Posts Tagged ‘credit’
Micro Loan Role In India
April 6, 2011 | 
Author The role of Micro loans in India: A boon
Most people have heard of Micro finance and micro loans in India, but very few actually give serious thought to it. The truth is that micro loans have changed the way the rural community lives. Once upon a time, someone from a low- income background without any verifiable credit history couldn’t dream of getting a loan fro a bank, but due to government initiative the person can have access to a micro loan without any collateral. Poor disadvantaged people can now set up small cottage industries and earn a decent living for themselves and their families. That is the case in Krishnakari in Tamil Nadu.
With the help of the Mahalir Sangam, a Self Help Group initiative by the state and central government, the economic condition of the people of Krishnakari is changing. Many SHG’s have been formed with the help of the money got from micro loans and poor women and men are earning a livelihood as employees. One such success story is of an SHG which sells ‘Chapatis’. With a micro loan of Rs 22,000 from a Micro Financing Institution (MFI), this SHG started a smart Chapati- making service. They even bagged an order for making 3000 Chapatis for TVS employees everyday. The SHG has not only repaid the micro loan fully, but are making a decent profit as well.
The role that micro loans in India have played is truly commendable. As awareness about micro loans grow, so does the rural economy.
Posted in Microloans In India | 
Tags: bank, credit, loan, Loans, Mahalir Sangam, Micro Finance, micro loan, Micro Loan In India, micro loan india, micro loans, Self Help Group, SHG | 
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SHG’s Benefitting From Micro Loans
How SHG’s can benefit from Micro loans in India
The concept of Self Help Groups or SHG’s in India was started with the motive of poverty alleviation of disadvantaged people. Community participation is what SHG’s depend on. When the community participates in creating wealth, it ensures that the profits are equitably distributed. This has worked extremely well for the rural poverty stricken community of India. NABARD introduced Micro Finance or Micro loans to help SHG’s way back in the 90’s of the previous century.
The government of India with the help of NABRD made sure that such SHG’s were developed in as many villages as possible, keeping the requirements of people, especially women in mind. The idea was to empower them, create a feeling of community and meeting the financial requirements of those who participated. The response has been overwhelming. Not only have the rural women displayed wonderful entrepreneurship skills, they have also helped in the creation of jobs for other people in their community.
Micro loans in India were started as a scheme to help SHG’s get credit. Regular loans would not have done anything because these people were not considered credit- worthy by mainstream banks. A micro loan could be anything from a few hundred rupees to one lakh rupees and availing it was easy and required no collateral. With such micro loans, an enterprising individual can easily set up a small scale, home- based business. Truly, micro loans in India came as a boon to financially disadvantaged people and have ushered in a rural revolution.
Posted in SHG's In India | Tags: credit, loan, micro loans, Microloans in India, Self Help Groups, SHG | No Comments »