Posts Tagged ‘micro loans’
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 | 
No Comments »
Micro Loan Repayments
How micro loans have made entrepreneurs out of supposedly simple rural people
The truth about human beings is that everyone is a born entrepreneur. Everyone has the desire of doing something on his own, but few people actually get the chance to do it. The problem is obviously money. Poverty in a third world country like India had become a vicious cycle; a trap that promised to kill whoever dared to cross its path. The poor people had all the initiative in the world, but where would they get the money to do anything? This is the premise which made Professor Mohammad Yunus start the Grameen Bank of Bangladesh in making micro loans available to economically- disadvantaged people. India borrowed the example and developed MFIs to give out micro loans to mainly rural women, though men were not left out.
A micro loan can do wonders for a person belonging to a low- income background. As said earlier, poor people don’t lack the initiative, all they need is the money. Once they got hold of micro loans, they had the freedom of starting their own small home- based businesses. Women engaged themselves in making stuffed toys, pickles, detergents, soaps, chapattis, etc. while men set up small shops or started a woodworking business.
Micro loans in India mark a turning point. The supposedly simple rural folk with nothing to show on their resumes became entrepreneurs. Their success can be easily measured by the 97% repayment of micro loans MFI’s in India have calculated. With micro loans in India, it’s been success all the way!
Start Up A Business With Micro Loans
How to start a business with a Micro Loan in India
For people from a low- income background, availing a micro loan in India is really easy. Whether one wants it to start a business or spruce up an existing one, a micro loan can be really useful. The easy installment and repayment methods of micro loans in India make them a wonderful option for impoverished people looking for the right business break.
The first step is to get a micro loan. For this, going to a Micro Financing Institution or MFI is important. Telling the representative of the MFI exactly why one needs a micro loan and submitting a proper business plan is necessary. The terms of repayment also need to be finalized. It is okay for the person not to have any verifiable credit history as that is the beauty of micro loans. It enables people from the poor rural community to avail them and start their own businesses.
Once a micro loan is got hold of, a business needs to be started. For this, one has to rely on one’s own skills and abilities. For instance, a woman who has had training in making cane furniture and artifacts would do great by starting a small business making and selling cane articles.
It is important for a business to have publicity. One not only should produce goods, but sell them as well. A good idea would be to spend weekdays at producing goods and weekends selling them at the local market.
A great idea is to employ other people in the business.
Micro Loan Success In Jharkhand
Women in Jharkhand become self- dependent with the help of micro loans
Micro loans in India have helped pave the way for empowerment of women throughout the country. Success stories from far- flung villages of India have made micro loans the buzzword in rural economy. At one time, these women had nothing to do except household work and looking after children. But now they are starting businesses and helping their own families economically and also employing other people as well. A small village called Gumla in Jharkhand has a success story that speaks highly of what micro loans and Self Help Group (SHG) initiatives have achieved so far.
Gumla is a tribal village with mostly economically – disadvantaged people. The district administration gave women from this village training in a variety of vocations such as making of soaps, pickles, detergents, and phenol. The training went on for 15 days after which they were given the option of being able to avail of a micro loan. Most women who underwent the training started their own home- based businesses or joined another SHG and started earning their living. One of the women is Nita Kumari who has joined an SHG and she makes pickles everyday. She is happy that she has been able to improve her family’s condition a lot.
Micro loans have actually enabled people like Nita Kumari to actually do something on their own and become self- reliant. Perhaps more than the money is the self- confidence that a micro loan can give to these simple folks.
Posted in Micro Loan Success Stories | Tags: gumla, home based business, jharkhand, micro loan, Micro Loan Success, micro loans, Microloan, SHG | No Comments »
Why Micro Loans
Why giving Micro Loans is better than dole- outs in India
Micro financing and micro loans in India have come a long way since the government started such initiatives way back in the 1990’s after the example set by the Grameen Bank of Bangladesh. Various programs such as the Swarnajayanti Gram Swarozagar Yojana were started to help people from low- income families to start Self Help Groups (SHG’s). SHGs’ are meant to act as initiatives where not only disadvantaged people can help themselves earn a living, but also help similar people from their community do so. It helped foster a spirit of team wok among people. All this has been made possible because of micro loans.
The reason why micro loans are a lot better than dole- outs is because it helps in building self confidence. Rural people without any land or property often have to wait for days for work. They are impoverished and have difficulty in providing for their families. Giving them free food, blankets, clothes and even money may help for the time being, but it will do nothing for their long- term finances. A micro loan on the other hand, makes them feel that a financial institution actually holds them in high esteem. Micro loans help them understand that they have the abilities and skills required for setting up a SHG and running their own business. This is perhaps the reason why repayment of micro loans is at such a high in the country.
Truly, poor people work better with a micro loan than a dole- out.
Benefits Of Micro Loans In India
What are the benefits of Micro Loans in India?
Whatever positive things that are said about what Micro loans have done in India does not really match what they have done in actuality. The empowerment of rural women is a huge benefit micro loans have caused. But there are other benefits worth mentioning as well.
The fact that a micro loan is not a hand- out is something that should be talked about. Giving out food, blankets and money to the poor is a noble gesture no doubt, but none of this makes anyone self- reliant. A micro loan helps an individual do something with his skills and abilities. It gives the borrower the self- confidence to think that he is being given a loan so that he can do something good out of it and repay the loan along with interest. This self- confidence boost goes a long way in making people realize their inner potential.
Micro loans in India have helped millions of rural, poverty- stricken women from low- income families to set up small businesses , making soft toys, accessories, cane artifacts, etc. These women have gained the respect of society because they are now doing something that is financially helping their families.
Micro loans have paved the way for long- term economic growth. As more and more people avail such micro loans and set up businesses, however small they are, it is actually helping the country’s economic growth.
Micro loans in India truly deserves the good feedback it gets from all quarters.
About Micro Loans In India
The truth about Micro Loans in India
When the government introduced various initiatives for starting Self Help Groups (SHG’s) in the 1990’s, a lot of people were skeptical as to how it would be possible for poor women to find the money to start such businesses. Micro loans came to the rescue. The government started allowing Micro Financing Institutions (MFI’s) to make micro loans available to poor rural women who had no verifiable credit history. Though the amount available through a micro loan was not big, it was enough to start SHG’s dealing with home- based, small- scale businesses.
In Punjab, using the Swarnajayanti Gram Swarozagar Yojana (SGSY), one of the programs brought out by the government, rural women were given assistance with how they could start their own SHGs’. They were given vocational training in how to make stuffed toys, do embroidery, stitching and knitting tasks, etc. The Mukstar district in the state of Punjab has presently 330 SHGs’ who have been helped by this program. What’s more, the women are also made to understand how they could avail of a micro loan from an MFI.
The success of Kuldeep Kaur, one of the women who have taken part in the government initiative and now runs her own SHG shows clearly on her face. She is a differently- abled woman who learnt the tricks of the trade and finally started her own SHG employing other women. She availed of a micro loan which gave her the initial capital investment she required.
Micro loans in India truly deserve the accolades it gets.
Rural Micro Loan Success
Rural women’s success story tastes sweet: What micro loans in India have achieved
Since the early 90’s of the previous century, micro loans in India have continued to become more and more important to the social and economic structure. Till its advent, it was not considered that poor women from villages could actually become self- reliant and become the breadwinner of their families. But now, this is a reality; not a far-fetched dream. The success of micro loans in the country has been unprecedented as more women from far- flung parts of the country are coming forward to set up small- scale cottage industries with the help of micro loans financed by Micro Financing Institutions (MFI’s).
One such success story is that of a Self Help Group (SHG) in Tamil Nadu which involves women in making a particular variety of milk sweets and sells them in the market. The special sweet is called ‘Palkova’ and is made with milk and sugar as its main ingredients. The sweet is sold not only to the locals, but also to people in Bangalore, Erode and Coimbatore. The very fact that people from such big cities are buying the sweets proves that the SHG women are doing a great job. Shops, retailers and even corporate offices are falling for the Palkova!
All this success has been made possible with the help of a micro loan that this SHG obtained. Truly, the advent of micro loans in India has ushered in a new era of economic empowerment of the rural women.
Micro Loan Success In Tamil Nadu
Women in Tamil Nadu become financially independent with Micro loans
Micro loans in India have ushered in an era of independence among poor rural women. The micro loan schemes have specially benefited the southern Indian state of Tamil Nadu where women from low- income families have come forward to take part in Self Help Group (SHG) initiatives. The SHG’s are helped financially by both by the central and state governments by letting them avail micro loans easily. Krishnagiri district has written yet another success story of the SHG’s and micro loans in India.
In this district, cottage industries have been set up to cater to the needs of rural women. One such SHG involves 20 women who spend their days making soft toys and beautiful accessories. These women have been taught how to make beautiful articles with their hands and they earn a decent Rs 100 to Rs 110 for each day of work. This translates to about Rs 3000 a month. The women are also taught regularly to update their skills and increase their repertoire. They learn the latest designs in soft toys and accessories, which help them keep in sync with the demands of the market.
Not only do the SHG volunteers help the women with training, but also for availing micro loans from Micro Financing Institutions (MFI’s). They also organize fairs and exhibitions to show off the handiwork of the women and make sales regularly. Their success story has shown what a micro loan can do for the poor, disadvantaged, disabled and minority community.
How Micro Loans Help Low-Income Families
Micro loans: A helping hand to low- income families in India
With roughly 1.2 billion people in India living below the poverty line, it is no wonder that government initiatives for poverty alleviation became a serious concern to be considered in the 90’s of the last century. After a lot of thought, it was decided that micro loans would be made available according to the commendable example set by the Grameen Bank of Bangladesh. Micro loans are easily available, do not require a collateral or verified credit history and were available in amounts varying from a few hundreds to a lakh rupees.
Micro loans are meant to be a helping hand for low- income families. They were mainly meant for women, though a lot of men have enjoyed their benefits. A micro loan is usually given out because it is expected that the borrower will use it as capital investment for starting a small scale business, preferably employing a few other people as well. Self Help Groups (SHG’s) were linked to the mainstream banking system through micro loans in India. There are options for multiple micro loans as well.
The concept of micro loans in India is such that low- income persons who would otherwise have not been eligible for a loan from a normal bank or financial institution for setting up a business can take advantage of. With more than 2.5 million SHG’s in India started with the money got from micro loans, micro finance has truly achieved what it set out to.