 1.Accepting Deposits The first important function of a bank is to accept deposit from those who can save but cannot profitably utilize this saving themselves. People consider it more rational to deposit their savings in a bank because by doing so they, interest, and on the one hand , avoid the danger of theft. 1

1.1fixed deposit account Money in these accounts is deposited for fixed period of time and cannot be withdrawn before the expiry of that period. The rate interest on this account is higher than that on other type of deposits. The longer the period the higher will be the rate of interest. Fixed deposit are also called time deposit or time liabilities

1.2Current deposit account These accounts are generally maintained by the traders and business men who have to make a number of payments every day. Money from these accounts can be withdrawn in as many times and in as much amount as desired by the depositors. 1.3Saving deposit account The aim of this account is to encourage and mobilize small savings of the public. Certain restrictions are imposed on the depositors regarding the number of withdrawals and the amount to be withdrawn in a given period. Cheque facility is provided to the depositors. Rate of interest paid on these deposits is law as compared to that on fixed deposits. 1.4Recurring deposit account The purpose of this account is to encourage regular savings by the public, particularly by the fixed income group, generally money in these accounts is deposited in monthly installments for a fixed period and is repaid to the depositors along with interest on maturity rate of interest on these deposits is nearly the same as on fixed deposits.

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1.5 Home safe account It is another scheme aiming at promoting saving habits among the people. Under this scheme a safe is supplied to the depositor to keep it at home and put his small savings in it. 2.Advancing of loan The second important function of a bank is advancing of loan to the public. After keeping certain cash reserves, the banks lend their deposits to the needy borrower. 2.1Money at call Such loans are very short period loans and can be called back by the banks at a very short notice of say one day to fourteen days. These loans are generally made to other banks or financial institutions. 2.2 cash credit It is a type of loan which is given to the borrower against his current assets such as shares, stocks, bonds etc. Such loans are not based on personal security. 2.3 Overdraft Some times the bank provides overdraft fecilities to its customers through which they are allowed to withdraw more than their deposits. Interest is charged from the customers on the overdrawn amount. 2.4 Discounting of bill of exchange This is another type of lending by modern banks. Through this method a holder of a bill of exchange can get it discounted by the banks.

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2.5 Term loan The banks have also started advancing medium term and long term loans. The maturity period for such loan is more than one year.

3.Credit creation A unique function of the bank is to create credit. In fact, credit creation is the natural outcome of the process of advancing loan as adopted by the banks. When a bank advances a loan to its customer, it does not lend cash but open an account in the borrowers name and credits the amount of loan to his account.

4.Promoting cheque system Banks also render a very useful medium of exchange in the form of cheques. Through a cheque, the depositor directs the bankers to make payment to the payee. 5.Agency functions Banks also perform certain agency functions for and on behalf of their customers. a. Remittance of funds- banks help their customers in transferring funds from one place to another through cheques, drafts,etc. b. Collection and payment of credit instruments- Banks collect and pay various credit instruments like cheques, bill of exchange, promissory notes, etc. c. Purchasing and sale of securities- banks under takes purchase and sale of various securities like share, stock, bond, debentures, etc, on behalf of their customers. 4

d. Collection of dividends on shares- banks collect dividends, interest on shares and debentures of their customers. e. Income tax consultancy- banks also employ income tax expert to prepare income tax returns for their customers and help them to get refund of income tax. f. Acting as trustee and executer-banks preserve the wills of their customers and execute them after their death. 6. General Utility Function In addition to agency services, the modern banks perform many general utility services as given below: 1.Locker facility- banks provide locker facility to their customers. The customers can keep their valuables and important documents in these lockers for safe custody. 2. Letter of credit- letter of credit are issued by the banks to their customers certifying their credit worthiness. Letters of credit are very useful in foreign trade. 3.Underwriting securities – banks underwrite the securities issued by the government, public or private bodies. 4.Gift cheques- some banks issue various denominations(say Rs.11,21,31,51,101,etc) to be used on auspicious occasions.

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5. Foreign exchange business- banks also deals in the business of foreign currencies. Again they may finance foreign trade by discounting foreign bill of exchange. Nationalization of banks The role of banks has undergone a revolutionary change after nationalization. The focus of banks since nationalization primarily has been on ―widening and deepening the banking system and affecting a structural a 5

structural transformation in the deployment of commercial bank credit in pursuance of the planned objectives of increasing the financial savings, amelioration of poverty, modernization of agriculture, small and cottage industries. Objectives of nationalization of commercial banks The important objective of nationalization as outlined by the prime minister, Mrs. Indira Gandhi , in the parliament on July 21 1969 are; 1. To remove control of few large industrial houses over banks. 2. To provide adequate credit to the hitherto neglected sectors as, agriculture, small industries, weaker sections, professionals etc. 3. To introduce professional management in banking business. 4. To provide incentives and stimulus to new entrepreneurs. 5. T o provide adequate training and reasonable service conditions for bank employs 6. To eliminate the use of bank- credit for speculative and, un productive purposes. 7 To mobilize savings of people to the largest possible extent 8 To ensure that the operations of the banking system are guided by a large social purpose

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Reforms of banking services. As back as in July 1983 , the Reserve Bank of India a committee to draw a phased programme for the banking industry keeping in mind its future expansion the committee comprised of eleven members with Dr C. Rangarajan, Dy. Governor of RBI , as its chairman. In the pursuance of the recommendation of the committee, the RBI IN 1984, issued detailed guidelines for mechanization of banking services. However nothing much could be achieved in this direction due to lack of infrastructure facilities and opposition from the bank employees unions. In March 1987 the Indian Bank Association and bank employees unions entered in to an agreement whereby public sector banks were allowed to install 5480 advance ledger posting machines at their branches. As on the same date, banks have also installed 218 mini-computers at their regional offices MICROFINANCE According to International Labor Organization (ILO), ―Microfinance is an economic development approach that involves providing financial services through institutions to low income clients‖. In India, Microfinance has been defined by ―The National Microfinance Taskforce, 1999‖ as ―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‖. "The poor stay poor, not because they are lazy but because they have no access to capital. "Microfinance is the supply of loans, savings, and other basic financial services to the poor." As these financial services usually involve small amounts of money - small loans, small savings, etc. - the term "microfinance" helps to differentiate these services from those which formal banks provide 7

It's easy to imagine poor people don't need financial services, but when you think about it they are using these services already, although they might look a little different. "Poor people save all the time, although mostly in informal ways. They invest in assets such as gold, jewelry, domestic animals, building materials, and things that can be easily exchanged for cash. They may set aside corn from their harvest to sell at a later date. They bury cash in the garden or stash it under the mattress. They participate in informal savings groups where everyone contributes a small amount of cash each day, week, or month, and is successively awarded the pot on a rotating basis. Some of these groups allow members to borrow from the pot as well. The poor also give their money to neighbors to hold or pay local cash collectors to keep it safe. "However widely used, informal savings mechanisms have serious limitations. It is not possible, for example, to cut a leg off a goat when the family suddenly needs a small amount of cash. In-kind savings are subject to fluctuations in commodity prices, destruction by insects, fire, thieves, or illness (in the case of livestock). Informal rotating savings groups tend to be small and rotate limited amounts of money. Moreover, these groups often require rigid amounts of money at set intervals and do not react to changes in their members' ability to save. Perhaps most importantly, the poor are more likely to lose their money through fraud or mismanagement in informal savings arrangements than are depositors in formal financial institutions. ―Poor rarely access services through the formal financial sector. They address their need for financial services through a variety of financial relationships, mostly informal."

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OBJECTIVE OF THE STUDY 1. To analyses the rating giving by the responding in connection with microfinance 2. To analyses the benefit of microfinance in respect of the opinion of the respondent 3. To study the factors affecting the selection of bank by the people in micro finance activities 4. To study the benefit of micro finance to people 5. to study the preferred bank by the people with respect to micro finance activity

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Microfinance in India: A New Regulatory Structure

The Indian microfinance sector witnessed tremendous growth over the last five years, during which institutions were subject to little regulation. Some microfinance institutions were subject to prudential requirements; however no regulation addressed lending practices, pricing, or operations. The combination of minimal regulation and rapid sector growth led to an environment where customers were increasingly dissatisfied with microfinance services, culminating in the Andhra Pradesh crisis in the fall of 2010. Leading up to the Andhra Pradesh crisis, microfinance institutions were experiencing a large influx of equity and debt investment. Some institutions were doubling their size each year, aiming to reach more customers and serve more areas. As institutions scaled up quickly, hiring and training processes were less thorough, resulting in employees who engaged in inappropriate collection practices and lending models that led to customer over-indebtedness. In August 2010, SKS Microfinance held the first initial public offering (IPO) for a microfinance institution in India, raising USD 347 million1 and drawing attention to the potential profits of the sector. Media reports took different viewpoints on the IPO, some celebrating the sector, and others characterizing the profits as taking advantage of the poor. Further reports cited links between Microfinance Institutions (MFIs) lending and suicides in Andhra Pradesh. The incident culminated when Andhra Pradesh‟s Chief Minister passed the Andhra Pradesh Microfinance 10

Ordinance 20102, which includes a number of measures that greatly restricts microfinance institutions‟ operations. As a result of the ordinance, and the general attitude towards microfinance in Andhra Pradesh, loan repayments dropped dramatically3. Due to low repayment rates, microfinance institutions, with exposure to Andhra Pradesh, suffered significant losses. Banks stopped lending to microfinance institutions all over India, for fear that a similar situation would occur elsewhere, resulting in a liquidity crunch for microfinance institutions, which are largely dependent on bank lending as a funding source. With the sector at a standstill, microfinance institutions, microfinance clients, banks, investors, and local governments were calling for new regulation to address the prominent issues of the sector. The Reserve Bank of India (RBI) responded by appointing an RBI sub-committee know as the Malegam Committee. This committee aimed to address the primary customer complaints that led to the crisis, including coercive collection practices, usurious interest rates, and selling practices that resulted in over-indebtedness. The existing regulations did not address these issues, thus, who should respond to these issues, and how they should respond, was uncertain. This prolonged the general regulatory uncertainty and the resulting repayment and institutional liquidity issues.

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The Malegam Committee released their recommended regulations in January 2011. These recommendations were 'broadly accepted' by RBI in May 2011, though specific regulation was only released regarding which institutions qualify for priority sector lending at this time. Additionally, an updated version of the Micro Finance Institutions (Development and Regulations) Bill 2011 is in Parliament, which aims to provide a regulatory structure for microfinance institutions operating as societies, trusts, and cooperatives. Although this shows that regulators are taking steps to address the crisis issues and resolve regulatory uncertainty, banks have not resumed lending to microfinance institutions as of July 2011. Existing Regulatory Framework The current regulatory structure currently consists of the regulation prior to the Andhra Pradesh crisis, various state legislations, and the partial

implementation of the Malegam Report by RBI. This section will also include recent proposed legislation, including items from the Malegam Report that have not yet been addressed by RBI and the Micro Finance Institutions (Development and Regulations) Bill 2011.

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Legal Structure A microfinance institution acquires permission to lend through registration. Each legal structure has different formation requirements and privileges. Microfinance institutions in India are registered as one of the following five entities: -MFIs), comprised of Societies and Trusts under the conventional state-level cooperative acts, the national level multi-state cooperative legislation Act (MSCA 2002 ), or under the new state-level mutually aided cooperative acts (MACS Act) -for-profit) -profit Non-Banking Financial Companies (NBFCs) -MFIs NGO-MFIs, Cooperatives, and Section 25 Companies Microfinance institutions operating as a non-profit company operate as either an NGO-MFI, Cooperative, or Section 25. Each is structured slightly differently in terms of ability to accept equity investments and dividends. There exists little regulation that applies to these structures, aside from registration requirements.

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NBFCs The mainstream financial sector in India is divided primarily into two categories, banks and NBFCs. Banks adhere to much more stringent regulation than NBFCs because they are permitted to accept public deposits and are considered to possess systemic risk. The NBFC encompasses many different types of financial companies, which are all subject to the same regulatory requirements. Many microfinance institutions have recently registered as NBFCs to take advantage of access to capital markets. Microfinance institutions operating as NBFCs account for the great majority of the microfinance market in India, with about 50 NBFCs responsible for 80 percent of all microfinance loans (by outstanding portfolio)4. NBFC-MFIs For-profit institutions that qualify for priority sector lending funds are registered as NBFC-MFIs. This NBFC sub-category was created by RBI in May 2011 as a way to classify NBFCs operating as microfinance institutions which meet certain requirements. Currently, it is unclear how many NBFCs will elect to register as NBFC-MFIs, and how many will continue to operate as NBFCs. Current Regulation Very little regulation exists for NGO-MFIs and Cooperatives, aside from registration with a local or state authority. Currently there is no regulator that 14

oversees NGO-MFIs, Cooperatives, and Section 25s. RBI is the regulator for NBFCs. NBFCs are subject to some prudential regulation, including a minimum capital requirement, a capital adequacy requirement, and foreign investment restrictions. Since NBFCs encompass many types of financial institutions, microfinance institutions operating as NBFCs are subject to no specific regulation relating to lending, pricing, or operations. Recent regulatory discussion surrounds the partial acceptance of the Malegam Report by RBI in May 2011, where RBI created the NBFC-MFI designation. RBI stated that it 'broadly accepts the Malegam Committee recommendations', although specific regulation was released only to determine which institutions qualify for priority sector lending. The new regulation from RBI, currently, only applies to the newly created NBFCMFI category. Microfinance institutions operating under other legal structures face minimal regulatory requirements, aside from registration, though recent drafts of the pending Micro Finance Institutions (Development and Regulations) Bill 2011, has put all microfinance institutions under the jurisdiction of RBI. There has been dramatic change in the regulation of microfinance institutions recently, with much more change expected to follow in the coming months. We will discuss major regulatory points, including priority sector lending, deposit mobilization, access to capital, the Money Lending Act, and state level regulation. We will also discuss pending regulation, including portions of the Malegam Report which have not been specified by RBI, and the Micro Finance Institutions (Development and Regulations) Bill 2011. 15

The History of Modern Microfinance

ABSTRACT: In the late 1970s the concept of microfinance had evolved. Although, microfinance have a long history from the beginning of the 20th century we will

concentrate

mainly

on

the

period

after

1960.

Many credit groups have been operating in many countries for several years, for example, the "chit funds" (India), tontines" (West Africa), "susus" (Ghana), "pasanaku" (Bolivia) etc. Besides, many formal saving and credit institutions have been working for a long time throughout the world. During the early and mid 1990s various credit institutions had been formed in Europe by some organized poor people from both the rural and urban areas. These institutions were named Credit Unions, People's Bank etc. The main aim of these institutions was to provide easy access to credit to the poor people who were neglected by the big financial institutions and banks. In the early 1970s, few experimental programs had started in Bangladesh, Brazil and some other countries. The poor people had been given some small loans to invest in micro-business. This kind of micro credit was given on the basis of solidarity group lending, that is, each and every member of that group guaranteed the repayment of the loan of all the members. Role of Microfinance:

The micro credit of microfinance prename was first initiated in the year 1976 in Bangladesh with promise of providing credit to the poor without collateral , alleviating poverty and unleashing human creativity and

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endeavor of the poor people. Microfinance impact studies have demonstrated that 1. Microfinance helps poor households meet basic needs and protects them against risks. 2. The use of financial services by low-income households leads to improvements in household economic welfare and enterprise stability and growth. 3. By supporting women‘s economic participation, microfinance empowers women, thereby promoting gender-equity and improving household well being. 4. The level of impact relates to the length of time clients have had access to financial services. Difference between micro credit and microfinance: Micro credit refers to very small loans for unsalaried borrowers with little or no collateral, provided by legally registered institutions. Currently, consumer credit provided to salaried workers based on automated credit scoring is usually not included in the definition of micro credit, although this may change. Microfinance typically refers to micro credit, savings, insurance, money transfers, and other financial products targeted at poor and low-income people.

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Activities in Microfinance:

Micro credit: It is a small amount of money loaned to a client by a bank or other institution. Micro credit can be offered, often without collateral, to an individual or through group lending. Micro savings: These are deposit services that allow one to save small amounts of money for future use. Often without minimum balance requirements, these savings accounts allow households to save in order to meet unexpected expenses and plan for future expenses Micro insurance: It is a system by which people, businesses and other organizations make a payment to share risk. Access to insurance enables entrepreneurs to concentrate more on developing their businesses while mitigating other risks affecting property, health or the ability to work. Remittances: These are transfer of funds from people in one place to people in another, usually across borders to family and friends. Compared with other sources of capital that can fluctuate depending on the political or economic climate, remittances are a relatively steady source of funds. Product Design: The starting point is: how do MFIs decide what product s to offer? The actual loan products need to be designed according to the demand of the target market. Besides the important question of what risks to cover, organizations also have to decide whether they want to bundle many different benefits into one basket policy, or whether it is more appropriate to keep the product simple. For marketing purposes, MFI‗s sometimes prefer 18

the basket cover, since it can make the policies sound comprehensive, but is that the right approach for the low-income market? After picking products, one must also understand how they are priced. What assumptions do the organizations make with regard to operating costs, risk premiums, and reinsurance, and how did they come to those conclusions? Would their clients be willing to pay more for greater benefits? From price, the logical next set of questions involves efficiency. Indeed, given the relative high costs of delivering large volumes of small policies, maximizing efficiency is a critical strategy to ensuring that the products are affordable to the lowincome market. One way is to make the products mandatory, which increases volumes, reduces transaction costs and minimizes adverse selection. What does an organization lose by offering mandatory insurance, and how does it overcome the disadvantages? MFI‗s can combine a mandatory product with some voluntary features to make the service more us to mar-oriented while.

Techniques of Product Design: To design a loan product to meet borrower needs it is important to understand the cash pattern of the borrowers. Cash pattern is important so far as they affect the debt capacity of the borrowers. Lenders must ensure that borrowers have sufficient cash inflow to cover loan payments when they are due efficiency depends less on the delivery model than on the simplicity of the product or product menu. Simple products work best because they are easier to administer and easier for clients to understand. Another efficiency strategy is to use technology to reduce paperwork, manual processing and errors.

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The Need in India India is said to be the home of one third of the world‘s poor; official estimates range from 26 to 50 percent of the more than one billion population. • About 87 percent of the poorest households do not have access to credit. • The demand for micro credit has been estimated at up to $30 billion; the supply is less than $2.2 billion combined by all involved in the sector. Due to the sheer size of the population living in poverty, India is strategically significant in the global efforts to alleviate poverty and to achieve the Millennium Development Goal of halving the world‘s poverty by 2015. Microfinance can also be distinguished from charity. It is better to provide grants to families who are destitute, or so poor they are unlikely to be able to generate the cash flow required to repay a loan. This situation can occur for example, in a war zone or after a natural disaster. While India is one of the fastest growing economies in the world, poverty runs deep throughout country. About two thirds of India‘s more than 1billion people live in rural areas and almost 170 million of them are poor. For more than 21 percent of them, poverty is a chronic condition. Three out of four of India‘s poor live in rural areas of the country. Poverty is deepest among scheduled castes and tribes in the country‘s rural areas. The micro-finance scene in India is dominated by Self Help Groups (SHGs) - Banks linkage program for over a decade now. As the formal banking system already has a vast branch network in rural areas, it was 20

perhaps wise to find ways and means to improve the access of rural poor to the existing banking network. This was tried by routing financial. Indian microfinance is poised for continued growth and high valuation but faces pressing challenges and opportunities that—left unaddressed—could negatively impact the long-term future of the industry. The industry needs to move past a single-minded focus on scale, expand the depth and breadth of products and services offered, and focus on the double bottom line and over indebtedness to effectively address the risks facing the industry. Micro-Financing Regulation in India Advantage of Regulation: Following are the advantages and benefits of regulation and supervision of /MFIs: i. Protects the interest of the depositors; ii. Put in place prudential norms, standards and practices; iii. Provides sufficient information about the true risks faced by the banks/MFIs; iv. Promoters systemic stability and thereby sustains public confidence in the banks/MFIs; v. Prevents a bank‘s/MFI‘s failure/potential dangers through timely interventions; vi. Penalizes the violations, misconducts, non-compliance to the norms of behavior;

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vii. Provides invaluable advisory inputs for problem-solving and overall improvement of the banks/MFIs; viii. Promoters safe, strong and sound banking/MF system and effective banking/MF policy and ix. Promotes and enhances orderly economic growth and development.

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RESEARCH METHODOLOGY

Data Collection For the purpose of study use primary data and secondary data

Primary data Though the primary data is expensive and time consuming we use primary data for the purpose of study. Primary data collected directly by the researcher for the purpose of study Merits of Primary Data; 1. Primary data is more reliable 2. Primary data is more accurate 3. Personal interaction is possible in primary data collection

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Demerits of Primary data; 1. Primary data is time consuming 2. Primary data is costly

I use primary data for the purpose of study Secondary data Secondary data is the data used by the interviewer which are already published Things to remember while selecting secondary data 1. Person who collected the data 2. Geographical area from the data is collected 3. Purpose for which the data is collected 4. Time in which the data is collected Source of secondary data 1. Magazines 2. Journals 3. News Paper 4. Various Books 24

5. Internet Questionnaire Questionnaire is list of questions used for the collection of data in an investigation form. Schedules are usually prepared with these questions printed or written on the left side of the paper and space left for answers on the right side. Questionnaire is necessary for both census and sample study. The following are some general rules in drafting the questionnaire. 1. The no: of questions should be minimum 2. The questions should be able to gather all the required information 3. The questions should be arranged in a logical order 4. The questions should be short and simple 5. Questions, which requires calculation for references should be avoided 6. The meaning of technical term is used In this particular study questionnaire is used in survey to collect data .It is used because it is useful to know the response directly. The collection of data for the study was done through direct interview 65 employees of the company from various departments.

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LIMITATIONS

1 Limited number of responses is taken for the study. So the result may not be accurate. 2 Time is another limiting factor. 3 Through this study general conclusion is made

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DATA ANALYSIS & INTERPRETATION TABLE NO 1 Table showing respondents are customer of different bank SL NO 1 2

CRITERIA

NO OF RESPONDENTS

Yes No Total

50 0 50

PERCENTAGE OF RESPONDENTS 100% 0% 100%

INTERPRETATION From the above table it is clear that all respondents are customer of different banks.

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GRAPH NO 1 Graph showing respondents are customer of any bank 120 100 100 80 60

50

40 20 0

0

0 Yes

No

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TABLE NO 2 Table showing bank selected by respondents SL NO 1 2 3 4 5

CRITERIA

NO OF RESPONDENTS

SBI ICICI SIB IDBI HDFC Total

10 10 10 10 10 50

PERCENTAGE OF RESPONDENTS 20 20 20 20 20 100

INTERPRETATION From the above table it is clear that 10% of respondents taken account from SBI, another 10% opened account from ICICI, another 10% taken account from SIB , another 10% taken account from IDBI , and remaining 10% taken account from HDFC .

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GRAPH NO 2 Graph showing bank selected by respondents 20 20 18 16 14 12 10 8 6 4 2 0

10

SBI

20

10

20

10

ICICI

SIB

30

20

10

IDBI

20

10

HDFC

TABLE NO 3 Table showing preference of customers with respect of location of banks as one of the favorites‘ SL NO 1 2

CRITERIA

NO OF RESPONDENTS

Yes No Total

50 0 50

PERCENTAGE OF RESPONDENTS 100 0 100

INTERPRETATION From the above table it is clear that all the banks are situated in respondents location.

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GRAPH NO 3 Graph showing preference of customers with respect of location of banks as one of the favorites‘ 100 100 80 50

60 40

0 20 0

0 Yes No

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TABLE NO 4 Table showing Classification of respondents on the basis of how long they deal with their banks

SL NO 1 2 3

CRITERIA

NO OF RESPONDENTS

Less than 1 year 1 to 5 year More than 5 year Total

40 5 5 50

PERCENTAGE OF RESPONDENTS 80 10 10 100

INTERPRETATION From the above table it is found that majority of respondents are dealing with bank less than one year. Other 10 % are dealing with bank since last 1 to 5 years, and remaining 10 % respondents deal with more than 5 year.

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GRAPH NO. 4 Graph showing Classification of respondents on the basis of how long they deal with their banks

80 80 60 40 40

10

10

20 5 5

0 Less than 1 year

1 to 5 year More than 5 year

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TABLE NO 5 Table showing respondents opinion about they are satisfied with function of bank. SL NO 1 2 3 4 5

CRITERIA

NO OF RESPONDENTS

Excellent Very good Good Satisfied Bad Total

21 13 5 7 4 50

PERCENTAGE OF RESPONDENTS 42 26 10 14 8 100

INTERPRETATION From the above table it is found that majority(42%) of the respondents have the opinion that function of bank is excellent , 26% of the respondents have opinion that function of bank is very good, 14% of the respondents have the opinion that function of bank is satisfied, 10% of the respondents have the opinion that function of bank is good , remaining 8% of the respondents have the opinion that it is bad.

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GRAPH NO 5 Graph showing respondents opinion about they are satisfied with function of bank.

45

42

40 35 30 25

26 21

20 14

13

15

10

10

5

8

7 4

5 0 Excellent

Very good

Good

36

Satisfied

Bad

TABLE NO 6 Table showing respondents opinion about micro finance provided by their bank. SL NO 1 2 3

CRITERIA

NO OF RESPONDENTS

Excellent Good Bad Total

40 10 0 50

PERCENTAGE OF RESPONDENTS 80 20 0 100

INTERPRETATION From the above table it is clear that 80 % of the respondents said that micro finance offered by the bank is excellent, 20% said it is good.

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GRAPH NO 6 Graph showing respondents opinion about micro finance provided by their bank.

80 80 60 40 20

40 20

0

10

0

0 Excellent

Good Bad

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TABLE NO 7 Table showing respondents opinion about they are enjoying facility of micro finance provided by bank SL NO 1 2

CRITERIA

NO OF RESPONDENTS

Yes No Total

40 10 50

PERCENTAGE OF RESPONDENTS 80 20 100

INTERPRETATION From the above table it is found that 80 % of respondents enjoying the facility of micro finance offered by the bank, and 20% not.

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GRAPH NO 7 Graph showing respondents opinion about they are enjoying facility of micro finance provided by bank 80 80 70 60 50

40

40 30 20

20 10

10 0 Yes

No

40

TABLE NO 8 Table showing respondents opinion about which purpose bank providing micro finance SL NO 1 2

CRITERIA

NO OF RESPONDENTS

Small scale business Agriculture purpose Total

30 20 50

PERCENTAGE OF RESPONDENTS 60 40 100

INTERPRETATION From the above table it is found that 60 % of the respondents said that bank giving finance for starting small scale business, and remaining 40% said bank give finance for agriculture purpose.

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GRAPH NO 8 Graph showing respondents opinion about which purpose bank providing micro finance

60 60 50 40

40

30

30 20

20

10 0 small scale businees

agriculture purpose

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TABLE NO 9 Table showing respondents opinion about what is the percentage of micro finance with total advance made by the bank SL NO 1 2 3

CRITERIA

NO OF RESPONDENTS

10 to 20 % 20 to 40 % No idea Total

20 20 10 50

PERCENTAGE OF RESPONDENTS 40 40 20 100

INTERPRETATION From the above table it is found that 40 % of the respondents said that percentage of micro finance is 10 to 20%, another 40 % said it is 20 % to 40% , and remaining 20 % said no idea.

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GRAPH NO 9 Graph showing respondents opinion about what is the % of micro finance with total advance made by the bank

40

40

40 35 30 25

20

20

20

20

15 10

10

5 0 10 to 20 % 20 to 40 % No idea

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TABLE NO 10 Table showing respondents opinion about micro finance help in development their location. SL NO 1 2

CRITERIA

NO OF RESPONDENTS

Yes No Total

40 10 50

PERCENTAGE OF RESPONDENTS 80 20 100

INTERPRETATION From the above table it is found that 80 % of respondents said micro finance help in development their location and remaining 20 % not agree with it.

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GRAPH NO 10 Graph showing respondents opinion about micro finance help in development their location.

80 80 70 60 50

40

40 30 20

20 10

10 0 Yes

No

46

TABLE NO 11 Table showing respondents opinion about micro finance will create heavy burden SL NO 1 2

CRITERIA

NO OF RESPONDENTS

Yes No Total

10 40 50

PERCENTAGE OF RESPONDENTS 20 80 100

INTERPRETATION From the above table it is found that 20% of the respondents said that micro finance will create a heavy burden , and 80% said no.

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GRAPH NO 11 Graph showing respondents opinion about micro finance will create heavy burden 80 80 70

40

60 50 40 30 20 10 0

40 20

Yes No

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TABLE NO 12 Table showing respondents opinion about performance of bank in micro finance SL NO 1 2 3

CRITERIA Excellent Good Bad Total

PERCENTAGE NO OF OF RESPONDENTS RESPONDENTS 40 80 10 20 0 0 50 100

INTERPRETATION From the above table it is clear that 80 % of the respondents said that performance of the bank is excellent, 20% said it is good

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GRAPH NO 12 Graph showing respondents opinion about performance of bank in micro finance.

80 80 70 60 50

40

40 30 20

20 10

10 0

0 Excellent

Good Bad

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0

FINDINGS 1. All respondents are customer of banks. 2. 10% of respondents taken account from SBI, another 10% opened account from ICICI, another 10% taken account from SIB , another 10% taken account from IDBI , and remaining 10% taken account from HDFC . 3. All the banks are situated in respondents location. 4. Majority of respondents are deal with bank less than one year. Other 10 % are deal with bank since last 1 to 5years, and remaining 10 % respondents deal with more than 5 year 5. All the respondents are satisfied with the banks function 6. 80 % of the respondents said that micro finance offered by the bank is excellent, 20% said it is good. 7. 80 % of respondents said micro finance help in development their location and remaining 20 % not agree with it.

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SUGGESTION 1 Improve the facilities of providing microfinance 2 Provide microfinance for more productive purpose 3 Expand the area for providing microfinance

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CONCLUSION

On my B.Com program I undertake a study the topic the impact of service on Micro finance provided by banks, during the study I take so responds and calculate the service use by the responds in micro finance and evaluate rating giving by the responds on the performance of micro finance. on this study I give suggestion and I feel that may suggestion are taken in the consideration. Fortunately, there is an increasing awareness about the power of microfinance, and the need to support its growth. Many players have committed themselves to its promotion. Governments are taking an increasing interest in it. More banks, both national and international are coming forward with different support packages. NGO-MFI partnerships are on the increase. New instruments are being used to solve the problem of funding. It is expected that in the coming years more ideas, innovations, cost saving devices, and players will continue to reinforce the microfinance movement and increase its expansion.. The last decade has witnessed an impressive growth of microfinance; lack of funding is still considered a major obstacle in the way of its growth. However, it is encouraging that the situation is changing. Given the experiences of large and fast growing the last decade has witnessed an impressive growth of microfinance; lack of funding is still considered a major obstacle in the way of its growth. However, it is encouraging that the situation is changing. Given the experiences of large and fast growing Microfinance, there are lessons for others who want to increase their outreach and operate on a sustainable basis. At the end I would conclude that, Micro Finance Industry has the huge potential to grow in future, if this industry grows then one day we‗ll all see the new face of India, both in term of high living standard and happiness.

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BIBLIOGRAPHY 

Shashi k.gupta, Organization structure and dynamics.



Rosy Joshy, Human resource management.



www.goole .com



www.wikkiepedia.com

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APPENDIX

Name:

Age: Less than 20( ) 20-30 ( ) 30- 40 ( ) Above ( ) Gender: Male( ) Female ( ) Material status: Married ( ) Unmarried ( ) Educational Qualification: + 2 ( ) UG ( ) PG ( ) Diploma ( ) Others ( )

1 Are you a customer of any bank? Yes

 No

2 In which bank you opened the account?  SBI  SIB

 ICICI  IDBI  HDFC

3 whether all these bank are situated at your location? Yes  No 4 How long you operate the account in your bank?  Less than one year  1 to 5 years

 more than 5 years

5 Are you satisfied with the function of your bank?  Yes  No 55

6 What is your opinion about the micro finance provided by your bank?  Excellent  Good  Bad 7 Are you enjoy the facilities of micro finance provided by the bank?  Yes

 No

8 In which purpose the microfinance provided by the bank? Starting small scale business  Agriculture purpose 9 What is the percentage microfinance in connection with total advance made by the bank?  10 to 20%  20 to 40%  No idea 10 Do you feel the microfinance provided by the bank may help to develop in your location?  Yes  No 11 Do you feel the microfinance will create a heavy burden?  Yes  No 12 How will you rate the overall percentage of your bank?  Excellent  Good  Bad

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