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MICROFINANCE REPORTSStatus of Microfinance in India 2012 Report released by NABARD


NABARD has made its annual report on the Microfinance sector in India available for download. It can be downloaded at the link below:

MICROFINANCE REPORTSStatus of Microfinance in India 2012 Report released by NABARD


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Status of Microfinance in India Report -2011-12 NABARD – PDF

Extracts from the Status of Microfinance in India 2012 Report are given below :


The initiative of 1992 to make the traditional and formal banks to extend financial services to deprived sections through informal Self Help Groups (SHGs), has now blossomed into a “monolith” micro Finance initiative. It has been recognized as a decentralized, cost-effective, and fastest-growing microfinance initiative in the world, enabling over 103 million poor households’ access to a variety of sustainable financial services from the banking system by becoming members of nearly 8 million SHGs. The linkage with banks has provided the members of the Groups the facility of not only pooling their thrift /savings and access to credit from the banking system but also created a platform through which they could launch a number of livelihood initiatives and also facilitate the empowerment process.

While the first decade of the program was meant to demonstrate the potential of SHGs to organize themselves and be instrumental in managing their own savings and extending emergent micro-credit needs, the second decade laid emphasis on establishing the replicability of the model across the regions, with focus on resource-poor regions of the country. This decade also witnessed greater confidence among the financing banks to “own” up the program as a potential business model thereby extending its outreach to the current level. The development planners including the Government of India and the State Governments also recognized the real potential of the SHG movement in the development of the poor and it was made an essential ingredient of all poverty alleviation programs of the Government.

Even the private sector started realizing the untapped potential of SHGs for deep penetration to the emerging rural markets. The turbulence witnessed in the microFinance sector in the recent past due to the mushrooming growth of microFinance Institutions (MFI’s) and their questionable ways in which they went ahead in extending their outreach and credit intensification, could not make any significant dent in the popularity of the SHG-Bank Linkage Programme.

The small beginning of linking only 500 SHGs to banks in 1992, had grown to over 0.5 million SHGs by March 2002 and further to 8 million SHGs by March 2012. From almost 100% of the SHGs linked to Banks at the pilot stage from southern states, the share of southern States in the total number of SHGs linked shrank to 46% by March 2012, while the share of eastern States (especially, West Bengal, Odissa, Bihar) shot up to over 20%.

The third decade of the program promises to be one of maturing the linkage program with livelihoods support, lot more innovations in the product range offered through SHGs and path-breaking reforms in leveraging technology to improve efficiency while extending its outreach to more geographical regions, especially the most resource-poor regions of the country. It is widely believed that the SHGs of the poor will be the vehicles leading the march of India’s emergence as a super economic power in the next decade. A number of countries, especially the developing countries and international agencies are turning to India to learn from its experiments with microFinance and to explore possibilities of replication of the model in other parts of the globe.

Sushma Singh

Sushma Singh

Sushma is an expert in online money-making strategies with extensive experience in business. She has spent a lot of time researching and writing about the ever-changing world of money-making games and websites, making her an expert at finding ways to make money online.

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