Microfinance Reports

Rajasthan Microfinance Report 2010

This report is the conclusion of over two years of work of Centre for Microfinance (CmF), to which numerous people across the sector contributed. CmF would like commend the team for this effort and dedicate this report to all those who participated in consultations, workshops and studies organized by CmF.

Microfinance Report for Rajasthan State – 2010

Our studies and interactions have convinced us of the vast potential of microfinance in Rajasthan. To realize this potential fully, however, concerted and sustained efforts will be needed. This report is a small step in that direction.

The report brings out the current status of the sector in Rajasthan. It is done in the context of the need for financial services among rural people, particularly the poor. It reveals the limited nature of investments that have been made in the sector so far and projects the requirement.

CmF remains committed to pursue its journey along this path. We welcome you to join us in this important endeavor.

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Table of Contents – Rajasthan Microfinance Report 2010


1. About Rajasthan
2. Economy, Livelihood and Employment
3. Women Empowerment
4. Government’s strategy for poverty alleviation
5. Role of microfinance
1. Developmental scheme updates
1.1Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)
1.2NRLM (National Rural Livelihood Mission)
1.3MPOWER (Mitigation of Poverty in Western Rajasthan)
1.4District  Poverty Initiative Project (DPIP) II
1.5Bhamashah Financial Empowerment Scheme
1.6Loan Waiver and One Time Settlement of Debts Scheme
1.7Financial Inclusion
1.8Mushrooming of Multi Level Marketing to collect savings from poor
1.9Interest subsidy of 50% on loans taken by women SHGs
1.10 Standard micro-insurance product for rural & social sector
2. Policy trends having impact on microfinance sector
2.1Addressing all poor rather than targeting only Below Poverty Line (BPL)
2.2Focus on institutions of poor (e.g. SHG Federations and CBOs)
2.3Use of one time subsidy and grants as seed capital
2.4From group enterprise to micro-entrepreneurs’ group
2.5Rollback of private banks from Micro Finance
2.6Shrinking Donor Funds for promotion and nurturing SHGs and SHG federations
2.7Impressive growth by MFIs
3. Innovations in Microfinance Sector
3.1Producer Companies
3.2Mobile phone based MIS
3.3Financial Inclusion of tribal through community based microfinance (Dungarpur Project)
3.4Weather Based Insurance Scheme (WBIS)
Chapter 3 —Demand for Microfinance
1. Profile of Poor in Rajasthan
2. Demand of Savings
3. Demand of Credit
4. Demand of Insurance
5. Demand of Remittance Institutional set up for the delivering the micro financial services Chapter
1.1Total number of SHGs promoted by SHPIs
1.2Estimate of actual number of SHGs
1.3Outreach of Self Help Groups
2. Self Help Group promoting institutions
2.1Department of Women and Child Development (DWCD)
.2Department of Rural Development
2.3NABARD, Banks and Cooperatives
2.4Voluntary Organisations
3. SHG Products and services delivered by SHGs
4. SHG Federation in Rajasthan
4.1Number and composition of SHG Federations in Rajasthan.Why SHG Federations?
4.2Benefits of SHG Federations
4.3Issues faced by SHG Federations in Rajasthan
4.4Cost Benefit analysis of SHG federations
5. Loan Defaults by SHGs
Chapter 5— Microfinance Institutions (MFIs)
1. Products –  credit and insurance
2. Microfinance Institutions in Rajasthan
3. Major issues related to Micro Finance Institutions in Rajasthan
1. Banking Infrastructure
2. SHG  Bank Credit Linkage
2.2Bank type wise credit linkage (number of SHG loans disbursed)
2.3Cross-sectional analysis as of March 2009 – comparison among banks
2.4Performance of Rajasthan relative to that of rest of India
3. Saving Bank Accounts of SHGs in Rajasthan
3.1Number of SHGs having saving bank account by 2009
3.2Amount of SHG savings in banks
3.3Leading banks in Rajasthan in SHG Bank Linkage
4. Issues in SHG Bank Linkage Program
4.1Impounding of Savings by banks
4.2Lack of awareness among banks’ staff
4.3Inadequate monitoring
4.4Focus on achieving targets
4.5Lack of SHG database in Rajasthan for planning and monitoring
1. Efforts towards Financial Inclusion
1.1 Kisan Credit Card
1.2 Self Help Groups
1.3 Adoption of pilot districts by banks for 100% financial inclusion in Rajasthan
1.4 Branchless Banking
1. No legal framework for SHG federations in Rajasthan
2. Not making full use of telecom technology
3. Definition of ‘loan defaulter’
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