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SECTION 3

GROUP MEMBERS
SOMYA SINGH 1
PALLAVI SHALLAM 3
VAIBHAV CHOUDHRY 5
NEERU RAMINA 11
MOHIMA GHOSH 12
PARIDHI MAHENDRA 21
NISHANT BANGAR 28

SHALINI CHANDRA 33
CHECHIN NOKREK MARAK 38
ABHISHEK DATTA 46
CHERAG GANDHI 49
AKSHIT GARG 58
HIMANSHU SAJLAN 63

INTRODUCTION

FINANCIAL EXCLUSION REMAINS A MAJOR CHALLENGE FOR INDIA.


40% OF THE POPULATION IS STILL OUTSIDE THE FOLD OF FORMAL BANKING IN THE COUNTRY.
THERE ARE WIDE DISPARITIES IN RURAL AND URBAN POPULATION AS WELL AS WITHIN DIFFERENT
GEOGRAPHIC REGIONS.

BANK BRANCHES IN NORTHEAST

CREDIT QUALITY

NORTHEAST HAS A SMALL ECONOMY AND HENCE BANK CREDIT IS LIKELY TO BE LOW.
THE CREDIT/SGDP RATIO IS VERY LOW, WHICH MEANS THAT CREDIT SUPPLY IS NOT EVEN
COMMENSURATE TO THE EXISTING ECONOMY SIZE OF THE NORTHEASTERN STATES.

NORTHEASTERN STATES HAVE THE LOWEST CREDIT/SGDP RATIO OF LESS THAN 20%.

CREDIT-DEPOSIT RATIO
THE CREDIT DEPOSIT (C-D) RATIO IN NORTHEAST IS LAGGING FAR BEHIND THE REST OF THE COUNTRY.
NORTHEASTS OVERALL C-D RATIO OF 35.8% IS LESS THAN HALF OF THE COUNTRY AVERAGE OF 72.6%.
IT IS CLEAR FROM THE CRITICAL BANKING INDICATORS THAT THE NORTHEAST IS THE MOST FINANCIALLY
EXCLUDED REGION IN THE COUNTRY. WHETHER BECAUSE OF UNEVEN BANKING INFRASTRUCTURE,
GEOPOLITICAL RISKS, POPULATION DENSITY, OR SOME OTHER FACTORS, ECONOMIC GROWTH HAS
SIMPLY NOT TAKEN OFF IN THE NORTHEAST.

DEMAND FOR MICROCREDIT IN THE NORTH-EAST


REGION
Arises from financial requirements of low income households.
The north-eastern region has been underserved till date.
The demand for microcredit has been estimated on the basis of dwelling units.
Dwelling units are classified on the basis of material used for construction of roofs- grass, thatch,
bamboo, wood, mud, plastic, polythene, tiles, slate.

The dwelling units were selected on the basis of economic status.

ASSAM

MANIPUR

MEGHALAYA

TRIPURA

NAGALAND

ARUNACHAL PRADESH

MIZORAM

SIKKIM

MICRO CREDIT DEMAND FOR THE REGION

MICRO CREDIT SUPPLY CHANNELS


DIRECT LENDING BY COMMERCIAL BANKS
SHG BANK LINKAGE MODEL
DIRECT MICROFINANCE BY MFIS
INDIGENOUS INSTITUTIONS

INDIGENOUS INSTITUTIONS
NAMGHARS AND PUJAGHARS- ASSAM
MARUPS MANIPUR
SONCHAY, SOMOBAY, SAMITI & GOT ASSAM
SHINGLUPS- MANIPUR
MAHARI ASSOCIATIONS MEGHALAYA

CREDIT SUPPLY ESTIMATION


Vision

Over one third of northeasts low-income households will have access to

financial services in a dignified and transparent manner by 2015. The financial


services will be

Provided by a multitude of professional, people-oriented and viable institutions

to give the people of northeast an opportunity to improve their standard of living


and enabling them to contribute to and benefit from the india growth story.

CREDIT SUPPLY ESTIMATION


The supply of credit has been estimated based on the two major channels of credit i.E. The shg-bank linkage and

direct microfinance. While there are also indigenous institutions providing credit facilities locally, due to lack of
data it is difficult to ascertain its size.

Shg-bank linkage: shgs have been linked to commercial banks, rrbs as well as cooperative banks. The total supply of
microcredit for the north east through shgs bank linkages was at rs 4.69 billion as of march 2009.

Direct microfinance by mfis: while there are a few mfis operating in the northeastern states, their contribution to the
overall supply is still small. The available data indicates that the total supply from the MFI channel is close to rs1.15
billion. Of this sum, the majority is concentrated in assam and manipur.

CURRENT STATUS OF FINANCIAL INCLUSION

FINANCIAL INCLUSION VISION BY 2015

TARGET OF GROSS LOAN PORTFOLIO BY


2015 TO ACHIEVE THE DESIRED OUTREACH

MICROSAVINGS

MICROSAVINGS POTENTIAL ACROSS


STATES (RS MN)

MICROINSURANCE
Microfinance institutions typically provide life insurance to their clients and their spouses by acting as
agents for mainstream insurance companies.

In some cases, they also provide health insurance. Data indicates that mfis are able to provide insurance
coverage at an annual premium of rs10 per rs1,000 sum insured.

Assuming that an aggregate insurance cover of the total microfinance demand is required, the insurance
premium potential for the northeast region is rs 230-380 million of which an insignificant portion has been
tapped to date.

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CENTRE FOR MICROFINANCE &


LIVELIHOOD (CML)

RASHTRIYA GRAMEEN VIKAS NIDHI (RGVN)


NGO support programme

Reinforcing livelihood systems of poor people who have little or no


access to mainstream assistance

Promote, nurture, and develop ngos


RGVN provides financial support to ngos by way of

Returnable grants/revolving fund for livelihood activity


Grants to meet programme support
Institutional development costs of the NGO
Managerial support

NGO-MF

Ngos evolved to handle larger credit


RGVN takes the credit risk to work with these ngos with borrowed
fund and grooms them into sustainable mfis

Nabard

NEDFi: North Eastern Development Finance Corporation


Apex development bank
Ltd.
Incorporated under the Companies Act, 1956, in 1995
Facilitates credit flow for promotion &
with its registered office at Guwahati
development of agriculture, SME, cottage,
Development of industries, infrastructure, animal
handicrafts & rural crafts
husbandry, agri-horticulture plantation, medicinal
Support economic activities in rural areas
plantation, sericulture plantation, aquaculture, Jointly
promoted by IDBI, ICICI, SBI, IFCI, SIDBI, UTI, LIC and GIC
Sustainable rural development & secure
After the creation of DONER it came under control of
prosperity of rural areas
Ministry
Key stakeholder for provision of northeast
Catalyzing the economic development & financing MFIs
microfinance vision 2015
and also organizing capacity building programmes for
them
Sidbi
Friends of Womens World Banking - India (FWWB-I)
Apart from the zonal office SIDBI has branch
Institution Building, Capacity Building, Monitoring and
offices in each of the eight northeastern states,
Assessment Services for Micro Finance Institutions,
these are located in agartala, aizawl, dimapur,
Community Based Organizations (Federations,
gangtok, guwahati, imphal, itanagar and shillong
Cooperatives, Producer Companies), Enterprises
Poverty alleviation, enhancing and introducing livelihood
Significant presence in the northeast
activities for women
Spurred the growth of microfinance at national
Lending to poor women clients, to enable them to get
LEVEL
better access to:
Solar Energy
CATALYZING GROWTH OF MICROFINANCE IN
Water and Sanitation Facilities
NORTHEAST
Education Loans & Financial Literacy
Health and Hygiene Awareness

(iv) Commercial Banks

Several Commercial Banks but SBI is the biggest bank in outreach.


Private sector banks are also now expanding in northeast.
Regional rural banks and cooperative societies are also key stakeholders.
They are chief sources of fund for MFIs and SHGs and hence are indispensable stakeholders.

(v) Consultants
Key role in providing technical support, mentoring support,developing products,systems and
processes,research, studies and assessments for maintaining standards and transparency.
M2i Consulting, Intellecap, Microsave etc which can play a role in Northeast.
IT and technology consultants will also have a role in making available affordable technology
solutions for the northeastern MFIs.
(vi) Government
Both the state and central government will play a critical role in designing a conducive framework. The
national and statutory authorities can really help create a favourable system that welcomes donor
funding, minimizes interference, and creates a facilitating regulatory environment.

(vii) SHPIs and MFIs

SHPIs groom SHGs which ultimately deliver financial services.


These SHPIs are several NGOs operating in all the states of northeast.
MFIs provide financial services directly to the clients.
Major MFIs: RGVN-CSP, ASOMI, IIRM, Bandhan, Prochesta, Youth Volunteers Union (YVU), Volunteers for
Village Development (VVD), NEREFS and UNNACO.

(viii) Donors
Donors facilitate and enable:
Capacity building and creating infrastructure for the MFIs
Overcoming the initial loss phase and other financial needs
(ix) Academic institutions
Universities such as Indian Institute of Banking and Management, Guwahati University, Assam University,
Assam Agriculture University, Dibrugarh University, Tezpur University.
Management Colleges Such as Assam Institute of Management, School of Management Studies (Assam
university), Darwin School of Business, Centre for Management Studies (Dibrugarh) etc.

THANK YOU