URICM - UDAYBHANSINHJI - Regional Institute of Cooperative ...

activities, SHG training, and promotion of new groups, apart from financialintermediation.These institutions cannot undertake financial intermediation activities on alarge scale, as they are prohibited from carrying out any commercial activities.Microfinance – Major PlayersThe major players which were instrumental in the growth of microfinanceindustry in India included NABARD, SIDBI, Rashtriya Mahila Kosh, FWWB andSHARE Micro fin Limited.NABARDNABARD was established in 1982 to provide credit to the rural sector. NABARDwas a pioneer in microfinance programs in India.The bank's vision is "to facilitate sustained access to financial services for theunreached poor in rural areas through various microfinance innovations in acost effective and sustainable manner."By 2005, NABARD's SHG-Bank Linkage program had emerged as one of thelargest microfinance programs in the world. NABARD also collaborated withNGOs, MFIs, banks and governmental agencies in order to use other models ofrural credit like the Grameen Model and the individual banking model.Encouraged by the success of the SHG program, NABARD planned to link 1million SHGs by 2007 and reach 100 million rural poor.The FutureMany private and foreign banks have unveiled their plans to enter the Indianmicrofinance sector because of its very low NPAs and high repayment rate ofmore than 95% in spite of offering loans without any collateral security.The main reason for high repayment rates was that the loans were managed atthe community level. Borrowers took loans to improve their standard of livingand start a small business. If the repayment was done in time, only then weremore loans given. According to Udaia Kumar, Chairman and Managing Director,SHARE Micro fin Limited, "In all cases there is no security taken. We don't havea legal system. We build a relationship with the client. We motivate them, trainthem, and give them the confidence that they have the capacity to handle. Weensure that the money is used for the purpose that they have taken. Weensure that they make profits. Then definitely they will come back with therepayment. Our repayment rates are 100%.List of MFI’s in IndiaE-URICM 22