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Source: Microfinance India (mFI) 2007

Table 1: Overview of Microfinance in India

With nearly 350 million poor people and the formal banking sector meeting the credit needs of just 30% of households, there is enormous unmet demand for microfinance services. The majority of the poor do not have access to savings, credit, and other financial services like insurance, remittance, relying instead on expensive and unreliable informal channels for their financial service needs. Unmet credit demand in the country is estimated as high as USD 10 to 30 billion annually.

Up to March 31st, 2006, a total of 2.2 million SHGs have received cumulative loans of over Rs. 1.14 billion from commercial banks. During the sole 2005-06 fiscal year, banks participating in the SHG-bank linkage program financed 620,000 new SHGs. The amount of loans disbursed by banks to SHGs during this fiscal year amounts to Rs. 44,990 million. There was growth of 39% over the previous year's figure of 539,000 new SHGs linked to banks.

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* Contributed by: -
Raghavendra Badaskar,
PGP II,
T. A. Pai Management Institute, Manipal.