CONTENTS Table of CONTENTS I List of tables XI List of figures XII Abbreviations XV Executive summary I Chapter I Context of the study 1 1.1. Introduction 1 1.2. Poverty in India 2 1.3. Employment Perspective 3 1.4. Housing Scenario in India 4 1.5. Financial institutions in Developing Countries 5 1.6. Housing Finance in developing countries 5 1.7. Finance sector in India 6 1.8. Housing Finance in India 7 1.9. Finance sector Development in India 8 1.9.1. Banking Structure of India 8 1.9.2. Scheduled and non scheduled banks 8 1.9.3. Banking Developments 1949-69 8 1.9.4. Nationalisation of banks 9 1.9.5. Social banking 10 1.10. Finance for the poor 10 1.10.1. Friends, Colleagues, neighbours and relatives 11 1.10.2. Money lenders and pawn brokers 11 1.10.3. Chit funds 12 1.10.4. Employers 12 1.10.5. Retirement benefit, life insurance 12 1.10.6. Finance corporations 12 1.10.7. Credit cooperatives 12 1.10.8. Gift, dowry 12 1.11. Need for financial inclusion 13 1.12. Need of the study 13 1.13. Research Question 14 1.14. Aim 14 1.15. Objectives 14 1.16. Methodology 14 1.17. Context of the Study area 15 1.18. Study Area 15 1.19. Scope 17 1.20. Limitations 17 1.21. Organisation of the report 17 Chapter II Overview of microfinance 19 2.1. Introduction 19 2.1.1. Need of microfinance 20 2.1.2. Key principles of microfinance 20 2.1.3. History of Microfinance 21 2.2. Global landscape of Microfinance 22 2.2.1. Asia 22 2.2.2. Latin America 22 2.2.3. Sub Saharan Africa 23 2.2.4. Eastern Europe and Central Asia 23 2.2.5. Middle East and North Africa 23 2.3. Conceptual evolution of MF in India 23 2.4. Urban Microfinance model in India 24 2.5. Concept of Self Help Groups 25 2.5.1. Growth and progress of SHGs 26 2.5.2. Benefits of group approach 26 2.5.3. SHG-Bank linkage model 27 2.6. Micro Finance Institutions 28 2.6.1. Structure of Micro Finance Institutions 28 2.6.2. Financial Support for MFIs 29 2.7. Government Institutions in microfinance 29 2.7.1. NABARD 30 2.7.2. SIDBI 30 2.7.3. Rashtriya Mahila Khosh 31 2.8. Nongovernmental efforts 31 2.9. Government Programmes and Microfinance 31 2.10. Role of Microfinance in Poverty Reduction 31 2.10.1. Landmarks in Poverty alleviation through MF 32 2.11. Housing microfinance 33 2.12. Microfinance bill 2007 34 2.12.1. Selection of micro finance organisations 34 2.12.2. Mobilisation of savings 35 2.12.3. Regulations 36 2.13. Case studies 37 2.13.1. Grameen bank, Bangladesh 37 2.13.2. SEWA 39 Chapter III Microfinance Sector in Kerala 42 3.1. Special Features of Poverty in Kerala 42 3.1.1. Spread out Population 42 3.1.2. Educated poor 42 3.1.3. Asset less poor 43 3.2. Poverty alleviation measures in urban area 43 3.2.1. Swarna Jayanthi Shahari Rozgar Yojana 43 3.2.2. Integrated Housing & Slum Development Programme 43 3.2.3. Basic Services to the Urban Poor (BSUP) 44 3.3. Emergence of Microfinance in Kerala 44 3.4. Kudumbashree programme 45 3.4.1. Organizing the poor 46 3.4.2. Oraganizations within KDS 46 3.4.2.1.Neighborhood group (NHG) 46 3.4.2.2.Area Development Society (ADS) 47 3.4.2.3.Community Development Society (CDS) 47 3.4.3. State Level Organogram - Kudumbashree 47 3.4.4. Salient Features 49 3.4.5. Role as a Micro finance institution 50 3.4.5.1.Micro Credit 50 3.4.5.2.Bank Linkage Programme 50 3.4.5.3.Micro Enterprise 50 3.4.5.4.Bhavanashree - Micro Housing Scheme 52 3.5. NGO - Case of Ernakulam Social Service Society 52 3.5.1. Developmental objectives 53 3.5.2. Developmental strategies 53 3.5.3. Target groups 53 3.5.4. Activities 53 3.5.4.1.Women empowerment 53 3.5.4.2.Rural Women Banking (Mythri - Credit Union) 53 3.5.4.3.Women SHG and Micro Credit 54 3.5.4.4.Child development 54 3.5.4.5.Family development 54 3.5.4.6.Micro Enterprise Development 55 Chapter IV Case 1. Assessment of Kudumbashree 56 4.1. State level performance 56 4.1.1. Present status in study area 57 4.2. Socio economic analysis 58 4.2.1. APL/BPL 58 4.2.2. Household size 58 4.2.3. Religion 58 4.2.4. Marital status 59 4.2.5. Head of the household 59 4.2.6. Age of members 59 4.2.7. Education 60 4.2.8. Earning members 60 4.2.9. Monthly income 60 4.3. Microfinance aspects 61 4.3.1. Number of NHG members in one HH 61 4.3.2. Age of membership 61 4.3.3. Savings in NHG 61 4.3.4. Knowledge about MFI 62 4.3.5. Purpose of loan taken 62 4.3.6. Type of loan taken 62 4.3.7. Loan taken from NHG 63 4.3.8. Purpose Vs Source of loan 63 4.3.9. Loan amount Vs Purpose (NHG - Bank) 64 4.3.10. Loan sources other than MF 64 4.3.11. Purpose Vs Source other than KDS 64 4.3.12. Loan amount Vs Purpose (Formal) 65 4.3.13. Preferable source for future loans 65 4.3.14. Willingness to leave NHG 65 4.4. Micro enterprises 66 4.4.1. Source of loans 66 4.4.2. Loan from Non MF sources 66 4.4.3. Actual usage of loan taken for livelihood 66 4.4.4. Education Vs Livelihood initiative 67 4.4.5. Sustainability of Livelihood initiative 67 4.4.6. Loan amount for livelihood - Individual - NHG Bank (Rs) 68 4.4.7. Loan amount for livelihood - Group - NHG Bank (Rs) 68 4.4.8. Income from enterprises 68 4.4.9. Income Vs livelihood initiative 69 4.5. Micro Housing 70 4.5.1. Ownership Vs Quality 70 4.5.2. Usage of loan for housing 70 4.5.3. Actual usage of housing loans 71 4.5.4. Source of Housing Loans 71 4.5.5. Non MF sources of housing loans 71 4.5.6. Loan amount for Housing - NHG Bank (Rs) 72 4.5.7. Loan amount for Housing - Formal sources (Rs) 72 4.6. Group assessment 73 4.6.1. Age of NHG 73 4.6.2. Group size of NHG 73 4.6.3. Selection procedure of leaders 73 4.6.4. Leadership rotation 73 4.6.5. Attendance in meeting 73 4.6.6. NHG Meeting 74 4.6.7. ADS Meeting 74 4.6.8. CDS meeting 74 4.6.9. Benefits after the participation 74 4.6.10. Time taken for loan availability 74 4.6.11. Loan repayment 74 4.7. Findings 75 4.7.1. Socio economic aspects 75 4.7.2. Microfinance aspects 75 4.7.3. Microenterprises 76 4.7.4. Micro housing 77 4.7.5. General 77 4.7.5.1.Promotion 77 4.7.5.2.Encouragement for group leaders 77 4.7.5.3.Lack of Awareness 77 4.7.5.4.Political issues 78 4.7.5.5.Conflicts 78 Chapter V Case 2 - Assessment of NGO (ESSS) 79 5.1. Growth of SHG 79 5.2. Thrift and credit 79 5.3. Socio economic Analysis 80 5.3.1. APL/BPL 80 5.3.2. Household size 80 5.3.3. Religion 80 5.3.4. Head of the HH 80 5.3.5. Marital status 80 5.3.6. Age of SHG members 81 5.3.7. Education 81 5.3.8. Earning members in HH 81 5.3.9. Monthly HH income 82 5.4. Microfinance aspects 82 5.4.1. Number of members in one HH 82 5.4.2. Age of membership 82 5.4.3. Savings in SHG 82 5.4.4. Knowledge about MFI 82 5.4.5. Purpose of loan taken 83 5.4.6. Loan from SHG (Rs) 83 5.4.7. Usage of loan Vs Purpose of loan taken 83 5.4.8. Purpose Vs Source of loans 83 5.4.9. Loan sources other than MF 83 5.4.10. Purpose Vs Loan Amount 84 5.4.11. Purpose Vs Source other than NGO 84 5.4.12. Loan amount Vs Purpose 84 5.4.13. Future source of loans 85 5.4.14. Willingness to leave 85 5.5. Micro enterprises for livelihood 85 5.5.1. Source of loans 85 5.5.2. Loan from Non MF sources 85 5.5.3. Sustainability 85 5.5.4. Education Vs Livelihood initiative 86 5.5.5. Loan amount for livelihood - NGO 86 5.5.6. Income from enterprises 86 5.5.7. Income Vs Livelihood initiative 87 5.6. Micro housing 87 5.6.1. Sources of housing loan 87 5.6.2. Non MF Sources of housing loan 87 5.6.3. Loan amount - MFI (Rs) 88 5.6.4. Housing Loans - MFI (Rs) 88 5.6.5. Usage of housing loan taken 88 5.7. Group Assessment 89 5.7.1. Age of the SHG 89 5.7.2. Group size of SHG 89 5.7.3. Conflicts 89 5.7.4. Help from the group 89 5.7.5. Repayment of loans 89 5.8.

Findings 90 5.8.1. General 90 5.8.2. Microfinance aspects 90 5.8.2.1.Savings 90 5.8.2.2.Credit size 90 5.8.2.3.Interest rate 90 5.8.2.4.Time taken 91 5.8.2.5.Selection of beneficiary 91 5.8.2.6.Tracking of the usage of loans 91 5.8.3. Microenterprises 91 5.8.4. Micro housing 92 5.8.5. General 92 5.8.5.1.Promotion 92 5.8.5.2.Encouragement 92 5.8.5.3.Awareness 92 5.8.5.4.Unbiased approach 92 5.8.5.5.Conflicts 92 Chapter VI Conclusion and Suggestions 93 6.1. Conclusion 93 6.1.1. Challenges 94 6.1.1.1.Reaching the poorest 94 6.1.1.2.Attracting professional 95 6.1.1.3.Operational costs 95 6.2. Suggestion 95 6.2.1. Government's role 95 6.2.1.1.Proper issue of the BPL cards 96 6.2.1.2.Encourage NGOs 96 6.2.1.3.Policy initiatives 96 6.2.2. Non Government institutions 96 6.2.2.1.Unbiased approach 96 6.2.2.2.Database of members 96 6.2.2.3.Product design 97 6.2.2.4.Incentives to the leaders 97 6.3. Self help groups 97 References 98 Appendix 102