Micro Finance, Meaning & Concept Unit 1 | Micro Finance Notes | B.Com 4th Sem | CBCS Pettern

In this page we have uploaded the Guahati University Micro-finance B.COM 4th Semester Notes 

Micro Finance, Meaning & Concept | Micro Finance Notes | B.Com 4th Sem | CBSE Pettern |
Gauhati University Micro Finance Notes 

Unit 1 : Micro Finance: Meaning & Concept 

1. Define Microfinance? (GU. B. COM 2021) 

Answer: Microfinance - also known as microcredit - is a way to give small business owners and entrepreneurs the opportunity to earn money. These small and isolated businesses often do not have access to regular sources of funding from large corporations. This means that it is difficult to access loans, insurance, and investments that will help grow their business. In fact, microfinance provides loans, credit, access to savings accounts and even insurance policies and transfers to a small business owner and entrepreneur. There are many such businesses in developing lands.

2. Mention the various types of MicroFinance in India?

Answer: Type sof Micro Finance are: (i) Joint Liability Group (JLG), (ii) Self Help Group (SHG), (iii) The Grameen Bank Model, (iv) Rural Cooperatives.

3. Give the Main goal of financial inclusion.(GU. B. COM 2021) 

Answer: Each type of microfinance institution is different in many ways but serves the same purpose - investment. Due to their frameworks, some models have not been as successful as others in achieving this goal. In addition to the above, small financial institutions can also be divided into large, medium and small. These institutions vary depending on location access, infrastructure, staffing capacity, funding and borrowing processes, income and operational efficiency.

4. Give the Importance Of Microfinance In India.

Answer: The concept of small business has been highlighted since the 1970s with the aim of developing the poorest part of society and promoting economic growth. Its value has increased during the global financial crisis when trust in an organized banking system shakes. Microfinance in India plays a major role in the development of India. It acts as a poverty alleviation drug for people living in rural areas. It aims to help marginalized communities achieve higher levels of manufacturing and income security at the local and community level. The great importance of small investments in India is that they provide access to the capital for small businesses. As mentioned above the microfinance in India provides loans, insurance, access to savings accounts.

5.Provide two key features of Micro Finance?

Answers: a) Small loans do not require any collateral: The main feature of a small loan under microfinance is that it does not require any collateral. Borrowers are not.

b) Borrowers are usually poor people: The purpose of small loans is to lend to needy people with useful hands. So usually the financiers are the less developed part of India as well as the small business owners or entrepreneurs. 

6. What are the small financial channels?

Answer: There are two microfinance stations in India: SHG-Bank Linkage Program (SBLP) â "In 1992 NABARD founded the station. This model encourages women to unite together to form a group of 10 members. 15. When all the women in the backlog of classes donate their individual funds to the group from time to time. After that, loans are given to group members for their contributions. that once these self-help groups have reached a level of stability, they operate almost independently with minimal support from NABARD, SIDBI, and non-governmental organizations 

7. Name some Small Income Companies in India.

Answer: Some of India's microfinance companies are as follows: a) Arohan Financial Banks, b) BSS microfinance pvt ltd., C) Cashpor microcredit, d) Equitas microfinance pvt ltd, e) Asirvad microfinance pvt ltd, 6. Bandhan financial services pvt ltd.

7. What is a Self-Help Group (SHG)?

Answer: The Self-Help Group (SHG) is a registered or unregistered group of small business people with the same social and economic background voluntarily, who come together to save small amounts regularly, to agree to collectively contribute to one fund and meet their urgent needs. by helping each other. Team members use collective ingenuity and peer pressure to ensure the proper use of credit termination and timely payment. In fact, peer pressure has also been recognized as a substitute for effective bail.

8. What are the benefits of earning money through spending SHGS ? 

Answer: An economically poor person gains power as part of a group. In addition, SHGS funding reduces operating costs for both lenders and lenders. Although lenders have to carry only one SHG account instead of several smaller accounts, borrowers as part of SHG reduce travel costs (to and from the branch and other locations) to complete paperwork and lose working days on loan campaigns.

Gauhati University B.com 4th Sem Micro Finance Notes and Important Questions Answers 

9. What are the latest indicators of Micro Credit payments?

Answer: With a view to helping banks move smoothly and more effectively with the poor, the Self-Help Groups (SHGs) small-scale debt research project with banks was launched by NABARD in 1991-92 with the aim of simplifying and more. purposeful banking with the poor. The RBI then advised commercial banks to actively participate in the merger. The plan has been handed over to RRBs and co-operative banks. The number of SHGS linked to banks was 4,61,478 as at 31 March 2002. This means that an estimated 7.87 million poorest households have been admitted to the official banking services since March 31,2002. More than 90 percent of banks linked to banks are women-only groups. Accumulated repayment of bank loans on these SHGs stands at Rs. 1026.34 crores as of March 31, 2002 with an average loan of Rs. 22,240-00 per SHG and Rs. 1,316-00 per family. About the smart communication of the model, while the Model I, that is. directly to the SHGs without the intervention / assistance of any NGO now accounts for 16%, ModelII, i.e.. directly to the SHGS with the assistance of NGOs and other legal entities up to 75% and Model III, viz. with an NGO as a facilitator and funding agency represents 09% of all communications. Although 488 provinces in all provinces / UTs are covered under this program, 444 banks including 44 commercial banks (including 17 private companies), 191 RRBs and 209 co-operative banks and 2,155 NGOs are now linked to SHG- bank affiliate program.

10.Is Foreign Investment Approved for Micro Credit Projects?

Answer: Government. India ' Indian Indigenous Investment (NRI) investment to encourage international participation in small debt projects. This puts debt services at a low level of financing for small producers and small businesses in rural and urban areas.

Microfinance Unit wise Notes





Microfinance Meaning & Concepts

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Microfinance Institutions

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Microfinance In India

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Management of MFIs

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Legal and Regulatory Framework for Microfinance

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