Access Development Services has released the latest report about Microfinance in India . The report has now been renamed ” Inclusive Finance in India ” from “Microfinance India”, this new name has been zeroed on to reflect the broader field of inclusive finance and engage with a wider group of stakeholders in India. The microfinance sector has emerged stronger from the crisis it faced in 2010-2011 and this report cements the sector as one of the important pillars of financial services in India.
Download Microfinance India – State of the Sector Report at the link below :
The 2014 edition of the report was released in December 2014 and is authored by Tara S Nair and Ajay Tankha. Previously the report used to be authored by N. Srinivasan a doyen of the microfinance sector in India.
A lot of changes have occurred in the Microfinance sector since this report was released. For instance Bandhan Financial Services is no longer a NBFC-MFI but has transformed itself into a full fledged bank. Also the Reserve Bank of India last week announced Banking licenses for more than 8 microfinance companies. With these developments almost 60% of the outstanding microfinance loan portfolio is managed by microfinance banks. Along with all these developments, the whole sector has seen enormous growth in 2015 thus making much of the data in the report redundant.
Inclusive Finance India Report 2014
The survey gives a birds eye view of the financial services sector in India, this is a digression from previous eight editions of the Microfinance India – State of Sector Report which has been published since 2006 and was solely focused on the microfinance sector in India. The current report is more broad in it’s scope and the view that it presents.
The report provides the latest data on financial inclusion trends in India. A large part of the Indian population which was financially excluded has become a part of the banking system through the Pradhan Mantri Jan Dhan Yojana. PMJDY will have a profound impact on the financial ecosystem in India and experts are yet to pass their final judgement on it as it is still a work in progress.
The CRISIL Inclusix index has shown a marked improvement compared to it’s launch in 2009, PMJDY is a major contributor to the increase in the Crisil Inclusix Index.
The report contains comprehensive data from many surveys about the financial behaviour of Indians which is quite fascinating to the lay person. Some of these findings are :-
- About 70% of those who saved money deposited their money in bank accounts while 30% saved it at their homes.
- Most Indians (67%) took loans from their community networks and relied on friends,neighbors and relatives. While only 11% borrowed money from a bank and 12% borrowed it from money lenders.
- Low Banking activity continues despite the success of PMJDY, only 47% of users surveyed had a bank account and out of these only 54% had carried out a bank transaction from their bank accounts in the previous 90 days.
- Low ATM Usage – The survey also revealed that ATM usage was still low at 28% compared to 71% who went to their branch bank to carry out basic transactions. The remaining 1% did their transactions through Banking Correspondent Agents and OTC counters at retail stores.
Microfinance India State of Sector report 2015 – 2016
The latest edition of the state of the sector report is expected to be released at the Inclusive Finance India Summit in New Delhi, December 10,11 2015. Those interest in attending the event should visit the summit website.