Upload
vaughn
View
30
Download
0
Tags:
Embed Size (px)
DESCRIPTION
Small Industries Development Bank of India Financial Inclusion Programmes. S. Muhnot, Chairman & Managing Director December 05, 2011 Thimphu. Financial Inclusion. - PowerPoint PPT Presentation
Citation preview
1
Small Industries Development Bank of India
Financial Inclusion Programmes
S. Muhnot, Chairman & Managing DirectorDecember 05, 2011Thimphu
2
Financial Inclusion
Financial Inclusion is the process of ensuring access to appropriate financial products and services needed by all sections of the society in general and vulnerable groups such as weaker sections and low income groups in particular at an affordable cost in a fair and transparent manner by mainstream institutional players.
3
Financial Inclusion Twin Aspects of Financial Inclusion - Financial Inclusion and Financial
Literacy are twin pillars. While Financial Inclusion acts from supply side providing the financial market/services what people demand, Financial Literacy stimulates the demand side – making people aware of what they can demand.
Financial Literacy & Financial Inclusion
Extent of Financial Inclusion -India
In India, around half of the country is banked.
Approx. 55 per cent of the population have deposit accounts and 9 per cent have credit accounts with banks.
There is one bank branch per 14,000 people.
Around 20% of the population have life insurance and 9.6% of the population have non‐life insurance coverage. 4
5
Financial Inclusion – The Indian Way
Board approved Financial Inclusion Plans (FIPs) of banks for 3 years, starting April 2010.
Roadmap to cover villages of above 2000 population by March 2012
Availability of minimum four banking products through Information Communication Technology (ICT) model has been ensured .
Mandatory opening of 25 % of new branches in unbanked rural centers.
Know Your Customer (KYC) documentation requirements significantly simplified for small accounts.
Pricing for banks totally freed . Interest rates on advances and deposits totally deregulated.
6
Financial Inclusion – Models and ActivitiesBusiness Facilitator
(BF) – NGOs, Farmer Clubs,
Community based organisations, Co-operative
Societies, Panchayats, IT enabled rural outlets of Co-
operative Entities
Business Correspondent (BC) –
Section 25 companies, NBFC not accepting
deposit, Post Offices, NGO MFIs under
Societies/trusts, MACS All activities of BF
+•Collection of small value deposits•Enabling withdrawals•Sale of other financial products•Receipt and delivery of remittances / payment instruments•Disbursal of small value credit and recovery of principal and interest in a limited way
• Identification of borrower• Collection and verification
of primary information• Processing and submission
of application to banks• Monitoring and Follow-up• Educating about savings,
other products, debt counseling
7
Micro Credit as a tool for Financial InclusionMicro Credit as a tool for Financial Inclusion Demand (overall)
Potential market: 77 mn.
Households
Estimated annual micro credit
demand: USD 18 bn to 27 bn.
Demand for other services: USD
2.43 bn.
Supply (overall)
Two major channels
Small Industries Development Bank of
India (SIDBI) pioneered Microfinance
Institutions (MFI) lending channel
SHG-Bank Linkage Programme
pioneered by National Bank for
Agriculture and Rural Development
(NABARD)
These twin channels have total size of
around USD 10bn. serving 120 mn
clients
8
SIDBI – An Apex Financial Institution
9
Role of SIDBIRole of SIDBISupply side – Microfinance
Activities
• Help transform NGOs/Societies Help transform NGOs/Societies
etc. to more regulated entities. etc. to more regulated entities.
• Associated with more than 150 Associated with more than 150
MFIsMFIs
• Introduced the concept of rating of Introduced the concept of rating of
MFIsMFIs
• Term loansTerm loans
• Equity / Quasi EquityEquity / Quasi Equity
• Capacity Building GrantsCapacity Building Grants
Demand Side – Promotional & Developmental Activities
• Enterprise promotion programmes
• Skill-cum-Technology Upgradation
Programme
• Cluster Development Programme
(CDP)
• Entrepreneurship Development
Programme (EDPs)
Phases of Microfinance Programme of SIDBI - Learning
10
11
Promotional & Developmental InitiativesPromotional & Developmental Initiatives
ApproachAchievemen
t
Rural Industries Programme (RIP)
12
Addressing the Missing MiddleAddressing the Missing Middle(> USD 1000 upto USD 20,000)(> USD 1000 upto USD 20,000)
13
14
SIDBI –SIDBI – Products & ServicesProducts & Services
REFINANCE
WORKING CAPITAL FINANCE
RECEIVABLE FINANCE
MICRO CREDIT
PROMOTIONAL & DEVELOPMENTAL
ACTIVITIES
TECHNOLOGY UPGRADATION,
CLUSTERDEVELOPMENT
RISKCAPITAL
DIRECT FINANCE
SIDBI
16
THANK YOU