Financial services for the rural poor and women in India: Access and sustainability

Abstract

This paper, based on a study commissioned by the World Bank, reviews the performance of Indian financial institutions in providing services to the rural poor and examines the key issues facing policy makers and institutions as the country moves forward on financial sector reforms. The study posits two sets of causal variables for institutional performance: (i) Internal Practices Attitudes (IPAs); and (ii) mechanisms for client interface that either enhance or thwart access by the rural poor and women (MEAs). Both of these variables are largely within the control of the financial institutions. The study sought to identify changes in these variables that could improve access to financial services by the rural poor. The authors conclude, however that rural financial institutions are faced with a hierarchy of constraints, largely beyond their control, and any attempt at developing workable and sustainable approaches to improved access of the rural poor to financial services will need to address a whole range of macro-policy issues including depoliticization, ownership and governance in addition to regulatory issues.

Outreach of Microfinance in India

“…Cost of funds (%) 16-20 10-15 7-9 SOURCE: Mahajan and Ramola (1996) To increase the outreach, the MFIs should combine and rearrange the outreach aspects based on their strength. MFIs usually have high length and can focus on scope, cost, worth and breadth.Higher outreach by MFIs in Indian microfinance market have been characterised by doorstep lending, low transactions cost, less transition period and development of simple application procedure for clients.…”

Microcredit and Women's Empowerment: Have We Been Looking at the Wrong Indicators?

“……”

Micro-Credit Programme Evaluation: A Critical Review

“…The twin criteria of outreach and seif-sustainability become the yardstick of micro-credit programme evaluation (Yaron 1992a(Yaron , 1992bChristen, Rhyne, and Vogel 1994;Chaves and Gonzalez-Vega 1996;Mahajan and Ramola 1996).…”