A Study of _micro Finance_ in Gopeshwar & Chamoli District

8/17/2019 A Study of _micro Finance_ in Gopeshwar & Chamoli District

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1. INTRODUCTION

Microfinance refers to the provision of financial services to poor or low-income clients,

including consumers and the self-employed. The term also refers to the practice of

sustainable delivering those services.

More broadly, it refers to a movement that envisions “a world in which as many poor and

near-poor households as possible have permanent access to an appropriate range of high

quality financial services, including not just credit but also savings, insurance, and fund

transfers.”

It is recently developed loan scheme which was developed by the Bahaman bank of

Bangladesh in 1990.The main purpose of this scheme is to give the financial support to

the poor who are having there monthly income less than rs.7000.in our state Almora

Bank has the similar scheme which provide loan to poor’s. through which they can

expand there business and can increase there monthly income.

1.1 Need of the Study

The main need of the study was to identify the living condition of person associated with

farming and allied business. What is there monthly income? How many people are

dependent on them? How Uttaranchal Gramin Bank can help them financially to improve

there living standard. If Uttaranchal Gramin Bank provide them the money what will they

do with that money. Will they expand there business with that money or will they utilize

that money somewhere else.


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1.2 CHAPTER ARRANGEMENT

CHAPTER –1

It contains all about need for study as well as objectives of the project and period of

study, which it take to complete.

It also contain about the fieldwork and its method of analysis along with limitations.

CHAPTER -2

It contain all about the industry and the profile of the company and the structure of the

organization. About microfinance and Introduction about Pesiculture

CHAPTER –3

It comprises of data analysis and its conclusion, which includes the survey method

though, percentage technique.

CHAPTER –4

In fourth chapter researcher gave the findings and the recommendation of the study.


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1.3 RESEARCH OBJECTIVES

Ø To know the economic condition of the Farmers and to get feedback from the

customers and make it more marketable

Ø To know the economic condition of small retailers/ dealers.

Ø To know whether they know about microfinance and make strategy for further

development in the micro-finance areas.

Ø To know whether people know about the services provided by Almora Urban

Bank.

Ø To know about the other competitors in this field.

Ø To know the time associated with this business.

Ø How the demand fluctuates effect there business.

Ø At what price they sell there product.

1.4 SAMPLE SIZE

The total sample size was 100 (Age ranging between 18 yrs to 65 yrs)

Sample Design:

As complete enumeration of all the members of the population (i.e. all the customer who

had taken housing loan), which is known, as census enquiry is not possible so I have used

sampling technique.

Sample Unit: Customers within Gopashwer and Chamoli district


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Sample Type:

Area sampling

Sample Area:

Gopeshwar, Mathana, Bandwara, Chinka

Nijmula, Piplkoti, Mayasuar,

Timing of survey:

9.00 am to 12.30 pm and 4.00 pm to 7.00 pm

1.5 PERIOD OF STUDY

The total time duration of this study was eight week (30 days) in between it I collect

primary data and observe secondary data. The time period of this study was – 25th June to

24th July 09.

1.6 RESEARCH METHODOLOGY

RESEARCH INSTRUMENT USED

A questionnaire consists of list of questions to be asked from the respondents and the

space provided to record the answer / responses. Questionnaire can be used for the

personal interviews, focus groups, mails and telephonic interviews. The choice among

these alternatives is largely determined by the type of information to be obtained and by

the type of respondents from whom it is to be obtained.


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The common factor in all varieties of the questionnaire method is this reliance on verbal

responses to question, written or oral.

Questionnaire in the project consists of:

v Multiple choice questions

v Dicthomus

MULTIPLE CHOICE QUESTIONS:

Questions of this type offer the respondents an alternative to choose the right answer

among others. It is faster, time saving and less biased. It also simplifies the tabulating

process.

DICTHOMUS:

These are the questions which are Boolean in nature. These answers are straightforward

and respondents have to answer them in a straight way. That means the answer can only

be either ‘Yes” or ‘No’.

NONDISGUISED, STRUCTURED TECHNIQUES

The non structured techniques for attitude measurement are primarily of value in

exploratory studies, where the researcher is looking for the salient attributes of given

products and the important factors surrounding purchase decisions as seen by the

consumer. Structured techniques can provide a more objective measurement system, one

which is more comparable to a scale or a yardstick. The term scaling has been applied to

the efforts to measure attitudes objectively, and a number of useful scales have been

developed.


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FIELD WORK - SAMPLING TECHNIQUE USED & SAMPLING METHODS

Sample design is a definite plan of obtaining some items from the whole population. The

sample design used in this project is two state sampling i.e. Cluster and convenience. In

the probability sampling methods, each items in the sample is chosen one at a time from a

complete list of universe elements. In marketing research practice, it will sometimes be

more expedient to select clusters or groups of universe elements, rather than to choose

sample items individually.

Sampling methods in which universe elements are chosen in groups ---- rather than

individually -- are called cluster-sampling methods. They are widely used in the sampling

of human populations. When no complete universe listing exists, a type of sampling

is called area sampling may be the only practically feasible form of probability sampling.

Sample design is a definite plan of obtaining some items from the whole population. The

sample design used in this project is two state sampling i.e. cluster sampling and

convenience sampling. The whole city was divided into some geographical areas and I

have chosen

SAMPLING

Sampling Technique : Non probability sampling

(A non probability sampling technique is that in which each element in the population

does not have an equal chance of getting selected)

Method : Direct interview through questionnaire and Fact to face

interview


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METHOD USED FOR DATA COLLECTION

• Questionnaire was prepared keeping the objective of research in mind.

• Questions were asked to respondents as regards to there intention to take loan.

• The help of questionnaires conducted direct interviews, in order to get accurate

information.

• In order to get correct information I had to approach consumers ranging from 15

yrs to 65 yrs.

• I visited as many respondents as I can and asked them about schemes provided by

Uttaranchal Gramin Bank ?

• It is really a Herculean task to understand Consumer Behavior, as the definition

suggest, “Consumer behavior is a physical activity as well as decision process

individual engaged in when evaluating, acqui r ing, using and disposing goods

and services”.

• In order to collect accurate information I visited to various market, farmers,

dealers of farm products and rural development department each and every

question was filled personally by the respondents and checked properly.

1.7 DATA ANALYSIS METHOD

I used percentile method to calculate the primary data and Graphical method were used to

show and analyze the information which gathered during the research period.


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1.8 SCOPE OF THE STUDY

Ø Increase the awareness level of micro finance scheme used by UttaranchalGramin Bank .

Ø Seek the general perception of consumer towards Uttaranchal Grami n Bank .

Ø To find the performance of Uttaranchal Gramin Bank vis-à-vis other banks.

1.9 LIMITATIONS

v Limited time available for interviewing the respondents. As a result of this it was

not possible to gather full information about the respondents.

v When I interviewed children and teenagers, sometimes they use to give answers

under the influence of their parents or elders.

v As summer training is going under summer season so sometimes

people are less interested in filling up questionnaire.

v Sometimes the problem which I face is language problem for which I have to

make them understand.

v Non-cooperative approach and rude behavior of the respondents.

v If the respondents answer does not falls between amongst the options given then it

will turn up to be a biased answer.


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INDIAN BANKING

IntroductionThe Indian banking can be broadly categorized into nationalized (government owned),

private banks and specialized banking institutions.The Reserve Bank of India acts a

centralized body monitoring any discrepancies and shortcoming in the system. Since the

nationalization of banks in 1969, the public sector banks or the nationalized banks have

acquired a place of prominence and has since then seen tremendous progress. The need

to become highly customer focused has forced the slow-moving public sector banks to

adopt a fast track approach. The unleashing of products and services through the net has

galvanized players at all levels of the banking and financial institutions market grid to

look anew at their existing portfolio offering. Conservative banking practices allowed

Indian banks to be insulated partially from the Asian currency crisis.Indian banks are

now quoting al higher valuation when compared to banks in other Asian countries (viz.

Hong Kong, Singapore, Philippines etc.) that have major problems linked to huge Non

Performing Assets (NPAs) and payment defaults. Co-operative banks are nimble footed

in approach and armed with efficient branch networks focus primarily on the ‘high

revenue’ niche retail segments.

The Indian banking has finally worked up to the competitive dynamics of the ‘new’

Indian market and is addressing the relevant issues to take on the multifarious challenges

of globalization. Banks that employ IT solutions are perceived to be ‘futuristic’ and

proactive players capable of meeting the multifarious requirements of the large

customers base. Private banks have been fast on the uptake and are reorienting their

strategies using the internet as a medium The Internet has emerged as the new and

challenging frontier of marketing with the conventional physical world tenets being just

as applicable like in any other marketing medium.

The Indian banking has come from a long way from being a sleepy business institution

to a highly proactive and dynamic entity. This transformation has been largely brought

about by the large dose of liberalization and economic reforms that allowed banks to

explore new business opportunities rather than generating revenues from conventional

streams (i.e. borrowing and lending). The banking in India is highly fragmented with 30


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banking units contributing to almost 50% of deposits and 60% of advances. Indian

nationalized banks (banks owned by the government) continue to be the major lenders in

the economy due to their sheer size and penetrative networks which assures them high

deposit mobilization. The Indian banking can be broadly categorized into nationalized,

private banks and specialized banking institutions.

The Reserve Bank of India act as a centralized body monitoring any discrepancies and

shortcoming in the system. It is the foremost monitoring body in the Indian financial

sector. The nationalized banks (i.e. government-owned banks) continue to dominate the

Indian banking arena. Industry estimates indicate that out of 274 commercial banks

operating in India, 223 banks are in the public sector and 51 are in the private sector.The private sector bank grid also includes 24 foreign banks that have started their

operations here. Under the ambit of the nationalized banks come the specialized

banking institutions. These co-operatives, rural banks focus on areas of agriculture,

rural development etc.,

unlike commercial banks these co-operative banks do not lend on the basis of a prime

lending rate. They also have various tax sops because of their holding pattern and

lending structure and hence have lower overheads. This enables them to give a

marginally higher percentage on savings deposits. Many of these cooperative banks

diversified into specialized areas (catering to the vast retail audience) like car finance,

housing loans, truck finance etc. in order to keep pace with their public sector and

private counterparts, the co-operative banks too have invested heavily in information

technology to offer high-end computerized banking services to its clients.


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CATEGORIZATION OF INDIAN BANK

Types of Banks

Complementing the roles of the nationalized and private banks are the specialized

financial institutions or Non Banking Financial Institutions (NBFCs). With their

focused portfolio of products and services, these Non Banking Financial Institutions act

as an important catalyst in contributing to the overall growth of the financial services

sector. NBFCs offer loans for working capital requirements, facilitate mergers and

acquisitions, IPO finance, etc. apart from financial consultancy services. Trends are

now changing as banks (both public and private) have now started focussing on NBFCdomains like long and medium-term finance, working cap requirements. IPO financing

to etc. to meet the multifarious needs of the business community.

The Private sector Bank which are marketed in Indian market are

1. Current A/C

2. Mutual Fund

3. Insurance

4. Sales and Trading

5. Trust and security

6. Trade finance

7. Fixed deposit

1998-99

State Bank of India and Associates 08

Nationalized Banks 19

Domestic Private Sector Banks 25

New Domestic Private Sector Banks 09

Foreign Banks 29


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Product and Services

1. Global market

2. Corporate market

3. Cash mgt.

4. Clearing

5. Trust and Securities Services

6 Trade finance

COMMERCIAL FINANCING

The commercial financing model in Indian banking can be broadly categorized into

project finance and working capital finance. These two segments form the pivot around

which banks operate.

Project Finance

Banks offer long term and short terms loans to business houses, corporations to set up

their projects. These loans are disbursed after the approval from the banks’ core credit

validating committee. In India, there are 11 national level land 46 state level financial

and investment institutions that cater to long term funding requirements of the industry.

The project finance segment is highly competitive with various players offering

innovative schemes to entice corporate.

Working capital

In order to meet the diverse needs and requirements of the business community, banks

offer working capital funds to corporate. Working capital finance is specialized line of

business and is largely dominated by the commercial banks.

The Indian banking saw dramatic changes in the last decade or so ever since the advent

of liberalization and India’s integration with the world economy. These economicreforms and the entry of private players saw nationalized banks revamp their service and

product portfolio to incorporate new, innovative customer-centric schemes. The Indian

banking finally woke up to the surging demands of the ever-discerning Indian

consumer. The need to become highly customer focused (generated by high competitive

levels) forced the slow-moving public sector banks to adopt a fast track approach.

Taking a leaf out of the private sector banks, the public sector banks too went for major


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image changes (including corporate brand building exercises) and customer friendly

schemes. These customer friendly programs included revamping of the product and

service portfolio by introducing new product & service schemes (like credit cards,

hassle- free housing loan schemes, educational loans and flexi-deposit schemes)

integration of the branch network by using advance networking technology and

customer personalization programs (through ATMs and anytime banking etc.). Many

banks have started capitalizing on the recent stock market surge by adding (Initial Public

Offering) IPO financing options and schemes in their product mix. IPO finance has

received a positive response from the investors and is becoming popular amongst the

business community. The objective of all these strategies was very clear – to bridge theservice & product gap that was inherent in the banking system. To cater to the

increasing customer demands and the surge in business volumes, many public sector

banks have ploughed back funds to invest heavily in technology upgrades and systems

like LANs, WANs, VSATs etc.

Marketing and brand building programs were also given a new thrust in the new

liberalized banking scenario. Promotional budgets were hiked to cater to the new and

large discerning target audience. Banks were now keen on marketing their products and

service though various mediums to reach their core customers. Direct marketing,

Internet marketing, hoarding, press ads, television sponsorships, image makeovers etc.

became an integral part of a bank’s marketing mix. To meet the personalized needs of

the customer and in order to differentiate its services, banks repositioned themselves in

specialized fields, like housing loans, car finance, educational loans etc. to optimally

service the customer. Permission marketing became the new strategy that banks began

to propound i.e. feeding the customer (with his or her consent) with product and service

information and thereby enticing him towards the bank’s product – service portfolio.NEW GENERATION BANKING

The liberalize policy of Governme nt of India permitted entry to private sector in the

banking, the industry has witnessed the entry of nine new generation private banks. The

major differentiating parameter that distinguishes these banks from all the other banks in

the Indian banking is the level of service that is offered to the customer. Verify the

focus has always been centered around the customer – understanding his needs,


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preempting him and consequently delighting him with various configuration of benefits

and a wide portfolio of products and services. These banks have generally been

established by promoters of repute or by ‘high value’ domestic financial institutions.

The popularity of these banks can be gauged by the fact that in a short span of time,

these banks have gained considerable customer confidence and consequently have

shown impressive growth rates. Today, the private banks corner almost four per cent

share of the total share of deposits. Most of the banks in this category are concentrated

in the high-growth urban areas in metros (that account for approximately 70% of the

total banking business ). With efficiency being the major focus, these banks have

leveraged on their strengths and competencies viz. Management, operational efficiencyand flexibility, superior produc t positioning and higher employee productivity skills.

The private banks with their focused business and service portfolio have a reputation of

being niche players in the industry. A strategy that has allowed these banks to

concentrate on few reliable high net worth companies and individuals rather than cater

to the mass market. These well-chalked out integrates strategy plans have allowed most

of these banks to deliver superlative levels of personalized services. With the Reserve

Bank of India allowing these banks to operate 70% of their businesses in urban areas,

this statutory requirement has translated into lower deposit mobilization costs and higher

margins relative to public sector banks.

GLOBAL MARKETGlobal Markets comprises all sales, trading, structuring and research in a wide range of

financial products, including bonds, commodities, equities, equity-linked products,

exchange traded and OTC derivatives, foreign exchange, money market instruments,

asset-and residential mortgage-backed securities and hybrid instruments. Global Markets

and Global Corporate finance are jointly responsible for our Leveraged Debt Capital

Markets (LDCM) and equity capital Markets (ECM) businesses.

CORPORATE BANKING & SECURITIES

Corporate Banking & Securities comprises two Business Divisions: Global Markets and

Corporate finance. 2006 was an outstanding year for Global Markets. In this

environment, the Division again generated record revenues, reaping rich rewards from

our unique strategic positioning and an exceptionally well-diversified platform across

different products, client segments and regions of the world. With a leadership position in


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Europe and leading franchise in dynamic emerging capital markets, we profited from

good exposure to regional growth. Our emphasis on high-value, structures solutions also

enabled us to excel for our clients in complex, dynamic and demanding markets.

2006 was a highly successful year for Corporate Finance, with profitable growth and

market share gains in our core businesses. Business conditions were favorable, with

strong levels of corporate activity and growth momentum particularly in Europe and in

the Asia/Pacific region. Furthermore we saw dynamic growth in key market segments,

including financial sponsor and commercial realestate. With a broad array of products

and services, and a well-developed global presence, Corporate Finance was well

positioned to take good advantage of this environment during the year.


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UTTARANCHAL GRAMIN BANK

the Uttaranchal Gramin Bank Threesh Kapoor. Uttaranchal Gramin Bank was formed

following the merger of Alaknanda Bank, Ganga-Yamuna Bank and Pithoragarh bank in

2006. The bank earned a profit of Rs 8.83 crore before tax this year. It has registered a

jump of 233 per cent as compared to the last year.The phenomenal rise in the profit is

mainly due to the merger of three banks. The bank has also set up an art gallery at its

head office here to promote local artists from the state.

“Financial inclusion” of rural India is a national challenge today. Established banks find

it prohibitive to enter into the rural area for it implies high establishment costs and

relatively low returns for them. Based on bio-metric technology, some banks have tried to

enter the rural market with “Business Correspondent” model in the recent past. The

impact has so far not been very impressionable perhaps because of lack of credibility that

the rural masses have with the “Business Correspondent”.

India Post on the other hand with a huge network rides high on the credibility factor in

the rural area. But its shrinking business in the traditional financial market because of

relatively lower rates of interest in the P.O. S.B. Schemes, make it compulsive for the

Department to seek for new business avenues around.


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Keeping in view this business opportunity and compulsions, Uttarakhand Post has

entered into a business tie- up with Uttaranchal Gramin Bank with the following twin

objectives:-

(a) Collection of high-end deposits on behalf of the bank.

(b) Disbursement of bank loans and collection of the re-payment

installments(EMI) through Savings Bank Passbook Account and with the help

of GDS (Gramin Dak Sevak) staff.

Both these services are rendered by Uttarakhand Post on reasonable charges. In short the

endeavor is to expand the role of an agency functionary, that India Post has being playing

on behalf of Ministry of Finance for long, to that of a Commercial Bank also for the

reasons of better profitability and future prospects. Besides, India Post also plays soc ially

challenging role of “Financial Inclusion” of the rural areas .

Organizational StructureBank has its Head Office which in turn Regional Offices under which the branches

function. The delegation of powers is decentralized up to the branch level to facilitate

quick decision making.

Head Office

Regional Offices

Branches


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MANAGERIAL HEIRARCHY OF UGB

Chairman - Thris Kapoor

General Manager

Regional Manager

Branch Manager


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Mission & Vision

Ø Mission is to transform into a Bank with sound financials committed to overall

economic development of rural areas with care, competence and compassion

towards its customers

Ø To stage a turn around in profitability and NPA reduction, to double the flow of

credit to agriculture, to achieve a quantum jump in savings bank deposit

mobilisation, to ensure saturation of villages in our service area, to prepare a

committed and knowledgeable workforce with a view to transforming the Bank

into the most preferred banking outlet in rural areas.


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BANKING

The bank has the following deposit schemes

Fixed Deposit (General)

Fixed Deposit (Re-investment)

Recurring Deposit

Mini Deposits

Saving Bank A/C

Current A/C

SERVICE & PRODUCT

v Nomination Facility Available

v Advances-

§ For Agriculturist-

♦ Short Term Credit Under Kishan Credit Card

♦ Term Loans For Tractor, Land Development, Irrigation.

♦ Purposes, Drip Irrigation,Farm Chanisation,

♦ Rural Godown, Animal Husbandary, Agri.Clinics,

§ For Non Farm Sector: -

♦ Cash Credit And Term Loans For Small And Retail Traders

♦ Loan For Professional & Self Employed/Rural Artisans/ Ssi &

♦ Other Industries / Transport Operators /Housing Loans / Car

♦ Loan / Education Loan Etc.

♦ Loans Against Bank' Own Deposit / Loan Against Nsc


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♦ Loan Against Mortgage Of Property.

v Many Other Products To Suit Particuler Requirement

v Locker Facility At Selected Branches

v Draft Facility At Selected Centers

v Drop Box Facility For Cheques And Drafts

TIE UP with Post Office :The features of the Tie up scheme

(a) For collection of high-end deposits.

(i) Customer will be identified by joint marketing of Uttarakhand Gramin

Bank and the Post Office.

(ii) Customer will be asked to open a savings account in the Post Office

where he will deposit the money.

(iii) Subsequently the customer will be asked to fill up the deposit forms

and complete other formalities as required by the bank.

(iv) The Postmaster will send duly completed papers to the designated

branch of the Bank along with cheque in favour of the Manager of

that bank, corresponding to the amount of the deposit made by the

customer.

(v) In case of more than one deposit on any day, the cheque with the

list of depositors and papers would be sent.

(vi) After scrutiny of all papers the bank will open an account for the

customer and send the required Passbook/Fixed Deposit to the Post

Office for delivery to the customer.

(vii) At the end of the term of deposit customer will apply for closure of

the account in the Post Office. The paper will be sent to the

designated bank where from final sanction of the payment will be


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sent to the Postmaster who will make further the payment to the

customer through the Savings Bank account.

(b) For disbursement of loan and collection of repayment.

(i) The customer will be identified by the Post Office.

(ii) Application for loan and other formalities will be got completed

from the customer by the Post Office GDS staff.

(iii) The Post Office will confirm the identity of the customer and send

the papers to the designated branch of the bank.

(iv) The bank branch will process the papers and after satisfying

themselves, the bank will sanction loan and send the cheque of

loan sanctioned to the Postmaster. The Postmaster will open a

Savings Bank Account of the customer and deposit the loan

amount in that account. The customer can withdraw amount at his

ease.

(v) Monthly re-payment EMI will be received by the Postmaster by

cheque for the Savings Bank Account and further transferred to the

designated bank on monthly basis alongwith required MIS.

(vi) In case the re-payment is stopped, the Postmaster will provide the

service of soft recovery by inquiring the reasons for non-payment

and conveying it to the bank authorities.

(vii) Account will be closed after last EMI is received.

(D) Advantages of the scheme

(a) For the rural public-

(i) Rural public will get banking services that includes high-end

deposits, loans and repayment facility right at their doorstep

through vast network of around 2500 rural Post Office branches in

Uttarakhand.


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(ii) The banking services provided will be transparent and therefore

accountability will be maximum.

(b) For the Bank -

(i) The bank will be able to deliver banking services in the rural areas

at a relatively much lower establishment cost. Thus the objective

of “Financial Inclusion” of rural areas could be comfortably

achieved.

(ii) An army of around 6000 strong GDS force that provides Postal

services in rural areas will assist the bank in regular recovery of the

loans.

(iii) The bank can improve its business in the rural areas with the help

of the strong age old credibility that India Post wields in the rural

area.

Uttaranchal Gramin Bank opens branches for women

Uttaranchal Gramin Bank is to open three branches exclusively for women in the hill

state of Uttarakhand. The first such branch, managed only by women, has already started

functioning at Dehradun’s Indira Nagar locality.Only women are allowed to open their

accounts in the branch. This is the 121st branch of the bank. Three more such branches

are proposed in Pauri and Pithoragarh districts.

With help from NABARD, a special women centre has also been opened at the head

office of the bank here. The main thrust of the women branch would be to attract Self-

Help Groups (SHGs) and Non-Government Organisations (NGOs), which are mostlyrepresented by women.“By opening women branches, we want to salute the women of

the hill state who are known as matrishakti’ (mothers’ power) in Uttarakhand,” said

Chairman of the Uttaranchal Gramin Bank Threesh Kapoor.


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PRODUCT DISCRIPTION

Fixed Deposit (General)

In this scheme the money can be deposited for a fixed time period of 15 days or more. It

can be withdrawn before maturity date without any penalty in interest. If required the

interest on deposited money is payable either monthly/quarterly/half yearly/yearly. The

interest rates applicable are as under:

Term Interest Rate For Senior Citizen

15 days to 45 days 4.50% 5.00%46 days to 90 days 6.00% 6.50%

91 days to 180 days 7.00% 7.50%

More than 180 days & less than one year 8.00% 8.50%

More than 1 year & less than one year 8.00% 8.50%

1 year to 2 year 8.50% 9.00%

More than 2 Years 8.25% 8.75%

No Interest Premature Payment before 45 Days

For senior citizen & their dependents(wife, husband, son and daughter un-married)

having joint account the rate of interest would be more than the normal rate of interest.

In the case of premature payment before 45 days no interest will be paid.

For armed forces retired personal and martyrs, the rate of interest would be 0.25%

more than above rates. This rate will applicable only for the deposits up to one (1) year

or more than one (1)year .

For charitable trusts(Temples, Mosques, Gurudwara and Church) & other registe red

charitable trusts which follows income tax rules the rate of interest would be 0 .25%

more than above rates. The interest rates for this scheme are same as for Fixed deposit

(general). In fixed deposit (Re-investment) scheme the intrest rate is compounded

quaterly

For FD of 15 Lakh or more have to contact the Head Office.


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Mini Deposits

In this scheme the money can be deposited in the multiple of Rs.5/-. At a time themaximum amount should not exceed Rs.500/-. The amount must be deposited in cash

only. The interest is 10% per annum. If the amount is withdrawn before a period of 5

years the intrest rates are as under:

1 year 2%

2 year 3%

3 year 5%

4 year 6%

5 year & Above 8%

LOAN

At Uttaranchal Gramin Bank . we offer varoius loan facilities. Details are given under

appropiate heads. The rates given below are applicable w.e.f 15.02.2007:

Transport Loan

Housing Loan

Salary Loan

Loan against Government Deposits

Mid Term Loan

Bank Guarantee

Cash Credit Limit

FD Loan

Self Employment Loan

Education Loan

Consumer Loan


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Transport Loan

Transport loan is provided for the purchase of vehicles. Following are the interest rates:

Upto Rs. 2 Lakhs 12.25 %

Rs 2 To Rs 5 Lakh 12.75 %

Rs 5 Lakhs Above 13.00 %

For Old Vehicle 14.00 %

Against Old Vehicles Loan will be given to good & complete secure parties.

The insurance of the old vehicle will be in the name of bank .Two Wheelers will not come against Transport Vehicles . It will come

under Consumer Loan.

Housing Loan

Housing loan is provided by bank to it's customers for purchase or construction of

ouse.Follwoing are the interest rates:

Repayment ( 5 Year)Repayment ( More than 5

year Upto 120 Months)

Up to Rs 5 Lakh 10.75% 11.00 %

More than 5 Lakh and upto 20 lakh 11.00% 11.50%

More than 20 Lakh 12.00% 12.50 %

In House Loans Interest will be taken against floating pattern.

House Loan will be paid in maximum 120 months EMI.

If Loan is paid before its schedule term then 2% more of the remaining loan will

be charged as Foreclosure Charges.

The Interest rate will be 12.50% for House Loan ( Commercial) such as School,

Banquet Hall, Hotel etc.


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Loan Against Fixed Deposit

Against FDR of our bank 1% more

Against Third party FDR 2% more

Against FDR of other Bank 13.00%

Against Other bank FDR loan will be given if the FDR is in the custody of our bank.

Mid Term Loan

Bank charges 13.00% interest rates for Mid Term Loan.

Bank Guarantee

Bank Guarantee.(Fully Secure) only financial 2%

If secured against FDR 1%

This loan is given against stock of Items to Shopkeepers to promote the business. Following

are the interest rates:

Upto Rs. 2 lakhs 11.50%

Upto Rs. 5 lakhs 12.00%

Rs 5 lakhs to Rs 25 lakhs 12.50%

More than 25 Lak 13.00%

INTRODUCTION TO MICRO-FINANCE


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Microfinance refers to the provision of financial services to poor or low-income clients,

including consumers and the self-employed. The term also refers to the practice of

sustainable delivering those services.

More broadly, it refers to a movement that envisions “a world in which as many poor and

near-poor households as possible have permanent access to an appropriate range of high

quality financial services, including not just credit but also savings, insurance, and fund

transfers.”

THE CHALLENGE

Traditionally, banks have usually not provided financial services to clients with little or

no cash income. Banks must incur substantial costs to manage a client account, regardless

of how small the sums of money involved. For example, the total revenue from delivering

one hundred loans worth $1,000 each will not differ greatly from the revenue that results

from delivering one loan of $100,000. But it takes nearly a hundred times as much work

and cost to manage a hundred loans as it does to manage one. A similar equation exists

when delivering other financial services. There is a break-even point when providing

loans or deposits below which banks lose money on each transaction they make. Poor

people usually fall below it.

In addition, most poor people have few assets that can be secured by a bank as collateral.

As documented extensively by Hernando de Soto and others, even if they happen to own

land in the developing world, they may not have effective title to it. This means that the

bank will have little recourse against defaulting borrowers.

Seen from a broader perspective, it has long been accepted that the development of ahealthy na tional financial system is an important goal and catalyst for the broader goal of

national economic development (see for example Alexander Gerschenkron, Paul

Rosenstein-Rodan, Joseph Schumpeter, Anne Krueger etc.). However, national planners

and experts focus their attention mainly on developing a commercial banking sector

dealing in high-value transactions, and often neglect the delivery of services to


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households of limited means, even when these households comprise the large majority of

their populations.

Because of these difficulties, when poor people borrow they often rely on relatives or a

local moneylender, whose interest rates can be very high. An analysis of 28 studies of

informal moneylending rates in fourteen countries in Asia, Latin America and Africa

concluded that 76% of moneylender rates exceed 10% per month, including 22% that

exceed 100% per month. Moneylenders usually charge higher rates to poorer borrowers

than to less poor ones. While moneylenders are often demonized and accused of usury,

their services are convenient and fast, and they can be very flexible when borrowers run

into problems. Hopes of quickly putting them out of business have proven unrealistic,

even in places where microfinance institutions are very active.

Over the past centuries practical visionaries from the Franciscan monks who founded the

community-oriented pawnshops of the fifteenth century, to the founders of the European

credit union movement in the nineteenth century (such as Friedrich Wilhelm Raiffeisen)

and the founders of the microcredit movement in the 1970s (such as Muhammad Yunus)

have tested practices and built institutions designed to bring the kinds of livelihood

opportunities and risk management tools that financial services provide to the doorsteps

of poor people. While the success of Grameen Bank (which now serves over seven

million poor Bangladeshi women) has inspired the world, it has proved difficult to

replicate this success in practice. In nations with lower population densities, meeting the

operating costs of a retail branch by serving nearby customers has proven considerably

more challenging.

Although much progress has been made, the problem has not been solved yet, and the

overwhelming majority of people who earn less than $1 a day, especially in the rural

areas, continue to have no practical access to formal sector finance.


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BOUNDARIES AND PRINCIPLES

Theoretically, microfinance may encompass any efforts to increase access to, or improvethe quality of, financial services poor people currently use or could benefit from using.

For example, poor people borrow from informal moneylenders and save with informal

collectors. They receive loans and grants from charities. They buy insurance from state-

owned companies. They receive funds transfers through remittance networks (like

Hawala). They bury jewellery in secret places near their homes, ask relatives to look after

their money, and save for family weddings by raising chickens.

There are not many bright lines that can sharply distinguish microfinance from similaractivities. Claims could be made that a government that orders state banks to open

deposit accounts for poor consumers, or a moneylender that engages in usury, or a charity

that runs a heifer pool are engaged in microfinance. However, it is generally agreed that

microfinance is about giving poor people a ‘hand up’, not a ‘hand out’ by providing them

with expanded access to financial services. Furthermore, correcting the problem of access

is best done by expand ing the number of financial institutions available to them, as well

as the capacity of those institutions. In recent years there has been increasing emphasis on

expanding the diversity of those institutions as well, since different institutions serve

different needs.

Some principles that summarize a century and a half of development practice were

encapsulated in 2004 by Consultative Group to Assist the Poor (CGAP) and endorsed by

the Group of Eight leaders at the G8 Summit on June 10, 2004:

1. Poor people need not just loans but also savings, insurance and money transfer

services.

2. Microfinance must be useful to poor households: helping them raise income, build

up assets and/or cushion themselves against external shocks.

3. “Microfinance can pay for itself.” Subsidies from donors and government are

scarce and uncertain, and so to reach large numbers of poor people, microfinance

must pay for itself.


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4. Microfinance means building permanent local institutions.

5. Microfinance also means integrating the financial needs of poor people into acountry’s mainstream financial system.

6. “The job of government is to enable financial services, not to provide them.”

7. “Donor funds should complement private capital, not compete with it.”

8. “The key bottleneck is the shortage of strong institutions and managers.”

9. Donors should focus on capacity building.

10. Interest rate ceilings hurt poor people by preventing microfinance institutions

from covering their costs, which chokes off the supply of credit.

11. Microfinance institutions should measure and disclose their performance – both

financially and socially.

Microfinance can also be distinguished from charity. It is better to provide grants to

families who are destitute, or so poor they are unlikely to be able to generate the cash

flow required to repay a loan. This situation can occur for example, in a war zone or after

a natural disaster.

DEBATES AT THE BOUNDARIES

There are several key debates at the boundaries of microfinance.

Practitioners and donors from the charitable side of microfinance frequently argue for

restricting microcredit to loans for productive purposes – such as to start or expand a

microenterprise. Those from the private sector side respond that because money is

fungible, such a restriction is impossible to enforce, and that in any case it should not be

up to rich people to determine how poor people use their money.

Perhaps influenced by traditional Western views about usury, the role of the traditional

moneylender has been subject to much criticism, especially in the early stages of modern


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microfinance. As more poor people gained access to loans from microcredit institutions

however, it became apparent that the services of moneylenders continued to be valued.

Borrowers were prepared to pay very high interest rates for services like quick loan

disbursement, confidentiality and flexible repayment schedules. They did not always see

lower interest rates as adequate compensation for the costs of attending meetings,

attending training courses to qualify for disbursements or making monthly collateral

contributions. They found also it distasteful to be forced to pretend they were borrowing

to start a business, when they were often borrowing for other reasons (such as paying for

school fees, dealing with health costs or securing the family food supply). [10] The more

recent focus on inclusive financial systems (see section below) affords moneylendersmore legitimacy, arguing in favour of regulation and efforts to increase competition

between them to expand the options available to poor people.

Modern microfinance emerged in the 1970s with a strong orientation towards private

sector solutions. This resulted from evidence that state-owned agricultural development

banks in developing countries had been a monumental failure, actually undermining the

development goals they were intended to serve (see the classic compilation edited by

Adams, Graham & Von Pischke). Nevertheless public officials in many countries hold adifferent view, and continue to intervene in microfinance markets.

There has been a long-standing debate over the sharpness of the trade-off between

'outreach' (the ability of a microfinance institution to reach poorer and more remote

people) and its 'sustainability' (its ability to cover its operating costs -- and possibly also

its costs of serving new clients -- from its operating revenues). While it is generally

agreed that microfinance practitioners should seek to balance these goals to some extent,

there are a wide variety of strategies, ranging from the minimalist profit-orientation of

BancoSol in Bolivia to the highly integrated not-for-profit orientation of BRAC in

Bangladesh. This is true not only for individual institutions, but also for governments

engaged in developing national microfinance systems.

Micro financial services are needed everywhere, including the developed world.

However, in developed economies intense competition within the financial sector,


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combined with a diverse mix of different types of financial institutions with different

missions, ensures that most people have access to some financial services. Efforts to

transfer microfinance innovations such as solidarity lending from developing countries to

developed ones have met with little success

FINANCIAL NEEDS OF POOR PEOPLE

In developing economies and particularly in the rural areas, many activities that would be

classified in the developed world as financial are not monetized: that is, money is not

used to carry them out. Almost by definition, poor people have very little money. But

circumstances often arise in their lives in which they need money or the things moneycan buy.

In Stuart Rutherford’s recent book The Poor and Their Money, he cites several types of

needs:

• Lifecycle Needs: such as weddings, funerals, childbirth, education, homebuilding,

widowhood, old age.


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• Personal Emergencies : such as sickness, injury, unemployment, theft, harassment

or death.

• Disasters: such as fires, floods, cyclones and man-made events like war or

bulldozing of dwellings.

• Investment Opportunities: expanding a business, buying land or equipment,

improving housing, securing a job (which often requires paying a large bribe), etc.

Poor people find creative and often collaborative ways to meet these needs, primarily

through creating and exchanging different forms of non-cash value. Common substitutes

for cash vary from country to country but typically include livestock, grains, jewellery

and precious metals.

WAYS IN WHICH POOR PEOPLE MANAGE THEIR MONEY

Rutherford argues that the basic problem poor people as money managers face is to

gather a ‘usefully large’ amount of money. Building a new home may involve saving and

protecting diverse building materials for years until enough are available to proceed with

construction. Children’s schooling may be funded by buying chickens and raising them

for sale as needed for expenses, uniforms, bribes, etc. Because all the value is

accumulated before it is needed, this money management strategy is referred to as ‘saving

up’.

Often people don’t have enough money when they face a need, so they borrow. A poor

family might borrow from relatives to buy land, from a moneylender to buy rice, or from

a microfinance institution to buy a sewing machine. Since these loans must be repaid by

saving after the cost is incurred, Rutherford calls this ‘saving down’. Rutherford's point is

that microcredit is addressing only half the problem, and arguably the less important half:

poor people borrow to help them save and accumulate assets. Microcredit institutions

should fund their loans through savings accounts that help poor people manage their

myriad risks.


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STUART RUTHERFORE. THE POOR AND THEIR MONEY

Most needs are met through mix of saving and credit. A benchmark impact assessment ofGrameen Bank and two other large microfinance institutions in Bangladesh found that for

every $1 they were lending to clients to finance rural non-farm micro-enterprise, about

$2.50 came from other sources, mostly their clients’ savings. This parallels the

experience in the West, in which family businesses are funded mostly from savings,

especially during start-up.

Recent studies have also shown that informal methods of saving are very unsafe. For

example a study by Wright and Mutesasira in Uganda concluded that “those with nooption but to save in the informal sector are almost bound to lose some money – probably

around one quarter of what they save there.”

The work of Rutherford, Wright and others has caused practitioners to reconsider a key

aspect of the microcredit paradigm: that poor people get out of poverty by borrowing,

building microenterprises and increasing their income. The new paradigm places more

attention on the efforts of poor people to reduce their many vulnerabilities by keeping

more of what they earn and building up their assets. While they need loans, they may find

it as useful to borrow for consumption as for microenterprise. A safe, flexible place to

save money and withdraw it when needed is also essential for managing household and

family risk.

CURRENT SCALE OF MICROFINANCE OPERATIONS

No systematic effort to map the distribution of microfinance has yet been undertaken. A

useful recent benchmark was established by an analysis of ‘alternative financialinstitutions’ in the developing world in 2004. The authors counted approximately 665

million client accounts at over 3,000 institutions that are serving people who are poorer

than those served by the commercial banks. Of these accounts, 120 million were with

institutions normally understood to practice microfinance. Reflecting the diverse

historical roots of the movement, however, they also included postal savings banks (318

million accounts), state agricultural and development banks (172 million accounts),


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financial cooperatives and credit unions (35 million accounts) and specialized rural banks

(19 million accounts).

Regionally the highest concentration of these accounts was in India (188 million accounts

representing 18% of the total national population). The lowest concentrations were in

Latin American and the Caribbean (14 million accounts representing 3% of the total

population) and Africa (27 million accounts representing 4% of the total population).

Considering that most bank clients in the developed world need several active accounts to

keep their affairs in order, these figures indicate that the task the microfinance movement

has set for itself is still very far from finished.

By type of service “savings accounts in alternative finance institutions outnumber loans

by about four to one. This is a worldwide pattern that does not vary much by region.”

An important source of detailed data on selected microfinance institutions is the Micro

Banking Bulletin. At the end of 2006 it was tracking 704 MFIs that were serving 52

million borrowers ($23.3 billion in outstanding loans) and 56 million savers ($15.4

billion in deposits). Of these clients, 70% were in Asia, 20% in Latin America and the

balance in the rest of the world.

As yet there are no studies that indicate the scale or distribution of ‘informal’

microfinance organizations like ROSCAs and informal associations that help people

manage costs like weddings, funerals and sickness. Numerous case studies have been

published however, indicating that these organizations, which are generally designed and

managed by poor people themselves with little outside help, operate in most countries in

the developing world

"Inclusive financial systems"

The microcredit era that began in the 1970s has lost its momentum, to be replaced by a

‘financial systems’ approach. While microcredit achieved a great deal, especially in

urban and near-urban areas and with entrepreneurial families, its progress in delivering

financial services in less densely populated rural areas has been slow. Another major goal

of the microcredit movement was to put the traditional moneylender, who typically


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charges at least 10% a month and often much more, out of business. There is little

evidence of progress towards this goal.

The new financial systems approach pragmatically acknowledges the richness of

centuries of microfinance history and the immense diversity of institutions serving poor

people in developing world today. It is also rooted in an increasing awareness of diversity

of the financial service needs of the world’s poorest people, and the diverse settings in

which they live and work.

Brigit Helms in her book 'Access for All: Building Inclusive Financial Systems',

distinguishes between four general categories of microfinance providers, and argues for a

pro-active strategy of engagement with all of them to help them achieve the goals of the

microfinance movement.

Informal financial service providers

These include moneylenders, pawnbrokers, savings collectors, money-guards,

ROSCAs, ASCAs and input supply shops. Because they know each other well

and live in the same community, they understand each other’s financial

circumstances and can offer very flexible, convenient and fast services. These

services can also be costly and the choice of financial products limited and very

short-term. Informal services that involve savings are also risky; many people lose

their money.

Member-owned organizations

These include self-help groups, credit unions, and a variety of hybrid

organizations like ‘financial service associations’ and CVECAs. Like their

informal cousins, they are generally small and local, which means they have

access to good knowledge about each others’ financial circumstances and can

offer convenience and flexibility. Since they are managed by poor people, their

costs of operation are low. However, these providers may have little financial skill

and can run into trouble when the economy turns down or their operations

become too complex. Unless they are effectively regulated and supervised, they


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can be ‘captured’ by one or two influential leaders, and the members can lose

their money.

NGOs

The Microcredit Summit Campaign counted 3,133 of these microcredit NGOs

lending to about 113 million clients by the end of 2005. Led by Grameen Bank

and BRAC in Bangladesh, Prodem in Bolivia, and FINCA International,

headquartered in Washington, DC, these NGOs have spread around the

developing world in the past three decades. They have proven very innovative,

pioneering banking techniques like solidarity lending, village banking and mobile banking that have overcome barriers to serving poor populations. However, with

boards that don’t necessarily represent either their capital or their customers, their

governance structures can be fragile, and they can become overly dependent on

external donors.

Formal financial institutions

In addition to commercial banks, these include state banks, agricultural

development banks, savings banks, rural banks and non-bank financial

institutions. They are regulated and supervised, offer a wider range of financial

services, and control a branch network that can extend across the country and

internationally. However, they have proved reluctant to adopt social missions, and

due to their high costs of operation, often can’t deliver services to poor or remote

populations. The increasing use of alternative data in credit scoring, such as trade

credit is increasing commercial banks' interest in microfinance.

With appropriate regulation and supervision, each of these institutional types can bring

leverage to solving the microfinance problem. For example, efforts are being made to

link self-help groups to commercial banks, to network member-owned organizations

together to achieve economies of scale and scope, and to support efforts by commercial

banks to ‘down-scale’ by integrating mobile banking and e-payment technologies into

their extensive branch networks.


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CRITICISMS

Some proponents of microfinance have asserted, without offering credible evidence, that

microfinance has the power to single-handedly defeat poverty. This assertion has been

the source of considerable criticism. In addition, research on the actual effectiveness of

microfinance as a tool for economic development remains slim, in part owing to the

difficulty in monitoring and measuring this impact.

There has also been much criticism of the high interest rates charged to borrowers. The

real average portfolio yield cited by the a sample of 704 microfinance institutions that

voluntarily submitted reports to the MicroBanking Bulletin in 2006 was 22.3% annually.

However, annual rates charged to clients are higher, as they also include local inflation

and the bad debt expenses of the microfinance institution. Muhammad Yunus has

recently made much of this point, and in his latest book argues that microfinance

institutions that charge more than 15% above their long-term operating costs should face

penalties.

The role of donors has also been questioned. The Consultative Group to Assist the Poor

(CGAP) recently commented that "a large proportion of the money they spend is not

effective, either because it gets hung up in unsuccessful and often complicated fundingmechanisms (for example, a government apex facility), or it goes to partners that are not

held accountable for performance. In some cases, poorly conceived programs have

retarded the development of inclusive financial systems by distorting markets and

displacing domestic commercial initiatives with cheap or free money."

There has also been criticism of microlenders for not taking more responsibility for the

working conditions of poor households, particularly when borrowers become quasi-wage

labourers, selling crafts or agricultural produce through an organization controlled by the

MFI. The desire of MFIs to help their borrower diversify and increase their incomes has

sparked this type of relationship in several countries, most notably Bangladesh, where

hundreds of thousands of borrowers effectively work as wage labourers for the marketing

subsidiaries of Grameen Bank or BRAC. Critics maintain that there are few if any rules

or standards in these cases governing working hours, holidays, working conditions, safety

or child labour, and few inspection regimes to correct abuses. Some of these concerns

have been taken up by unions and socially responsible investment advocates.


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Microfinance and Small Scale Farming Business(Laghu & Kutir Udyog )

Recognition of the importance of microfinance as a crucial development tool for poverty

reduction has increased during the last two decades. The United Nations, in its General

Assembly Resolution 52/194, passed on 18 December 1997, noted that in many

countries, microcredit programmes have succeeded in generating productive self

employment by providing access to small capital for people living in poverty as well as

increased participation in the mainstream economic and political process of society. This

publication provides orientation, basic considerations and general principles for those

institutions and organizations that provide credit and microfinance services to the farming

sector, particularly the small- scale farming allied products sector. The publication alsoreaches out to the users of credit and microfinance services and to important stakeholders,

including inland farmers associations and cooperatives; seeds and other government

departments and institutions concerned with the management, conservation and use of

water bodies; local government authorities; and finally, individuals and groups of ‘kutir

Udyog’ and women in village communities.

Micro finance is the provision of a wide range of financial services, such as deposits,

loans, Payment Service, Money Transfer and insurance.

The demand for financial services in the village sector is diverse and requires differential

financial products and services. Microfinance is just one means in the continuum of

providing financial services to cater for this demand. Characterized by small loans,

microfinance has inherent limitations in terms of financing the capital investment needs

of the fishing industry. It should therefore not replace traditional lending products from

mainstream financial institutions, since they are still required to finance large-scale

investment needs and priorities necessary for fisheries growth and development and, most

important, for the implementation of the responsible fisheries.

Inadequate supply of credit is an important constraint to enhancing production in many

developing countries. Making credit available, to rural households in general and fishers

in particular, is thus considered essential to alleviate poverty and promote economic

development. Although informal credit markets operate widely in rural areas,


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for alternatives. Most of the financial institutions with waning donor support have moved

away from subsidized, no-collateral loans to commercial lending with requisite risk

coverage. The donor community has started promoting replication of successful

microfinance methodologies. In this context, an attempt is made in this paper to analyse

various financial service delivery methodologies, including microfinance methodologies

and their applicability to provide financial services to fishers.

Microfinance in agriculture and Allied Products: Basic considerations

Not much has been written about specific microfinance programmers for farming allied

products ‘kutir Udyog’ because they are usually subsumed in the overall discussion of

microfinance for the rural poor. But while the concepts and principles of microfinance

have a general applicability, there are particular considerations that are unique to ‘Kutir

Udyog’ communities that may require special attention. The guidelines try to address

these concerns while adhering to the generally acceptable “best practices” in the

microfinance industry. However, the guidelines are by no means comprehensive and

definitive since the microfinance field is still evolving and “best practices” change in

response to changing contexts and environments. As mentioned in the introduction, the

guidelines on microfinance in ‘Kutir Udyog’ and aquaculture are complementary to themanagement guidelines on revolving loan funds and credit programmes for communities

first published by FAO in 1989.

The guidelines provide general principles and basic considerations for those involved in

providing microfinance services to the village sector or for those who intend to include

‘Kutir Udyog’ and Samll farming communities as part of the client base of their

operation. The focus is on credit and savings since these are the areas where donor

support is concentrated. Because of the diversity of the demand for and suppliers ofmicrofinance services, the guidelines do not prescribe nor subscribe to a particular

methodology or an institutional mechanism but present options with the most relevance

to communities. The overall objective is for those concerned to tailor lending

methodologies and procedures appropriately so that they best serve the financial needs of

the ‘Kutir Udyog’ and Small farming communities concerned.


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2 BACKGROUND AND PRINCIPLES OF MICROFINANCE

The emergence of microfinance as an alternative financial delivery mechanism was a

response to the failure of past efforts by government and international agencies

effectively to provide financial services to the poor. Subsidized and directed credit

programmes implemented in the 1980s were saddled by poor loan recoveries,

inefficiencies and high transaction costs, among others. This led to the piloting of bold

experiments and new approaches utilizing market-based solutions to reach the majority of

the poor who had been excluded from formal credit sources. From rapid disbursements of

subsidized loans to target sectors and populations, the focus was shifted towards setting

up and building local institutions that catered for the poor. This resulted in the emergence

of microfinance institutions (MFIs) that serve the poor. MFIs initially started out by

providing microcredit but have now broadened their services to include other financial

products.

CURRENT MARKET IN GOPSHWEAR & REMOTE AREA OF CHAMOLI

DISTRICT: -

The market in the District Chamoli is one of the largest ones in the Uttarakhand. In

Gopshwer and surrounding area government has licensed around 1956persons. Enormous

quantities are thereby produced in the district.

At the completion of the year 2007, 2643tons of Milk were produced for sale.

The Goat was recorded up to 42,000 quintals.

There are mainly six streams in the dist. and the government distributing almost 60,000

seeds in the said streams.

BRIEF OVERVIEW OF THE BUSINESS

Following categories of persons are associated with the business: -

• Producer (Farmer or A unit of ‘Kutir Udyog’).

• Distributors (Samit or collection center).

• Vendors (sellers).


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In case of Milk there are almost 30000-40000 people associated with ‘Samati’. The

monthly income is approximately 5000Rs. The daily milk ranges from 5-20kgs. The

milkmen either sell to the distributors or sell themselves in the market. They sell the

distributors depending upon production and products of the milk. The price ranges from

12-19Rs/kg. These persons need loans to buy the equipments and for constructing places.

The loans needed range from 30,000-90,000 Rs at low interest rate. The monthly mode of

payment is favored.

Distributors are mostly few in numbers around up to hundred. The monthly income is

more than Rs. 10,000 to 22,000/month. They mostly deal with the milk and allied

products and private dairy holders to maintain the supply in the market. These carry the

bulk to the sight of consumption.

The people concerned need small load carrier vehicles, concrete construction for storage.

Regular supply of raw material ‘Chaara’ and money to buy more from the source

producers for these they need loans around Rs.1, 00,000-2,50,000 at minimum rate of

interest. Monthly pay back system is preferred. Margin here is Rs. 5-12/kg.

There are more than one thousand fifteen sellers at a particular market. They financially

week and poor. The monthly income is around Rs.5000. mostly dissatisfied with their

jobs due to interruption in market supply. These people need bank loans in order to

broaden the era of the business. The amount required is around Rs.30, 000 and mode of

payment preferred is monthly. These vendors either pay on prompt basis or after sale to

their distributors. The margin for them is around 14Rs./kg.


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3.1 DATA ANALYSIS AND INTERPRETATION

Q No.1: i) Awareness about Uttaranchal Gramin Bank

S.No. Response Percent

Aware 90

Not Aware 10

10%

90%

Awarw

Not Aware

INTERPRETATION

v 90% of the parsons related to ‘Kutir Udyog’ are completely aware of Uttaranchal

Gramin Bank.

v 10% of people are not aware or partially aware bout Uttaranchal Gramin Bank.


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II) RATING UTTARANCHAL GRAMIN BANK

S.No. Response Percentage

1 Excellent 27%

2 Good 22%

3 Average 21%

4 Poor 31%

22%21%

27%30% Excellent

Good

Average

Poor

INTERPRETATION

v 27% of the people concerned with ‘Kutir Udyog’ rate the overall performance rate

the overall performance rate as excellent.

v 22% of the peoples concerned rate Uttaranchal Gramin Bank as good.

v 21% of the peoples rate Uttaranchal Gramin Bank as average performance bank.

v Rest 30% rate the performance as poor.


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Q No.2: Knowledge about the scheme for general public.


1 Aware 30

2 Not Aware 70

70%

30% Awarw

Not Aware

INTERPRETATION

v 30% of the people concerned with ‘Kutir Udyog’ know about the scheme for

general public.

v 70% of the concerned people have no information about schemes for general

public.


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Q No. 3: Awareness about products and services.


1 Aware 28%

2 Not Aware 72%

72%

28%

Awarw

Not Aware

INTERPRETATION

v 28% of the peoples are aware of the different products and services of Uttaranchal

Gramin Bank.

v 72% of the people are not aware of the products and services of the bank.


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Q No.4: Problems in information collection.


1 Yes 34%

2 No 66%

34%

66%

Yes

No

INTERPRETATION

v 34% of the people have faced problems in collecting information about the bank.

v 66% of the people have collected the information with out any hindrance.


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Q No.5: Other bank providing any facility


1 Yes 15%

2 No 85%

15%

85%

Yes

No

INTERPRETATION

v No other bank is providing any facility to the pesiculture sector.


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Q No.6: Experience with Uttaranchal Gramin Bank

S. No. Response Percentage

1 delighted 16%

2 satisfied 70%

3 dissatisfied 13%

4 highly dissatisfied 1%

1%

16%13%

70%

delighted

satisfied

dissatisfied

highly dissatisfied

INTERPRETATION

v 16% of the peoples concerned are delighted with services provided by Uttaranchal

Gramin Bank.v 70% of the people concerned are satisfied with services provided by Uttaranchal

Gramin Bank.

v 13% of the peoples concerned are dissatisfied with services provided by

Uttaranchal Gramin Bank.

v 1% of the people concerned are highly dissatisfied with services provided by

Uttaranchal Gramin Bank.


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Q No.7: Monthly Income


1 3000-5000 5%

2 5000-10,000 31%

3 10,000- above 64%

INTERPRETATION

v 5% of the people concerned (vendors and some catchers) have their monthly

income form 3000-5000.

v 31% of the people concerned have their monthly income from 5000-10000.

v 64% of the people concerned (dealers) have their monthly income from 10,000-

above.

5%

31%

64%

3000-5000

5000-10,000

10,000- above


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Q No.8: Time associated with business.

S.No. Response Percentage

1 1-10 years 30%

2 10-20 years 20%

3 20 - 30 years 25%

4 30 - 50 years 25%

30%25%

25% 20%

1-10 years

10-20 years

20 - 30 years

30 - 50 years

INTERPRETATION

v 30% of the peoples are concerned with pesiculture from 1-10 years.

v 20% of the peoples are associated with the business from 10-20 years.

v 25% of the peoples are associated from 20-30 years.

v 25% of the peoples are associated with the business form 30-40 years.


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Q No.9: Kind of facility needed


1 Deposit Schemes 20%

2 Loans / Advances 80%

80%

20%

Deposit Schems

Loans / Advances

INTERPRETATION

v 20% of the people have concerned favored deposit schemes.

v Rest 80% of the peoples favored Loans/Advances.


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Response Percentage

Monthly 70%

Quarterly 20%

Bi annually 8%

Annually 2%

70%

2%8%

20%Montehely

Quarterly

Bi annually

Annually

INTERPRETATION

v 70% of the concerned people (Vendors) favour Monthly pay-back system

v 20% of the concerned favor quarterly pay-back system.

v 8% of the people associated favor biannually pay-back system.

v 2% of the concerned people favour annually pay-back system.


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4.1 FINDING

v During the survey it was found that the economic condition of theassociates of ‘Kutir Udyog’ is below poverty line (about 85 %).and about

66% of the ‘Samati’ including self help group live below poverty line.

v They do not believe in these type of scheme (Microfinance).

v They want to expand there business for better living standard but they

don’t know how to achieve that.

v For the expansion of there business they need economic support.

v They don’t know much about scheme and don’t know the exactly the

procedure which to follow to take the advantage of this scheme.

v The monthly income in this business varies i.e. in summer the sale is low

and hence the low profit while in winter the sale of fish increase and

hence the profit also increase.


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4.2 RECOMMENDATIONS\SUGGESTIONS

v The comprehensive analysis of data and surveys conducted by me lead to theconclusion that the farmer’s dealers, ‘Samati’, Self help group and other ‘Kutir

Udyog’ should be provided with the micro finance ranging from 50,000-to-

4,50,000 so that they can expand business and make better living.

v Majority of the respondents (90%) are aware about Uttaranchal Gramin Bank and

are satisfied with the performance of bank.

v Most of the respondents (64%) in pesiculture have monthly income above 10,000.

v More then (60%) of the people are concerned with ‘Kutir Udyog’ from more than

10 years.

v The majority of the people (80%) associated with ‘Kutir Udyog’ prefer loan for

trade.


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4.3 CONCLUSION:-

We know that Uttaranchal Gramin Bank is one of the leading bank in the Uttarakhandstate. The economic condition of ‘Kutir Uoydog’, Farmer’s vendor, sellers & dealers are

very bad. There living standard of these people is very low Uttaranchal Gramin Bank

being the commercial bank should provide the economic support to these people.

Uttaranchal Gramin Bank is the only bank which provides the micro finance very

effectively. There are various people who are taking benefit from these schemes.

Micro finance is the financing of the people who are having the monthly income less than

10,000.


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BIBLIOGRAPHY –

Books –

1. K G KARMAKAR Microfinance In India 2004, SAGE India

2. Rajagopalan S Microfinance: Challenges 2002, Paperback

And Opportunities

3 Lalitha N Readings In Microfinance

4 Sharma Harsh Managing Microfinance:

Bhargavarajeev -A Corporate Approach

Magazine -

1. Yojana

2. Financial Cronical

3. The Economic Times

Websites –

http://www.bagchee.com/

http://www.flipkart.com

www.thehindubusinessline.com

http://www.almoraurbanbank.com

finance.indiamart.com

www.rupeetimes.com

indiaearnings.moneycontrol.com


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Annexure –

Questioner -

Q No.1: i) Awareness about Uttaranchal Gramin Bank

ii) Rating Uttaranchal Gramin Bank

Q No.2: Knowledge about the scheme for general public.

Q No. 3: Awareness about products and services.

Q No.4: Problems in information collection.

Q No.5: Other bank providing any facility

Q No.6: Experience with Uttaranchal Gramin Bank

Q No.7: Monthly Income

Q No.8: Time associated with business.

Q No.9: Kind of facility needed

Q No.10: Type of Loan

Q No.11: Mode of payment

Q No.12: Annual output

A Study of _micro Finance_ in Gopeshwar & Chamoli District

Documents

Transcript of A Study of _micro Finance_ in Gopeshwar & Chamoli District