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11 See Table 10 of SBS, which shows that the average operational sustainability figure of 110 is made up, on an average, of 83 percent for new MFIs (less than 5 years old), 102 percent for those aged 5 to 10 years, and 172 percent for those older than 10 years. 12 However, this needs to be examined further, since using approximately the same size classification of small (GLP below US$ 1 million), medium ( US$ 1-5 million) and large (above US$ 5 million) but based on a smaller sample the MIX report discussed below finds the opposite in respect of productivity, i.e. that medium sized MFIs are the most productive, with the highest number of borrowers per staff member, because large MFIs have a larger proportion of individual clients who require more staff time to serve. Since individual loans tend to be larger however, they still have the lowest unit operational costs. 13 Or as "working capital". 14 Most medium and small MFIs are registered as societies and trusts which are not allowed by the RBI to mobilize savings, while the larger MFIs registered as NBFC have yet to qualify for approval to raise public deposits. 15 In the Phillipines for instance compulsory deductions at the time of loan disbursement are referred to as "CBU" ( capital build up). Both these uses of compulsory contributions should be distinguished from a third common use, that is to build up a "risk fund", to make temporary repayments on behalf of members with genuine problems, or even to cover permanent default. 16 The MIX report does not include compulsory savings in the category of deposits, since they are lacking in liquidity, judged to be an essential feature of savings if they are to be used in emergencies. Leverage is defined as lending funded not only by debt and capital, but importantly in the case of Bangladesh, also compulsory savings 17 Pushtikar, a cooperative in Jodhpur, is reported to fund 70 percent of its loans through deposits. Another possible explanation for the higher deposits to loan ratio reported for India (compared to Bangladesh) is that it includes the security deposits deducted by many MFIs at the time of loan disbursement. However, while these are refundable on full repayment of the loan, they are not liquid. Such deposits (see Chapter 4) are not regarded as savings by the RBI, but are regarded as being akin to the deposits taken by the banks as cash collateral. They add up to a significant amount, and are used to fund loans. 18 According to Figure 5, page 8 of the MIX report, 7 out of 10 of South Asia's MFIs with the smallest loan balances are Indian (with balances per borrower as a proportion of GNI ranging from 1.7 to 5 percent). 19 SBS reports a higher proportion of woman borrowers, 95 percent. 20 According to the report, average salary levels for qualified personnel in South Asia are about three times per capita income as against as much as 13 times in regions such as Africa. 21 The slightly different sample presumably explains why this is different from the 110 percent found by SBS. 22 Figure 11, page 11 of the MIX report.. 58
Progress Under the MFI Model References ADB, 2002, "Commercialization of Microfinance in Bangladesh" EDA, 2005, “The Maturing of Indian Microfinance: Findings of a microfinance assessment study (baseline) - implications for policy and practice”, study done for SIDBI, Gurgaon Intellecap, 2005, "Future Directions of the Growth of Microfinance Sector in India", Draft Report (December 2005) submitted to Sa-Dhan, Mumbai M-CRIL 2006, “Microfinance Review, 2005”, Gurgaon MIX (Microfinance Information eXchange) 2006, "Performance and Transparency: A survey of microfinance in South Asia", Washington, DC Sa-Dhan, 2005, "Side-by-Side: A Slice of Microfinance Operations in India: September 2005", New Delhi Sa-Dhan, 2006 "Existing Legal and Regulatory Framework for Microfinance Organisations in India: Challenges and Implications", New Delhi 59
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Microfinance in India A State of th
Page 6 and 7:
List of Tables Page No Table 2.1 Gr
Page 8 and 9:
Preface and Acknowledgements This r
Page 10 and 11: Abbreviations ABC ADB BC BF CAR CAG
Page 13 and 14: CHAPTER 1 Overview and Summary of M
Page 15 and 16: Overview and Summary of Main Recomm
Page 27: Overview and Summary of Main Recomm
Page 30 and 31: 1 1a 1b 2 2a 2b 2c 3 3a 3b 3c 4 4a
Page 32 and 33: The Light and Shades Study A major
Page 34 and 35: highest proportion of weak records
Page 36 and 37: their profitability after accountin
Page 38 and 39: allow the programme to grow organic
Page 40 and 41: 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8
Page 42 and 43: Endnotes 1 It is very hard to compa
Page 44 and 45: as cash with the groups, the true r
Page 46 and 47: linkages", 11 percent 3rd, and 5 pe
Page 48 and 49: References APMAS (AP Mahila Abhivru
Page 51 and 52: CHAPTER 3 Progress Under the MFI Mo
Page 53 and 54: Progress Under the MFI Model is fun
Page 55 and 56: Table 3.4 Comparative performance i
Page 57 and 58: Progress Under the MFI Model on lit
Page 59: Progress Under the MFI Model 4 Howe
Page 64 and 65: MFIs, and the need for MFIs to plou
Page 66 and 67: size had actually come down during
Page 68 and 69: The point at which peer group press
Page 70 and 71: The lack of contact and communicati
Page 72 and 73: Box 4.1 Continued 4. MFIs will coll
Page 74 and 75: Endnotes 1 There will be many disag
Page 76 and 77: 19 The base suicide rate in AP is 1
Page 78 and 79: References APMAS, 2005, "A Report o
Page 80 and 81: (such as cattle and houses), and co
Page 82 and 83: The advantage of the provider model
Page 84 and 85: Some lessons learnt from experience
Page 86 and 87: Box 5.2 VimoSEWA: Synergies between
Page 88 and 89: 86 Table 5.1 Main Feature of Health
Page 90 and 91: Endnotes 1 While the microinsurance
Page 92 and 93: 16 A little less than a fifth of th
Page 94 and 95: 29 The rationale for transfer progr
Page 96 and 97: Roth, James and Vijay Athreye, 2005
Page 98 and 99: Issues and priorities for action re
Page 100 and 101: Endnotes 1 See for instance CGAP (2
Page 102 and 103: 100
Page 104 and 105: such as Chaitanya who soon became s
Page 106 and 107: money to support operational expens
Page 108 and 109: finance, and the microfinancial ski
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Box 6.1 Continued in experts and to
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Endnotes 1 In a sense it always was
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16 Examples are Margdarshak in Luck
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114
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Table 7:1 Commercial bank exposure
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The main constraints to the expansi
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further review, RBI has modified th
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9 Thus ICICI has sold some of its b
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B. Equity Investments by the Ventur
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Figure : The Bellwether triangle Lo
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Despite the weaknesses the public s
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Box 7.1 Continued foreign sources o
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Endnotes 1 At this point they will
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References ACCION, 2003, "The Servi
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SIDBI Foundation for Micro Credit (
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categories, depending on the amount
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The distribution of total disbursem
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Endnotes 1 It should be noted that
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B. Donor Participation in Indian Mi
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this has dropped to 8% on the curre
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and poor populations. More directly
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and expansion of available retailer
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11 SDC through various programs for
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154
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1.1 Impact evaluation of Spandana's
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in the loan tenure of 24 months. Th
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There are two main motivations of a
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compensation structures used by Ind
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Endnotes 1 By Annie Duflo, Anvesha
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29 The main components of direct tr
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