EXECUTIVE SUMMARY

OBJECTIVE OF THE STUDY

Microfinance has proved to be a successful step towards poverty alleviation and empowerment in rural area. 1) To study the impact of micro credit on income levels of rural people. 2) To examine the impact of micro credit program on women empowerment. 3) To know the major factors for which people are taking micro-credit. 4) To evaluate various plans by SHGs & study the penetration of micro credit.

Scope to the study:

Microfinance has gradually developed to be a worldwide movement, no longer being a subject matter of microfinance practitioners alone. Governments, donors, development agencies, banks, foundations, corporations, business communities, civil societies, researchers, universities, consultants, philanthropists and others are taking an increasing interest in it. The study is conducted in the area of Punjab in India to study the overall impact of micro cerit on women empowerment & how it has reached to the poor to alleviate poverty. The study will also help to know about the initiatives taken by Government & NGOS to help the poor & what are the areas they are lacking to reach to.

Need of the study:

To evaluate the programs offered by banks & NGOs to help poor with micro credit. Their reach to the poor & suggest the areas they havent reached to. To know the penetration level of micro credit in rural India & suggest some points to increase their reach to the poor

MAJOR FINDINGS
The research stated that, The micro-finance is feasible in Jalandhar region. And most of the people are availing micro-credit in order to do business and to deal with emergencies. For reliable source of finance private and public banks have been regarded as the most suitable one comprising of ICICI bank , HDFC bank , Punjab National Bank and State Bank of Patiala.

SUGGESTIONS

CONCLUSION

Objective of the study:

5) To study the impact of micro credit on income levels of rural people. 6) To examine the impact of micro credit program on women empowerment. 7) To evaluate various plans by SHGs & study the penetration of micro credit.

Scope to the study:

Microfinance has gradually developed to be a worldwide movement, no longer being a subject matter of microfinance practitioners alone. Governments, donors, development agencies, banks, foundations, corporations, business communities, civil societies, researchers, universities, consultants, philanthropists and others are taking an increasing interest in it. The study is conducted in the area of Punjab in India to study the overall impact of micro cerit on women empowerment & how it has reached to the poor to alleviate poverty. The study will also help to

know about the initiatives taken by Government & NGOS to help the poor & what are the areas they are lacking to reach to.

Need of the study:

To evaluate the programs offered by banks & NGOs to help poor with micro credit. Their reach to the poor & suggest the areas they havent reached to. To know the penetration level of micro credit in rural India & suggest some points to increase their reach to the poor.

Research Methodology
Type of research used is descriptive research. Type of data taken is primary data through questionnaire & secondary data from websites & magazines. Tools to be used is SPSS. Sample size taken is 200

Micro credit
Microcredit is the extension of very small loans (microloans) to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit. Microcredit is a part of microfinance, which is the provision of a wider range of financial services to the very poor. Microcredit is a financial innovation that is generally considered to have originated with the Grameen Bank in Bangladesh. In that country, it has successfully enabled extremely impoverished people to engage in self-employment projects that allow them to generate an income and, in many cases, begin to build wealth and exit poverty. Due to the success of microcredit, many in the traditional banking industry have begun to realize that these microcredit borrowers should more correctly be categorized as pre-bankable; thus,

microcredit is increasingly gaining credibility in the mainstream finance industry, and many traditional large finance organizations are contemplating microcredit projects as a source of future growth, even though almost everyone in larger development organizations discounted the likelihood of success of microcredit when it was begun. The United Nations declared 2005 the International Year of Microcredit.

Principles of Microcredit
Microcredit is based on a separate set of principles, which are distinguished from general financing or credit. Microcredit organizations were created to serve in the place of loca [loansharks] known to take advantage of clients.[6] Many microcredit organizations began as nonprofit organizations, running off of government or private subsidies. By the 1980s, the financial systems approach, influenced by neoliberalism and propagated by the Harvard Institute for International Development became the dominant ideology among microcredit organizations. The commercialization of microcredit began with the formation of Unit Desa (BRI-UD) within the Bank Rakyat Indonesia in 1984, which offered kupedes microloans based on market interest rates. Most microcredit organizations now function as independent banks, leading to high interest rates and a greater emphasis on savings programs.[6] The application of neoliberal economics to microcredit has generated much debate among scholars and development practitioners , with some claiming that microcredit bank directors, such as Muhammad Yunus, are employing the practices of a loan shark for their own personal enrichment. Microcredit emphasizes trust building, which can enable micro-entrepreneurship, so generating employment and helping people to help themselves during enterprise initiation and during difficult times.

Lending to Women Lending to women has become an important principle in microcredit, with banks and NGOs such as BancoSol, WWB, and Pro Mujer catering to women exclusively. Though Grameen Bank initially tried to lend to both men and women at equal rates, women presently make up ninety-five percent of the banks clients. Women continue to make up seventy-five percent of all

microcredit recipients worldwide. Exclusive lending to women began in the 1980s when Grameen Bank found that women have higher repayment rates, and tend to accept smaller loans than men. Subsequently, many microcredit institutions have used the goal of empowering women to justify their disproportionate loans to women. Microcredit is a tool for socioeconomic development. Poverty reduction will be attempted Substantial flow of investment in physical infrastructure like roads, water supply and social infrastructure like health, education and nutrition. y Special efforts for generation of adequate employment and creation ofdurable community assets to improve the rural people especially the small farmers, marginal farmers, rural artisans etc., through programmes like Sampoorna Grameen Rozgar Yojana (SGRY). y Decentralization of the process of planning by entrusting major role to the Panchayat raj bodies in the preparation of local level planning. Improving the efficiency and capacity of the offsicials and elected local body representatives.

Monitorable Targets for Tenth Plan i. ii. iii. iv. v. Reduction of Poverty to 10% by 2006-07 and near elimination by 2012. All weather roads to rural habitation shaving population above 500 by 2004. Formation of 1.25 lakh Self Help Groups. Integrated Sanitary Complex for women in all Panchayats by 2003. Augmentation of water storage capacity of 12,618 village panchayat tanks through renovation. vi. Training to 63,044 local bodies elected representatives including SHGs & Official to improve skill and capacity building. vii. Programmes for accelerating the development process through special schemes like Village Self-sufficiency scheme etc.

viii.

Emphasis will be given for the maintenance of the assets created under various schemes.

Rural Development (PLANS)

Tenth Five Year Plan proposals The schemes / programmes proposed to be implemented during the Tenth plan period to achieve the above cherished objectives are: A. Centrally Sponsored Schemes I. Poverty Alleviation programmes

1. Swarnajayanthi Gram Swarozgar Yojana (SGSY) The magnitude of poverty and disparities that existed between the various social groups necessitated planned state intervention to provide succour and relief particularly to the disadvantaged and marginalised groups such as SC/ST, women etc. Keeping this in view and having regard to the positive aspects as well as deficiencies, the earlier self employment programmes like TRYSEM, SITRA, GKY, DWCRA, IRDP and MWS were merged and a new self employment programme viz., SGSY was launched w.e.f.1-4-1999.

viz., organization of the rural poor into Self Help Groups (SHGs), their capacity building, planning of activity clusters, infrastructure build up, technology, credit and marketing etc. The main objective of the programme is to bring the existing poor families above the poverty line. Among the rural poor, special emphasis will be given for the welfare of SCs/STs, women and disabled. The programme lays emphasis on organization of poor into Self Help Groups (SHGs) and their capacity building. The SHGs may consist of 10 to 20 persons. 4 to 5 key activities will be identified in each block based on the resource endowments, occupational skills of the people and availability of markets and these activities will be implemented in clusters. 10% of the SGSY fund will be set apart for training, wherein emphasis will be given for skill development through well designed courses. SGSY is a Credit cum Subsidy programme with the involvement of banking and financial institutions. The expenditure under SGSY is shared by the Centre and the

States in the ratio of 75:25. Subsidy will be provided at 30% of the project cost subject to a maximum of Rs. 7,500 and 50% for SC/ST subject to a maximum of Rs. 10,000. For groups, the subsidy is 50% subject to a ceiling of Rs. 1.25 lakhs. During the Tenth Five Year Plan under SGSY it has been proposed (i) To form 1.25 lakhs Self Help Groups benefiting 25 lakh women beneficiaries in rural areas. SGSY Methodology 1) Group Approach 2) Organisation of rural masses into self-help groups 3) Establishment of Micro enterprises 4) Training for improvement of skill and capacity building 5) Credit linkages 6) Market support Provision of infrastructure facilitybuild up, technology, credit and marketing etc. The main objective of the programme is to bring the existing poor families above the poverty line. Among the rural poor, special emphasis will be given for the welfare of SCs/STs, women and disabled. 2. Sampoorna Grameen Rozgar Yojana (SGRY) Creation of sustained employment opportunities for securing a minimum level of employment and income for the rural poor necessitated continuous need for special employment programmes. Keeping the above aim and to strengthen the need based infrastructure at the village level to boost the rural economy the erstwhile wage employment programmes JGSY and EAS were merged and a new scheme namely SGRY was launched from 15th August 2001. The main objective of the new programme is to provide additional wage employment in the rural areas as food security by creation of durable community social and economic assets and infrastructure development in rural areas. Towards this end the SGRY envisages distribution of food grains @ 5 kg per manday to the workers as part wages. While the cash component will be shared by the Centre and States in the ratio of 75:25, the Central Government will supply the food grains free of cost to the States. The scheme will be implemented in two streams. The first stream will be implemented at the District and Panchayat Union levels. 50% of the funds and food grains available under the

programme will be distributed between the District Panchayat and the Panchayat Union in the ratio of 40:60. The second stream will be implemented at the Village Panchayat level. The entire allocation under this stream will be distributed among the Village Panchayats through the DRDAs / District Panchayats. To augment the storage capacity of the tanks maintained by the local bodies towards increasing the availability of water for drinking, irrigation and other purposes it has been proposed to renovate one tank per panchayat under this scheme. During Tenth Plan, the State's share will be Rs. 303.80 crores. Rural Housing The aim of the State Government is to provide a dwelling for each family giving special emphasis to rural poor and deprived. The on going rural housing programmes will be given a new thrust. 1. Indira Awaas Yojana With a view to meeting the housing needs of the rural poor, Indira Awaas Yojana (IAY) was launched in May 1985 as a sub- scheme of Jawahar Rozgar Yojana. It is being implemented as an independent scheme since 1 January 1996. It aims at helping below poverty line rural households belonging to SCs/STs, free bonded labourers, widows of next- of kind of defence personnel, ex-servicemen and retired members of the paramilitary forces and also non SC/ST rural poor by providing them with grant-in-aid for construction of new dwelling units and upgradation of existing unserviceable kutcha houses. 3% of funds are reserved for the benefit of disabled poor below the poverty line in rural areas. The assistance ceiling for each house in plain area is fixed at Rs. 20,000/- and for hill/ difficult areas Rs. 22,000. In order to enable fire proof RCC roofed houses to be provided, the State Government provides additionally Rs. 12,000 per house as additional cost apart from its usual matching share to the Central grant. The expenditure towards provision of RCC roofing is met under Adi-dravida Welfare head. Therefore, the unit cost including sanitary latrine under this scheme is Rs. 32,000/- in normal terrain and Rs. 34,000 in difficult terrain. 80% of the IAY funds is earmarked for construction new houses and 20% is towards upgradation of unserviceable kutcha houses at the rate of Rs. 10,000/- per unit.

Credit cum Subsidy Scheme

The Credit-cum-Subsidy Scheme has been conceived for rural households having an annual income upto Rs. 32,000/-. Subsidy upto Rs. 10,000/- and loan up to Rs. 40,000/- from commercial or co-op. banks is provided to eligible households for construction of houses. Out of the total outlay of Rs. 9.15 crores, 25% share of the State Government will be Rs. 2.29 crores. The physical target under the scheme will be 914.

Rural Housing Schemes

Indira Awass Yojana - for below poverty line rural housing i. ii. iii. iv. v. Construction of New Houses. Upgradation of Unserviceable kutcha Houses. PMGY - to supplement the effort in rural housing. Credit cum Subsidy Scheme for rural households having Annual income<32000. Innovative Stream for Rural house& Habitat Development to popularise low cost technology and locally available materials.

Innovative Stream for Rural House and Habitat Development Scheme

This scheme intends to popularize low cost technology and usage of locally available materials in construction of buildings in rural areas. Innovative technology adopted for the rural house type design in the scheme are: (i) Rat-trap bond brick work, hollow blocks and soil stabilized cement mortar for construction of walls. (ii) Filler slab roofing using Mangalore tiles as filler material for roofing. (iii) Ferro cement / pre cast RCC doors, window, frame and shelter and (iv) Brick baf with plastering for flooring. Under this scheme free houses are constructed for the rural poor. Infrastructure facilities such as drinking water, drainage, street formation etc., are provided by dovetailing funds under other ongoing schemes in the habitations developed under this scheme. This scheme is fully

funded by the Government of India. The scheme will be taken up in the districts of Tiruvannamalai, Salem, Dharmapuri, Nilgiris, Nagapattinam, Tiruvarur, Theni,

Ramanathapuram, Sivagangai and Villupuram during the Tenth Plan at a total cost of Rs. 5 crores.

Pradhan Mantri Gramodaya Yojana (PMGY) (Rural Shelter Component) This scheme has been introduced by the Government of India under additional Central assistance for providing shelter in the rural areas to supplement the efforts in the sphere of rural housing considering the magnitude of the task. The guidelines of Indira Awaas Yojana are applied for this scheme also. 60% of the total allocation is earmarked for SC/ST beneficiaries. During Tenth Plan it has been proposed to construct 34,475 rural shelters with an allocation of Rs. 111.14 crores.

Pradhan Manthri Gram Sadak Yojana (PMGSY) The Pradhan Mantri Gram Sadak Yojana (PMGSY) is a Government of India Scheme introduced in the year 2000-2001 with the objective of providing road connectivity through good all weather roads to all unconnected rural habitations having population above 1000 by 2003 and all unconnected habitations having population of 500 and above by end of Tenth Plan period (2007). Under this programme the approved works are grouped into packages costing more than Rs. 1 crore but less than Rs. 5 crores and executed through tender system. The guidelines stipulate that district master plans would be prepared. A District Rural Road Plan is prepared for each district indicating the habitations in each block with the existing status of road connectivity. The scheme will be fully funded by the Government of India and an allocation of Rs. 750 crores has been proposed for the Tenth Plan, which will be shown under the chapter Rural Roads. Our financial programs support such essential public facilities and services as water and sewer systems, housing, health clinics, emergency service facilities and electric and telephone service. We promote economic development by supporting loans to businesses through banks and community-managed lending pools. We offer technical assistance and information to help agricultural and other cooperatives get started and improve the effectiveness of their member services. And we provide technical assistance to help communities undertake community empowerment programs.

We have an $86 billion dollar portfolio of loans and we will administer nearly $16 billion in program loans, loan guarantees, and grants through our programs. Rural Development achieves its mission by helping rural individuals, communities and businesses obtain the financial and technical assistance needed to address their diverse and unique needs. Rural Development works to make sure that rural citizens can participate fully in the global economy.

Programs Administered 1.Guaranteed loans. These are "lender-driven" programs, whereby business loans (generally made by commercial banks) receive a Federal loan guarantee. The guarantee is designed to support and incentivize rural business lending and to support rural job creation and retention. The primary program in this category is the Business & Industry (B&I) guaranteed loan program. 2. Direct loans. Direct loans are made to intermediary economic development groups who will in turn assist private rural business development through the re-lending of these funds. Note that the Agency does not make loans directly to for-profit businesses or individuals. 3. Grants to nonprofits & public bodies. Typically these grants are made to nonprofit economic development groups, towns, or tribes who will undertake some project in support of private rural business development.s 4. Grants to private rural businesses & agricultural producers. These grants are narrowly targeted and competitively awarded in support of value-added agricultural ventures and in support of renewable energy and energy efficiency projects. Matching funds from 50-75% are typically required.

Self- Help Group

It is a registered or unregistered group of micro entrepreneurs having homogeneous social and economic background voluntarily, coming together to save small amounts regularly, to mutually agree to contribute to a common fund and to meet their emergency needs on mutual help basis.

 The group members use collectively wisdom and peer pressure to ensure proper end-use of credit and timely repayment thereof. In fact peer pressure has been recognized as an effective substitute for collaterals.  One major advantage of the Indian SHg approach to micro finanace ist its reliance on the existing very large network of banks. Which are already legally and institutions able to mobilize deposits and make loans. The SHG system does not require new MFI ( microfinance institutions) which are slow and expensive to develop and whose competence and financial strength may be questionable.  The SHG system uses existing marketing channels, the bank , to bring formal financial services to a new market, namely the SHG itself, and these new intermediaries have to be developed.  In an ideal world, the banks would themselves be expected to take on this marketing channel development task, without any assistance.

List of some MFI in India

 ActionAid  Activists for Social Alternatives  AKRSP (Aga Kahn Rural Support Programme)  Annapurna Mahila Mandal  Asha Sadan  AWAKE (Association of Women Entrepreneurs in Karnataka)  Bridge Foundation  Canara Bank  CDF (Cooperative Development Foundation)  Childreach  Christian Children's Fund  Christian Children's Fund New Delhi

 Community Development Society  CUPCI (CU Promotion Committee)  Dharmapuri Women's Development Project  Evangelical Fellowship of India  Federation of Thrift and Credit Association  FWWB (Friends of Women's World Banking India)  Institute of Rural Management  Jeevan Jyoti  Kadamalai Vattara Kalanjia  Katch Mahila Vikas Mandal

WHO ARE THE CLIENTS OF MICRO CREDIT? i. The typical micro finance clients are low-income persons that do not have access to formal financial institutions. Micro credit clients are typically self-employed, often household-based entrepreneurs. ii. In rural areas, they are usually small farmers and others who are engaged in small income-generating activities such as food processing and petty trade. iii. In urban areas, micro finance activities are more diverse and include shopkeepers, service providers, artisans, street vendors, etc. Micro finance clients are poor and vulnerable nonpoor who have a relatively unstable source of income.

Access to conventional formal financial institutions, for many reasons, is inversely related to income: the poorer you are the less likely that you have access. On the other hand, the chances are that, the poorer you are, the more expensive or onerous informal financial arrangements. Moreover, informal arrangements may not suitably meet certain financial service needs or may exclude you anyway. Individuals in this excluded and under-served market segment are the clients of micro finance.

Financial needs of poor people In developing economies and particularly in the rural areas, many activities that would be classified in the developed world as financial are not monetized: that is, money is not used to carry them out. Almost by definition, poor people have very little money. But circumstances often arise in their lives in which they need money or the things money can buy.

In Stuart Rutherfords recent book The Poor and Their Money, he cites several types of needs: Lifecycle Needs: such as weddings, funerals, childbirth, education, homebuilding, widowhood, old age. Personal Emergencies: such as sickness, injury, unemployment, theft, harassment or death.

Disasters: such as fires, floods, cyclones and man-made events like war or bulldozing of dwellings. Investment Opportunities: expanding a business, buying land or equipment, improving housing, securing a job (which often requires paying a large bribe), etc.

MICRO FINANCE MODELS

I. Micro Finance Institutions (MFIs): MFIs are an extremely heterogeneous group comprising NBFCs, societies, trusts and cooperatives. They are provided financial support from external donors and apex institutions including the Rashtriya Mahila Kosh (RMK), SIDBI Foundation for micro-credit and NABARD (National Bank of Agriculture and Rural Development) and employ a variety of ways for credit delivery. Since 2000, commercial banks including Regional Rural Banks have been providing funds to MFIs for on lending to poor clients. Though initially, only a handful of NGOs were into financial intermediation using a variety of delivery methods, their numbers have increased considerably today. While there is no published data on private MFIs operating in the country, the number of MFIs is estimated to be around 800.

II.

Bank Partnership Model This model is an innovative way of financing MFIs. The bank is the lender and the MFI acts as an agent for handling items of work relating to credit monitoring, supervision and recovery. In other words, the MFI acts as an agent and takes care of all relationships with the client, from first contact to final repayment. The model has the potential to significantly increase the amount of funding that MFIs can leverage on a relatively small equity base. A sub - variation of this model is where the MFI, as an NBFC, holds the individual loans on its books for a while before securitizing them and selling them to the bank. Such refinancing through securitization enables the MFI enlarged funding access. If the MFI fulfils the true sale criteria, the exposure of the bank is treated as being to the individual borrower and the prudential

exposure norms do not then inhibit such funding of MFIs by commercial banks through the securitization structure.

III.

Banking Correspondents The proposal of banking correspondents could take this model a step further extending it to savings. It would allow MFIs to collect savings deposits from the poor on behalf of the bank. It would use the ability of the MFI to get close to poor clients while relying on the financial strength of the bank to safeguard the deposits. This regulation evolved at a time when there were genuine fears that fly-by-night agents purporting to act on behalf of banks in which the people have confidence could mobilize savings of gullible public and then vanish with them. It remains to be seen whether the mechanics of such relationships can be worked out in a way that minimizes the risk of misuse.

IV.

Service Company Model Under this model, the bank forms its own MFI, perhaps as an NBFC, and then works hand in hand with that MFI to extend loans and other services. On paper, the model is similar to the partnership model: the MFI originates the loans and the bank books them. But in fact, this model has two very different and interesting operational features:

(a) The MFI uses the branch network of the bank as its outlets to reach clients. This allows the client to be reached at lower cost than in the case of a standalone MFI. In case of banks which have large branch networks, it also allows rapid scale up. In the partnership model, MFIs may contract with many banks in an arms length relationship. In the service company model, the MFI works specifically for the bank and develops an intensive operational cooperation between them to their mutual advantage.

(b) The Partnership model This uses both the financial and infrastructure strength of the bank to create lower cost and faster growth. The Service Company Model has the potential to take the burden of overseeing microfinance operations off the management of the bank and put it in the hands of MFI managers

who are focused on microfinance to introduce additional products, such as individual loans for SHG graduates, remittances and so on without disrupting bank operations and provide a more advantageous cost structure for microfinance.

V. SHGs-Bank Linkage Model NABARD is presently operating three models of linkage of banks with SHGs and NGOs: Model 1: In this model, the bank itself acts as a Self Help Group Promoting Institution (SHPI). It takes initiatives in forming the groups, nurtures them over a period of time and then provides credit to them after satisfying itself about their maturity to absorb credit. About 16% of SHGs and 13% of loan amounts are using this model (as of March 2002). Model 2: In this model, groups are formed by NGOs (in most of the cases) or by government agencies. The groups are nurtured and trained by these agencies. The bank then provides credit directly to the SHGs, after observing their operations and maturity to absorb credit. While the bank provides loans to the groups directly, the facilitating agencies continue their interactions with the SHGs. Most linkage experiences begin with this model with NGOs playing a major role. This model has also been popular and more acceptable to banks, as some of the difficult functions of social dynamics are externalized. About 75% of SHGs and 78% of loan amounts are using this model. Model 3: Due to various reasons, banks in some areas are not in a position to even finance SHGs promoted and nurtured by other agencies. In such cases, the NGOs act as both facilitators and micro- finance intermediaries. First, they promote the groups, nurture and train them and then approach banks for bulk loans for on-lending to the SHGs. About 9% of SHGs and 13% of loan amounts are using this model.

Needs For Microfinance

i. Poor people need not just loans but also savings, insurance and money transfer services.

ii.

Microfinance must be useful to poor households: helping them raise income, build up assets and/or cushion themselves against external shocks.

iii. iv.

Microfinance means building permanent local institutions. Microfinance also means integrating the financial needs of poor people into a countrys mainstream financial system.

v. vi.

The job of government is to enable financial services, not to provide them. Interest rate ceilings hurt poor people by preventing microfinance institutions from covering their costs, which chokes off the supply of credit.

vii.

Microfinance institutions should measure and disclose their performance both financially and socially.

Review of literature:
Morduch. Jonathan & Haley.Barbara (Nov 2001) This Research is based on the effects of microfinance on Poverty Reduction in which all the things have the objective of the research done in the Canadian international development agency(CIDA) in which the social and economic impacts and the reaching the poorest and the cost effectiveness and financial sustainability wich the micro finance compares to inventions particularly. We have to know about the economic impact of microcredit on the poverty reduction . In this the impact on poverty to control on the poverty reduction to analysis the monitoring data base demonstrates. In this research there should be many secondary sources. IN this the Credit rather than savings and the insurances. We have to study about the savings and credit first. Although the analysis of the client characteristics and many credit. In this we have to study in the gamin and many other issues for the povrty reduction many comparative strength and weakness of the microfinance vs other development tools should be discuss all the factors.

Dr. Vaessen.Jos, L. Leeuw. Frans,

Bonilla .Sara, Rivas .Ana,

Lukach.Ruslan,

Bastianensen .Johan, Holvoet .Nathalie(July 2010) In this article many research done to the area of micro finance and many microfinance

institution to gave the household impact done for the alleviation in this article dr.Jos have 2 introduce many micro credit schemes and many share characteristics that target the poor all the methodology quality and the impact on the microcredit have been done contested in this there should be the objective related to the womens control aver household spending in the developing countries in which the studies have been to introduce the design over analysis based to the randomized design and quasi experimental designs regression bases approaches and many types of interventions ans type of outcomes measures have been seen to invented to the data analysis and many things they can done while research.

S. Maheswaranathan and F .B.Kennedy(May 2009) In this article and the research the micro credit program on the eliminating economic inventions at been done to be finances by the organization are most of the relationship between the distribution and the division of where the research have to be done in which the 50 self administrated questionnaires have been done to know the micro credit programs to be extended this have to be done in many year i.e 1995 ,1997 ,2000 and many years about the vicious cycle of the poverty and many more micro credit to small loans for the people who can need for the money for the self employment projects thats generate incomes or for urgent family needs fulfill by the micro credit institution .some scheme provide loan which also include the poor people to help them. Women livelihood option have been limited. Which many things have been done to utilize this recourses have been done in the economist academics and the research have been done that even though have to done the recourses. That an impressive literature has been done.

By Holvoet. Nathalie, Leeuw . Rivas This article clearly tells us about the effect of microcredit on womens control over household spending in developing countries. Over the past years the micro credit activities were not so important in INDIA. But from past ten years it has evolved In a great way. Current estimates vary between 133 and 190 million microfinance borrowers worldwide. In this study the focus is only on microcredit activities, constituting the bulk of microfinance activities across the globe,

and its effect on income, expenditure smoothing, and poverty alleviation effects; business growth and employment effects; schooling effects; and effects in terms of womens empowerment.The main assumption is that by providing credit to poor women, their direct control over expenditures within the household increases, with subsequent implications for the status of women and the well-being of women and other household members.

Dr. Singh. Swayamveer , Pathak .Vishwanath , Anant Kumar Mishra , Singh.Dileep , Kumar.Vijay , Misra.Kanti(2007) Micro-finance interventions are well-recognized world over as an effective tool for poverty alleviation and improving socioeconomic status of rural poor. Micro-finance through the network of cooperatives, commercial banks, regional rural banks, NABARD and NGOs has been largely supply-driven and a recent approach. Micro-finance institutions are, other than banks, are engaged in the provision of financial services to the poor.This study also tell us the role of SHGs in the development of micro credit in INDIA. And what is the status of Scheduled Castes in INDIA, how they are discriminated, their major problems. To make their condition better the main idea is to strengthen them by empowering the SC womens, by providing credit to poor women, their direct control over expenditures within the household increases, with subsequent implications for the status of women and the well-being of women and other household members by giving them special plans of micro credits. And for this purpose the SHGs role is very important, their efforts, and the requirements also. And the impact of micro credit is very huge on the condition of SC people.

Dingcong, A. Orbeta, and E. Capones (September 2007) In this study focus on the rural poor household and socioeconomic status of women in the developing countries that is Bangladesh, Philippines, and Uzbekistan. It represents the three of the five operational regions of Asian Development Bank (ADB) for microfinance projects. The study used quantitative tools to measure the impact of microfinance on rural households for the Rural Microenterprise Finance Project in the Philippines. It designed nationwide survey was conducted covering 2,274 households in 116 barangays (villages) and 28 microfinance

institutions. A total of 27 focus group discussions were undertaken in three countries. Over 200 female microfinance clients participated in these discussions. Sample surveys covered 566 women microfinance clients in the Philippines and 200 in Bangladesh. Two types of household respondents were covered by the surveys: (i) households that received microcredit loans, and (ii) households that did not receive microcredit loans but qualified to join the program. The finding suggests that targeting microfinance on the poorest households may not be the most appropriate way to help them escape poverty.

Consol Torreguitart-Mirada(July 2010) In this study consider the effects of microfinance in the developing countries. Develop the self employment project for the women who started micro business with limited access to credit having benefit from the microcredit program. In this research project did the study of impact of micro business which started by women entrepreneurs with the help of micro loans. Qualitative approach used in this study which includes the women clients of three different micro finance institutions that based in Cataalonia. Findings analyzed with the help of women micro entrepreneurs, to their entrepreneurship experiences, and to the MFIs granting their loans are regarded as indicators of the personal and family impacts, of their professional lives and of the social impacts of Microfinance.

Roth .James, 1997 This study takes issue with claims made by range of development agencies and practitioners that micro credit is, or could be, a panacea for rural development. According to this study innovative Development Finance Institutions (DFIs) have begun to provide micro loans to the rural poor. Credit is only one ingredient in the mix of factors necessary for a successful enterprise. To respond to a potential demand for a good or service, a rural micro-entrepreneur may need access to one or more of the following: transport, communications, power, water, storage facilities, a legal system for enforcing contracts and settling disputes, etc. If one of the aims of rural development is to assist the poorest of the poor, then micro credit is not always the most appropriate intervention. Micro credit schemes often treat the symptoms and not the causes of

poverty. Poverty is frequently the result of powerlessness. This study concludes that lack of recognition of the limitations of micro credit schemes may have unfortunate consequences.

G.Copestake.James, Duvendack.Maren, .Richard, Nitya Rao ( October 2010)

Hooper.Lee,

Loke.Yoon , Palmer Jones

This literature talks about the A common feature of microcredit has been the targeting of women on the grounds that, compared to men, women both perform better as MFI clients and that their participation can have more desirable development outcomes. They have addressed the micro-credit component of What is the evidence of the impact on family well-being of giving economic resources (e.g. microcredit, cash or asset transfers) to women relative to the impact of giving them to men? , in addition to , What is the evidence of the impact of micro-credit on the incomes of poor people?. They have taken observational (qualitative & quantitative)data to analyze the study. They have use the method of Propensity Score Matching (PSM) to get the desired results for the study . the study has revealed that it is more beneficial to provide micro credit to women as the most of the facts have proved it.

Goldberg .Nathanael (December 2005) The findings of this study are studies strongly suggest that microfinance works better for the poorest than the less poor. Second, there is strong evidence that female clients are empowered, though the data on increased adoption of family planning is less clear. Third, society-wide benefits that go beyond clients families are apparently significant which is a tantalizing possibility when we hear that roughly 92 million families (composed of 450 million people) are now being reached, Fourth, even in cases when women take but do not use the loan themselves, they and their families benefit more than if the loan had gone directly to their husbands. They have used observational method of study in which he has compared people having used micro credit with those who havent taken micro credit.

Buckley, G. (1996) Microenterprises in the informal sector in Kenya, Malawi and Ghana. It seeks to provoke critical reflection on the uncritical enthusiasm that lies behind much

proselytizing of Micro-Finance for informal sector microenterprise. It questions whether the

extensive donor interest in microenterprise finance really addresses the problems of micro entrepreneurs or whether it offers the illusion of a quick fix. It suggests that the real problems are more profound and cannot be tackled solely by capital injections but require fundamental structural changes of the socioeconomic conditions that define informal sector activity and a fuller understanding of the ''psyche'' of informal sector entrepreneurs Livermore, M. (1997) Microenterprise development by social workers as a social

development strategy. The origins of microenterprise development are reviewed, both as a social development strategy and as a social work intervention. By providing an implementation framework that addresses psychological, economic and social components, the author argues that social workers are ideally placed to design and participate in these programs. A number of issues that affect social work involvement in the field are discussed.

Evans, T. G., A. M. Adams,. (1999)M icr o- Cr ed it schemes as a means of poverty alleviation, their accessibility to the poorest is of obvious concern. This paper examines a targeted Micro-Credit program in Bangladesh to assess its coverage among the poor, and to identify program- and client- related barriers impeding participation. Rates of participation in Micro-Credit are higher among poorer households. Multivariate analysis identifies lack of female education, small household size and landlessness as risk factors for nonparticipation, based on a 7% random sample of this population. The implications of these findings for poverty alleviation policies and programs are discussed.

Aghion, B. A. and J. Morduch (2000)Micro lending is growing in Eastern Europe, Russia and China as a flexible means of widening access to financial services, both to help alleviate poverty and to encourage private-sector activity. We describe mechanisms that allow these programmes to successfully penetrate new segments of credit markets. These features of non-refinancing

include direct monitoring, regular repayment schedules, and the use threats. Rosengard, J.K et al. (2001)

The Bank Rakyat Indonesia (BRI) unit system is

recognized as one of the largest and most successful Micro-Finance institutions in the world. Indonesia has been more drastically affected by the East Asian monetary crisis than other

countries in the area. It is therefore worthwhile looking at the BRI experience during the crisis-not only the experience in microenterprise credit, but also in small, medium and corporate credit and in savings mobilization. Snow, D. R. and T. F. Buss (2001)Micro-Credit is a concept that has gained widespread acceptance by international development agencies and major donors. It is viewed as a way to correct both governmental and market failure in Sub-Saharan Africa. Many view MicroCredit as a method for linking the formal and informal sectors of African economies to increase the reach of the formal sector. Extending the reach of the formal economy through MicroCredit is possible, and desirable, depending on macroeconomic reforms, respect for traditional financing relationships, and local control of institutions. Bhatt, N. and S. Y. Tang (2001)Three major controversies in the Micro-Finance field: vehicles, technologies, and performance assessments for financial service delivery. Then it proposes that these controversies be resolved by a perspective emphasizing institutional plurality and external and internal efficiencies for individual programs. Questions for

further research are discussed in the conclusion. Pretes, M. (2002) T he work of the Village Enterprise Fund, an US nongovernmental

organization, in East Africa as a case study in "equity" based Micro-Finance in low-income countries. Many small businesses established in high-income countries rely on some form of equity capital to fund the startup phase and much of the growth of the business. The success of startup grants and equity financing in high-income countries suggests that this method might also be applicable in low- income countries. McKernan, S. M. (2002) and noncredit services Micro-Credit programs provide a two-tiered approach to poverty

alleviation: credit for the purchase of capital inputs in order to promote self-employment and incentives. These noncredit aspects may be an important

component of the success of Micro-Credit programs. However, because they are costly to deliver and their contribution to the success of the programs is difficult to measure, they may not be properly valued. This paper uses primary data on household participants and nonparticipants in Grameen Bank and two similar Micro-Credit programs to measure the total and noncredit effects of Micro-Credit program participation on productivity.

MkNelly, B. and M. Kevane (2002) We summarize lessons learned by a credit program for women in Burkina Faso. Three observations are made regarding program design: (a) high membership turnover means mutual guarantee groups should be smaller and more central to non-repayment penalties; (b) high turnover in economic activities implies more training in best practices and more variety and experimentation in credit and savings mechanisms; and (c) high degrees of stocking activity suggests the need to develop instruments to mitigate commodity price risk at the individual and program level Cohen, M. and K. Wright (2003) The Micro-Finance agenda is increasingly market-driven and, therefore, client-focused. The renewed interest in clients is driven by the industry's concern over competition and drop-outs. This increasing awareness that the customer matters has led MFOs to be more attentive to who their clients are, learning how they use financial services and identifying appropriate products and services that better match the customer's preferences. However, market-led Micro-Finance is not limited to products. For institutions to better serve their clients, organisational restructuring may be required to ensure that their systems and modes of Micro-Finance delivery are more client-responsive.

Johnson, S. (2004)

The direct impact of Micro-Credit provision on users to examine

whether Micro-Finance institutions (MFIs) have had wider impacts within the local financial markets in which they are operating. It considers the potential for both competition and demonstration effects on other financial providers. The paper concludes that changing macroeconomic conditions have been the main driver increasing competition for middle and lower income clients and that few competition or demonstration effects resulting from the MFIs are in evidence Weber, H. (2004) The rise of the 'new economy' in many of the advanced capitalist states since the 1970s has entailed a re-organization of global social and political relations generally. These changes become apparent in analyses that focus on trends and shifts in the global political economy. In the context of these adjustments, discourses of 'poverty reduction' have come to prominence, with a particular financially steered strategy emerging

as a key approach to 'poverty reduction' on a global scale, namely Micro-Credit. I argue that the Micro-Credit approach to poverty reduction is strategically embedded in the global political economy. Johnson, S. (2004) The role of institutions-rules and norms-in markets is increasingly recognized in development discourse. This paper considers the role of gender relations for rules and norms in financial markets. Using evidence from Central Kenya it develops a framework for establishing the influence of gender on the demand for and access to financial services, so explaining the gender differentiated associations (ROSCAs). use of rotating savings and credit

Akula, Vikram (2007-08) , In this study he states that the demonstrating why he was chosen as one of Time magazines 100 most influential people in 2006, described how his company empowers the poor and spurs economic development in rural India by providing them with small business loans rather than a handout. He told the story of one of SKS first borrowers, a woman who lived in a remote village in India and earned, along with her husband, about $2 a day. Their 12-yearold son had been forced into bonded labor in order for the family to eat. The woman borrowed $20 from SKS to buy vegetables to sell. After paying off her initial loan, she went on to borrow more money to lease fruit trees and later purchase fishing nets for her husband and his friends. Today she sells vegetables, fruit and fish, and her son is no longer an indentured servant.

Sharma, Rakesh (2009) Poverty is an evil. It's the creator of so many socio-economic problems. A hungry man can go to any extreme. Eradicating world poverty is the greatest challenge of our age, and the freatest weapon we have to fight poverty is knowledge. We can not afford to have poor people around. India is said to be the home of one third of the world's poor; official estimates range from 26% to 50% of the more than one billion population.About 87% of the poorest households do not have access to credit. We would like to state that- it is time to recognise that in this unified world poverty is our collective enemy. we must fight it because it is morally repugnant, and because its existence is like a cancer- weakening the whole of the body not just the parts directly affected.

We have to do something for the people who are at the bottom of the pyramid. One answer to this problem is Microfinance. We have started a research on this field so that more and more information can be gathered on the subject which can further be used to frame certain policies or any other step can be taken.

Akula , Vikram 2009 The co. dont believe we are creating new demand among poor Indians but rather, that we are catering to an unmet demand that already exists. And even if the demands of the poor are being met, they usually have to pay a pover- ty premium, meaning higher prices for everything fromwater to consumer goods. Our collaborations with part- ners like Metro give our borrowers access to quality goods and services at fair prices they deserve.Weve had great success with a micro-insurance product through Bajaj Allianz that we offer to our borrowers. We initially talked to our borrowers and found that they wanted insurance policies with weekly installments of Rs 20.

Ujjivan Financial Service, 2010 Ujjivan Financial Services has entered agriculturally advanced Punjab to provide micro-credit to women of the state with the objective of reducing the economic disparities and to cover the areas which have remained deprived of access to financial services till date. Punjab has a large number of big cities & towns along with the presence of large number of needy working women. Ujjivan has started its Punjab operations with two branches in Bhatinda & Abohar. Though Punjab ranks very high in the poverty index as against the Indian average, there are large sections of the society who are underprivileged and struggling with poverty. Ujjivans expansion into Punjab is not an ad hoc decision but has been done after a detailed and meticulous feasibility study of microfinance in Punjab by a multidisciplinary team in Nov Dec 2009. A pioneer and leader in the urban microfinance space, Ujjivan Financial Services entered Punjab with an objective to serve poor who have so far been paying surprisingly high interest rates of 5-20% per month. People of Punjab are very hard working but the high cost of credit becomes bottleneck to their efforts in the business.

Sayma Rahman, (2010) This paper investigates the consumption behavior of borrowers of two major microcredit institutions in INDIA and compares that with non-borrowers. Primary data has

been collected from borrowers of the Grameen Bank and INDIA Rural Advancement Committee (BRAC) operating in three major districts in INDIA. Along with borrowers, non-borrowers data has also been collected from non-program village to avoid endogeneity. Control-group method (non-borrowers from non-program villages) has been used to compare the differences in consumption patterns between the two groups. This study analyses the impact of per capita monthly expenditure and other household characteristics on the budget share of eleven items (food and non-food) consumed by borrowers and non-borrowers. Results from the estimation on linear and quadratic model suggest that borrowers of microcredit programs are better off in terms of consumption than non-borrowers. Masahiro Shoji. 2010 Microfinances in INDIA introduced a contingent repayment system beginning in 2002, which allowed rescheduling of savings and instalments during natural disasters for affected members. This paper is one of the first attempts to evaluate the system employing a unique dataset. In using evidence from a flood in 2004, the author found that rescheduling plays the role of a safety net by decreasing the probability that people skip meals during negative shocks by 5.1 per cent. This effect is even higher on the landless and females. This study attempts to contribute to the issue regarding the poverty reduction effect of microfinances.

Sayma Rahman,2010. Microcredit program in INDIA provides small loans to rural people especially to women with the purpose of eradicating poverty. This study investigates the impact of microcredit on consumption pattern of borrowers and compares if the impact is the same for non-borrowers. Primary data has been collected from the Grameen Bank and the INDIA Rural Advancement Committee (BRAC) borrowers of some selected villages from three major districts in INDIA. Data of non-borrowers are collected from the same cohort to provide a control group for comparison with borrowers. To estimate the impact of per capita monthly expenditure and other household characteristics on budget share of items consumed by borrowers and nonborrowers the study relies on An Almost Ideal Demand System (AIDS) model. The estimated results of Iterative Seemingly Unrelated Regression (SURE) suggest that borrowers of

microcredit programs are better off in terms of consumption of most of the food and non-food items compared to non-borrowers.

RESEARCH METHODOLOGY
a) Research Type- Descriptive Research b) Data Collection Tools; i. Secondary Data: With the help of websites of various banks and Govt. websites, magazines, news-papers etc. ii. Primary Data: By direct interaction with clients and with help of questionnaire.

a) Sampling Technique: Convenience sampling b) Sampling Unit: Jalandhar region (Rama mandi, phagwara, chehru, paragpur) a. Sample Size:150 Respondents c) TOOLS USED FOR STUDY: Questionnaire d) TECHNIQUES OF ANALYSIS: -Quantitative: MS-Excel