Posts Tagged ‘micro loans in india’
Micro Loans Have Changed India
April 6, 2011 | 
Author How Micro Loans have changed India
Dola Tikader lives in the village of Bankura in West Bengal. For years, she has struggled to make ends meet with her family’s craft of making beaded jewelry. But now Dola is free of most of her financial troubles, is working on expanding her business and has employed 9 other women from her village as well. All of them make a decent income and are generally quite a happy bunch. How has this been possible?
Well, the thing that made this huge difference was a micro loan. Dola got a micro loan of Rs 15,000 from an MFI working in her village and she used it smartly. First she got trained in the Self Help Group (SHG ) initiative where she learnt all about making fancy costume jewelry and updated herself on the latest styles and trends women in Calcutta prefer. After that she used the micro loan to get the raw material required and started producing jewelry. She sold her hand- made jewelry to sellers in Calcutta and made a decent profit. And then she employed other women from her village in her business as well.
It may sound corny, but micro loans and other micro financing have actually changed India. The success rate of SHGs’ who have availed of micro loans is so high that it makes loan sharks look bad. The repayment of micro loans has been estimated to be more than 97%, which is very good by any standards. As support for micro loans keep increasing, so does their influence.
Posted in Micro Loan Success Stories | 
Tags: india, loan, MFI, micro loan, micro loan india, micro loans in india, Micro Loans India, Microloan, Microloans in India, SHG | 
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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.
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.
How To Get A Micro Loan In India
How to avail of Micro Loans in India?
The micro loan scheme launched by NABARD way back in the 1990’s has proven itself to be a helping hand for the poor people in India. They are meant to be small amounts of money loaned out to people who have no collateral, or good credit history that would enable them to get a regular loan. Launched keeping in mind the needs of the rural women in India, micro loans are available to poverty stricken men too. Micro loans in India are given to let poor entrepreneurs set up their own small businesses so that they can better meet their financial needs as well as allowing them to employ other similar people in their community.
As said earlier, a micro loan is given with the purpose of setting up small businesses. The loan amount can actually vary from a few hundred rupees to a lakh, depending on the business plan or requirement of the person availing the loan. Following are the basics of availing micro loans in India:
The person is trained in the business he wants to starts
He or she has a good business plan
He or she has a fair chance to show a profit
Businesses which have skill- enhancement elements in it and are going to employ other people are usually given micro loans easily. Also, self help groups (SHG’s) can avail of micro loans. Micro loans are a lot more easier to obtain than regular loans.
Advantages And Disadvantages Of Micro Loans
Micro Loans: The advantages and disadvantages
It can be truthfully said that micro loans have managed to change the profile of the rural unemployed community in India, in however small a way. Before the advent of micro loan schemes in the country, poor people living in villages and small towns had no way of starting small, home- based businesses in case they were unemployed for the simple reason that they were just not considered ‘loan- worthy’ by mainstream banks. With micro loans in India brought out by NABARD, they rightfully found a helping hand in the form of small loans which they could use in setting up small businesses, therefore meeting their own financial needs as well as employing a few other poverty- stricken people as well.
Advantages
The fact that micro loans in India are easily available is a great advantage. A rural woman will find it easy to get a micro loan and start a small business with it.
Since institutions which provide micro loans work at a local level, it is a lot easier for someone to approach and negotiate a loan from them. Going to a bigger financial institution would have been a lot more intimidating.
A micro loan can be used for a variety of purposes, as deemed fit by the person taking the loan.
Disadvantages
There is a limit as to the amount of money that can be borrowed as micro loans in India.
If a person uses a micro loan as operational cost for his business instead of as a capital investment, it may lead to a cycle.
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