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Endnotes
1 Sa-Dhan's 162 members, of which 140 have active credit programmes, had loans outstanding of about
1,600 crore in March 2006. In March 2005 Sa-Dhan had a total of 139 members, with portfolio
outstanding of about Rs 1,095 crore. If it is assumed that about Rs 50 crore of growth is attributable
to new members, the portfolio outstanding in March 2006 represented a growth of 42 percent, as
against an increase of 50 percent in loans disbursed under the SHG model (see Table 2.1). Unfortunately,
as noted in Chapter 2, the SBLP does not track loans outstanding, but if it is assumed that the
relationship between loans outstanding and loans disbursed remains constant each year, the SBLP grew
faster than the MFI model in terms of portfolio outstanding. Adjusting for the estimate that Sa-Dhan
membership accounts for about 95 percent of the total portfolio outstanding under the MFI model,
the MFI model is still about one-fifth the size of outstanding under the SBLP model on the basis of the
assumption that outstandings under the SBLP are about 70 percent of cumulative disbursements
(see footnote 1, Chapter 2).
Regarding growth of outreach Sa-Dhan's members' outreach grew from 6.2 in March 2005 to 7.3
million in March 2006, or by about 16 percent. This is very similar to the 15 percent growth reported
during 2005-06 by the SBLP of new groups (and hence borrowers) linked. In 2004-06 both models
seemed to have expanded outreach much faster. Thus the the sample of 68 MFIs in Table 3.3 grew by
63 percent, while the SBLP expanded coverage by 49 percent last year (Table 2.1). As noted in Chapter
2, the SBLP is focusing increasingly on repeat loans to existing groups, which is raising average loan
size per borrower closer to that under the MFI model.
Intellecap 2005 estimates that the CAGR of Sa-Dhan members' portfolio outstanding was 76 percent
over the five years from 2001 (Intellicap 2005). At this rate of growth it estimates that by 2010 the
MFI model should account for almost half of total loans outstanding of about Rs 28,000 under both
models.
2 For a description of these and other institutional forms see Sa-Dhan (2006). Federations in a sense
straddle both models - they provide services to their members enabling them to link up directly with the
banks, while supplementing their funds from bulk borrowing they access as MFIs. But they do not
represent "convergence" as is sometimes claimed.
3 A recent estimate is 400-500 MFIs registered as societies and trusts, 300-400 as cooperatives, mostly
under the state MACS acts, and the remaining as S 25 companies and NBFCs (Sa-Dhan (2006)). It
would be useful to get a firmer estimate of the universe of MFIs now operating in India since this is the
seed-bed out of which future saplings will emerge, some of them to grow into trees. The question is of
more than academic interest since it has implications for training and financing requirements, whether
by the banks or apex financing institutions catering to small, nascent MFIs, such as FWWB, RMK, and
RGVN, and it could lead to a study of the problems of start-up MFIs.
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