A

PROJECT REPORT

ON

MICROFINANCE

Submitted for the partial fulfillment of the requirement for the degree of

BACHELOR OF BUSINESS ADMINISTRATION (BBA)

GOVT. DEGREE COLLEGE BARSAR

(SESSION 2022 – 2025)

FACULITY GUIDE

Prof. DR
ANIL SUBMITTED BY:
DOGRA KANIKA THAKUR
Assistant Professor BBA 6th
Univ. Roll no. 5220090018
Govt. Degree College Barsar
 CERTIFICATE
This is to certify that the project entitled ‘A study on M I C R O F I N A N C E as part of the final
year Research Project submitted by kanika thakur under the guidance of Dr Anil Dogra in the 6th
Semester of BBA, Govt. College, Barsar is his original work and has not been submitted anywhere else
for the award of any credits/ degree whatsoever.

DR ANIL DOGRA Prof: DR ANIL DOGRA

(Head of the Department) (Project Guide)
 DECLARATION
I hereby declare that the work titled ‘A Study on MICROFINANCE as part of the final year
Research Project submitted by me in the 6th semester of BBA, Govt. College, Barsar, under the
guidance of D r A n i l D o g r a is my original work and has not been submitted anywhere else.

The report has been written by me in my own words and not copied from elsewhere. Anything

that is not my original work has been duly and appropriately referred/cited/acknowledged.

Date…………………………………
Signature
Place…………………………
 EXECUTIVE SUMMARY

There is a mounting hope that microfinance can be large scale poverty alleviation tool for decades India’s
poor have been left out of the reach of the bank loans. But out of necessity and enterprise, those locked
out of the banking world have found a way out. It is called microcredit-the extension small loans to
individuals who are too poor to qualify for traditional bank, loans, as they have no assets to be
offered as guarantee. In India, microcredit has largely worked only through self help groups. Globally it
is slowly proving one of the most effective strategies to remove poverty. Banks too are shedding their
old reluctance to lend to the poor, and are looking to tap the expertise of microcredit groups to create
new market which has been emphatically projected on the current study

I have studied 5-6 case studies of Jalgaon janata sahakari bank which were all about how they helped
and financed the poor and economically backward women in the district of Jalgaon

Self-Help Group or in-short SHG is now a well-known concept. It is now almost two decade old. It is
reported that the SHGs have a role in hastening country’s economic development. SHGs have now
evolved as a movement. Mainly, members of the SHGs are women. Consequently, participation of
women in the country’s economic development is increasing. They also play an important role in
elevating the economic status of their families. This has led boost to the process of women’s
empowerment.

I undertook this project report mainly for the purpose of understanding the importance
of SHG’s in today’s banking and Indian economy.

All in all microfinance is all about how bank and government institutions help the backward class
and encourage their savings, and provide their banking knowledge
 INDEX

 Introduction
 Bank profile
 About
 Special features
 Branch expansion
 Performance highlights and
profitability
 Literature review
 Self help group (the heart of
microfinance)
 Basic knowledge of SHG
 Challenges faced by woman
entrepreneurs
 Overcoming the challenges
 Objectives & scope of the study
 Research methodology
 Data analysis
 Analysis1
 Analysis2
 Analysis3
 Analysis4 (case studies)
 Findings
 Conclusion
 Limitations
 Suggestions
 Bibliography
 Questionnaire
 INTRODUCTION

 What is microfinance?

Microfinance is a source of financial services for entrepreneurs and small businesses lacking
access to banking and related services.

 What is microcredit?

A small financial loan made to poverty-stricken individuals seeking to start their own
business. This type of loan typically does not exceed a couple hundred dollars, so an
impoverished individual can not solely depend on this type of loan to fund their business. It’s also
called micro loan.

 What is the difference between microfinance and microcredit?

Although often used interchangeably, microfinance and microcredit are in fact quite distinct.
Microfinance is a much broader concept than microcredit and refers to loans, savings,
insurance, money transfers, and other financial products targeted at poor and low-income
people. Microcredit refers more specifically to making small loans available to poor people,
especially those traditionally excluded from financial services, through programmes designed
specifically to meet their particular needs and circumstances.

 What is self help group?

A self-help group (SHG) is a village-based financial intermediary committee usually

composed of 10–20 local women or men. A mixed group is generally not preferred. Most
self-help groups are located in India, though SHGs can also be found in other countries,
especially in South Asia and Southeast Asia.
In India, Self Help Groups or SHGs represent a unique approach to financial
intermediation. The approach combines access to low-cost financial services with a process
of self management and development for the women who are SHG members The SHGs signify
transforming energy into synergy.
In the Indian economy in general, women comprise a significant proportion of labor force
especially in agriculture and rural sector. By working in factories, laboratories, agricultural fields,
construction sites, mines and numerous organizations, women have been contributing a
great deal to the economic progress of the country. Despite this, they continue to be
underpaid. Moreover, their contribution goes unnoticed. Also, women workers face serious
problems and constraints related to work, such as lack of continuity, insecurity, wage
discrimination, unhealthy job relationship, absence of medical facilities and accident prevention
and post accident care. The below two real cases of Jodhpur district of Rajasthan bear a
testimony to this fact.

 What is my project and what I learnt?

Projects can be further defined as temporary rather than permanent social systems or work
systems that are constituted by teams within or across organizations to accomplish particular
tasks under time constraints. As mentioned above that SHG’s are the financial supporters for
rural people specially women, so I have made an effort by studying how JALGAON JANATA
SAHAKARI BANK has supported such groups. The graphs will draw the attention towards some
statistics which will explain how SHG’s are growing popular in rural and urban cities as well.
 LITERATURE REVIEW

SELF-HELP GROUPS
(The heart of microfinance)

Muhammad Yunus, a Nobel Prize winner, introduced the concept of Microfinance in Bangladesh
in the form of the "Grameen Bank". The National Bank for Agriculture and Rural Development
(NABARD) took this idea and started the concept of microfinance in India. Under this mechanism,
there exists a link between SHGs (Self-help
groups), NGOs and banks. SHGs are formed and nurtured by NGOs and only after accomplishing a
certain level of maturity in terms of their internal thrift and credit operations are they entitled to
seek credit from the banks. There is an involvement from the concerned NGO before and even
after the SHG-Bank linkage. The SHG-Bank linkage programme, which has been in place since 1992
in India, has provided about 22.4 lakh for SHG finance by 2006. It involves commercial banks,
regional rural banks (RRBs) and cooperative banks in its operations.

 Society is Focusing on: Development of Self Help Group for Women-

In India, Self Help Groups or SHGs represent a unique approach to financial

intermediation. The approach combines access to low-cost financial services with a process of
self management and development for the women who are SHG members. SHGs are formed
and supported usually by NGOs or (increasingly) by Government agencies. Linked not only to
banks but also to wider development programmes, SHGs are seen to confer many benefits, both
economic and social. SHGs enable women to grow their savings and to access the credit which
banks are increasingly willing to lend. SHGs can also be community platforms from which
women become active in village affairs, stand for local election or take action to address social or
community issues (the abuse of women, alcohol, the dowry system, schools, and water supply).
  Goals-
Self-help groups are started by non-governmental organizations (NGOs) that generally have
broad anti-poverty agendas. Self-help groups are seen as instruments for a variety of goals
including empowering women, developing leadership abilities among poor people,
increasing school enrollments, and improving nutrition and the use of birth control.
Financial intermediation is generally seen more as an entry point to these other goals, rather
than as a primary objective. This can hinder their development as sources of village capital, as
well as their efforts to aggregate locally controlled pools of capital through federation, as
was historically accomplished by credit unions.

 NABARD's 'SHG Bank Linkage' program-

Many self-help groups, especially in India, under NABARD’S SHG Bank Linkage program,
borrow from banks once they have accumulated a base of their own capital and have
established a track record of regular repayments.

This model has attracted attention as a possible way of delivering micro-finance services to
poor populations that have been difficult to reach directly through banks or other
institutions. "By aggregating their individual savings into a single deposit, self-help groups
minimize the bank's transaction costs and generate an attractive volume of deposits.
Through self-help groups the bank can serve small rural depositors while paying them a
market rate of interest."

 Advantages of financing through SHGs

 An economically poor individual gains strength as part of a group.

 Besides, financing through SHGs reduces transaction costs for both lenders and
borrowers.
 While lenders have to handle only a single SHG account instead of a large number of small-
sized individual accounts, borrowers as part of an SHG cut down expenses on travel (to &
from the branch and other places) for completing paper work and on the loss of workdays
in canvassing for loans.
 What are SHGs?

Self help Group (SHGs) are small group of poor people. The members of an SHG face
similar problems. They help each other, to solve their problems. SHGs promote small
saving among their members. The savings are kept with the bank. This is common fund in the
name of the SHG. The SHG gives small loans to its members in the name of common fund.
I. Size of the SHG
 The ideal size of an SHG is 10 to 20 members.
II. Is it officially recognized to the bank with informal groups?
 Yes, RBI and NABARD have approved banking with SHGs. RBI has classified loans to SHGs
as priority sector lending.

II. Who help to form SHGs?

A reasonably educated and helpful local person has to initially help the poor people to form
groups. He or She tells them about the benefits of thrift and advantages of forming groups.
This person is called as ‘animator’ or ‘facilitator’.
I. Any of the following persons can be a successful animator:
 Retired school teacher or a retired government servant, who is well known locally.
 A health worker/ a field officer/ staff of a development agency or department of the State

Government.
 YOU yourself! (The field officer or a staff member of a commercial bank/ regional rural

bank or a field staff from the local co-operative bank or society can also help the poor in
forming groups.)
 A field level functionary of an NGO.

 An unemployed educated local person, having an inclination to help others.

 A member/participant in the Vikas Volunteer Vahini (VVV) Programme of NABARD.

 Woman animators can play more effective role in organizing women SHG’s.
The animator cannot organize the groups all alone. He or she will need guidance, training,
reading material, etc.
 OBJECTIVE OF THE STUDY

 To study the socio-economic background of respondents.

 To examine the Pre-SHG and Post-SHG status of SHG members.
 To study the impact of SHGs on the respondents.
 To study the benefits received by the respondents through various income generating
activities.
 To study the various problems faced by the SHG members in the study area.

SCOPE OF THE STUDY

 This piece of work will draw our attention towards the condition of women in today’s
society and the potential they possess to achieve wonders
 It’ll help to conclude how JJSBL is serving society through empowerment of weaker
sections
 Can be used in the “SWOT” analysis of “micro-financing” structure of JJSBL
 RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the problem. It is a game plan for conducting
research. In this we describe various steps that are taken by the researcher.

“All progress is born of inquiry. Doubt is often better than overconfidence, for it leads to inquiry and
inquiry leads to invention.”

Research in a common parlance is a search for knowledge. Research is an art of scientific and
systematic investigation. Thus research comprises defining and redefining problems, formulating
hypothesis or suggested solutions; collecting, organizing and evaluating data, making deductions and
reaching conclusions. Research methodology is the arrangement of condition for collection and
analysis of data in a manner that aims to combine relevance to the research purpose with economy
in procedure. Research Methodology is the conceptual structure within which research is
conducted. It constitutes the blueprint for the collection measurement and analysis of the data.

Research methodology is a framework for the study and is used as a guide in collecting and
analyzing the data. It is a strategy specifying which approach will be used for gathering and analyzing
the data. it also includes time and cost budget since most studies are done under these two
constraints. The research methodology includes overall research design, the sampling procedure, the
data collection method and analysis procedure

TYPE OF RESEARCH USED:

METHOD OF DATA COLLECTION

After the research problem has been identified and selected the next step is to gather the requisite
data. While deciding about the method of data collection to be used for the researcher should
keep in mind two types of data i.e. primary and secondary.
 Primary Data

The primary data are those, which are collected afresh and for the first time, and thus
happened to be original in character. We can obtain primary data either through
observation or through direct communication with respondent in one form or another or through
personal interview.

Methods used in primary data collection-

 Observation method
 Interview method
 Questionnaire method

Secondary Data

The secondary data on the other hand, are those which have already been collected by someone
else and which have already been passed through the statistical processes. When the
researcher utilizes secondary data then he has to look into various sources from where he can
obtain them. For e.g. books, magazine, newspaper, internet, publications and reports.

In this study data have been taken from various

secondary sources like:

 Internet
 Books
 Magazines
 Newspapers
 Journals
 CONCLUSION

In my opinion, the outcomes demonstrate that JJSBL is making a positive impact on the lives of the
citizens in the state of Maharashtra who are particularly from weaker sections. During the study I
found out that the bank has been allowing and supporting group formation, encouraging
savings and monitoring the inter-loaning structure.

Finance is an element which everyone needs. Regular and immediate finance can play an important
role for development of socio-economic conditions of the people particularly the rural poor.
Microfinance is expected to play a significant role in poverty alleviation and rural development
particularly the rural women. The potential for growing micro finance institutions in India is very
high. Major cross-section can have been benefited if this sector will grow in its fastest pace.

From the analysis of data it can be concluded that numbers of members have started savings
only after joining the groups while majority of the members have no savings in the pre-SHG era.
After joining the groups most of the members solved their problems alone