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Savings-led Micro-finance to Bank the Unbankables

Author

Listed:
  • A.N. Sarkar

    (A.N. Sarkar is Senior Professor, Institute of Marketing & Management, B–11, Qutab Institutional Area New Delhi–110 016. E-mail: immnd@india.vsnl.net.in; info@immindia.com)

  • Jagjit Singh

    (Jagjit Singh is Executive President, Institute of Marketing & Management, B–11, Qutab Institutional Area New Delhi–110 016. E-mail: immnd@india.vsnl.net.in; info@immindia.com)

Abstract

Based on the ‘Grameen Bank Model’ evolved and developed in Bangladesh, several countries in Asia, including India, and elsewhere in the world have emulated, replicated and modified the original model of micro-finance to suit local conditions and enhance mass acceptability. In India, among various models tried and tested, the one evolved and successfully demonstrated by the National Bank for Agriculture and Rural Development (NABARD) and some leading non-governmental organizations (NGOs), is based on a ‘linkage programme’ linking self-help groups (SHGs) with banks and other financial institutions through the inter-mediation of NGOs. This article attempts to highlight the genesis and evolution of the micro-finance system, importance of self-help groups as central to micro-finance core activities, the distinctive role of banks (viz. commercial, private and cooperative) in credit mobilization and delivery systems and the role of NGOs intermediaries and facilitators, etc. Global experiences concerning the unique positioning perspective of micro-finance in banking the unbankables—both in the developing and underdeveloped economies in the world, with a focus on Asia, have also been highlighted to provide an insight into the potential of micro-finance in alleviating rural poverty at large and in improving employment opportunities to the non-bankables on a sustainable basis.

Suggested Citation

  • A.N. Sarkar & Jagjit Singh, 2006. "Savings-led Micro-finance to Bank the Unbankables," Global Business Review, International Management Institute, vol. 7(2), pages 271-295, August.
    • Handle: RePEc:sae:globus:v:7:y:2006:i:2:p:271-295
    DOI: 10.1177/097215090600700206
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    References listed on IDEAS

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    1. Sriram M S, 2004. "Microfinance and the State: Exploring areas and structures of collaboration," IIMA Working Papers WP2004-01-03, Indian Institute of Management Ahmedabad, Research and Publication Department.
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    Cited by:

    1. Sadia Farooq, 2018. "Performance Evaluation of Microfinance Providers Using Data Envelopment Analysis: The Profitability Perspective," Journal of Management Sciences, Geist Science, Iqra University, Faculty of Business Administration, vol. 5(1), pages 111-123, March.

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