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Banking Set-up for Microfinancing in Urban Areas:
Banks are the major channels of financing urban poor.
All the banks need to do priority sector lending and also provide microfinance services under SHG bank linkage pro-
gramme. Recently private banks like HDFC, ICICI, Axis, and YES bank have also entered into retail micro financing
and started functioning in few states. It will be good to have a glimpse of the initiatives being taken up by these private
sector banks in the report.
Examples of Private Microfinance Institutions in Urban Areas:
There are well-proven examples of MFIs
doing micro financing in urban areas. Members shared names of some of the leading microfinance institutions
working in urban areas: Bandhan Financial Services Pvt. Ltd.; BASIX (through Bhartiya Samruddhi Finance Ltd.);
Arohan Financial Services Pvt. Ltd.; CASHPOR Micro Credit; SKS Microfinance Ltd.; SONATA Finance (P) Ltd.;
Ujjivan Microfinance; Spandana Spoorthy Financial Ltd.; Midland Microfinance; Utkarsh Micro Finance Pvt. Ltd.;
and Janalakshmi Financial Services Pvt. Ltd.
Members also shared the example of microfinancing by Drishtee Foundation which provides MF services to the
individuals as a business correspondent of State Bank of India. Drishtee in collaboration with Jantaa Foundation also
provides education loans to the students to pursue primary and vocational education. Members feel that the model of
Drishtee can be very useful in case of people with disabilities (PwDs), older persons and other segment of population
living in urban and rural areas.
Members shared some of the good examples of urban cooperative banks and urban thrift and credit cooperatives that
are providing microfinance services to the urban poor:
•
SEWA bank, Ahmedabad, Gujarat
•
Cuttack Urban Cooperative Bank, Cuttack
•
Bhagini Nivedita Sahakari Bank, Pune,Maharashtra
•
Mann Deshi Mahila Sahakari Bank (MDMSB), Maharashtra
•
Apni Sewa Sahkari Samiti, district Jaipur, Rajasthan
•
Mahila SEWA Urban Cooperative Thrift and Credit Society, New Delhi
Members also quoted names of two scheduled urban cooperative banks Cosmos and Saraswat urban cooperative bank
and suggested that these banks can also be used for providing financial services to the urban poor. They also suggested
that government need to promote such established urban cooperatives banks to cater to the needs of the urban poor.
Finally, members suggested for the coverage of financial cooperatives especially urban cooperative banks in the report.
Housing Microfinance:
Giving the scenario of housing microfinance, members informed that the middle class
people who have a steady cash flow like salary are able to get credit for house at a normal rate of interest from banks,
however people living below poverty line and not having regular source of income get loans at a high rate. We need to
think on the need for financial products for sectors which are not familiar in the formal financial institution.
Coverage of Microfinancing for Elderly:
Members shared the scenario of elderly in India and informed about
the initiatives that have been taken up by Help Age India. Help Age India could organize nearly 42,000 rural elderly
men and women into more than 3,500 Elders Self Help Groups (ESHGs) and their higher order federations, over the
past five to eight years. Moreover, 930 ESHGs are established in contiguous flood affected villages of North Bihar and
a similar number from the mother experiment in Tamil Nadu and Kerala. These SHGs are federated further and there
is an independently managed Apex federation with direct credit linkage of the Groups with NABFIN. The ESHGs and
their higher-order federations, similar in structure and style as the Self-Help Groups of women have been working on
providing age appropriate livelihoods and livelihood credit.
