Journal of Business Management & Social Sciences Research (JBM&SSR)

ISSN No: 2319-5614

Volume 1, No.1, October 2012
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13

Status of Satisfaction Level for Saving & Credit Activities

amongst Clients of Sewa Bank
Dr. Sneha S. Shukla, Associate Prof. N. R. Institute of Business Management

Microfinance in India is approaching a historic 'tipping point' that could lead to a massive poverty reduction in the
next five to ten years."
- Grameen Foundation US
"Microfinance is not a charity. It is a way to extend the same rights and services to low-income households that are
available to everyone else. It is recognition that poor people are the solution, not the problem."
- Kofi Annan, Secretary General, United Nations

INTRODUCTION
Microfinance
is
small-scale
financial
servicesprimarily credit and savings
provided to people who farm, fish or herd and
adds that it refers to all types of financial
services provided to low-income households and
enterprises. Microfinance in India started in
1974 in Gujarat as Shri Mahila SEWA (Self
Employed Womens Association) Sahakari
Bank. Registered as an Urban Cooperative
Bank, they provided banking services to poor
women employed in the unorganized sector.
Microfinance later evolved in the early 1980s
around the concept of informal Self Help Groups
(SHGs) that provided deprived poor people with
financial services. From modest origins, the
microfinance sector has grown at a steady pace.
Now in a strong endorsement of microfinance,
the National Bank for Agriculture and Rural
Development (NABARD) and Small Industries
Development Bank of India (SIDBI) has
committed
themselves
to
developing
microfinance.

LITERATURE REVIEW
Microfinance in India: A State of the Sector
Report, 2006, a report prepared by Prabhu
Ghate and published by Microfinance India and
jointly sponsored by Care, Ford Foundation and
Swiss Agency for Development & Cooperation,
says that microfinance in India has emerged as
a powerful tool for financial inclusion, reaching
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out to a fifth of all poor households who have

yet to be reached by the formal financial sector.
The larger of the two main models, the SelfHelp Group Bank Linkage Programme (SBLP)
covered about 143 million poor households in
March 2006 and provided indirect access to the
banking system to another 14 million. The other,
microfinance institution (MFI) model, served 7.3
million households, of which 3.2 million were
poor. Apart from the scorching pace of growth,
the report highlights several trends in Indian
microfinance. First and, perhaps, most
important, the rapid spread of microfinance has
provided competition to rural money lenders.
ICICI Bank has catalyzed the creation of over
100 microfinance partners and has been able to
extend micro-loans from 20000 clients in 2003
to 3 million clients by March, 2006.
Microfinance will emerge as an important
development tool that will enable the financial
inclusion of rural and urban poor.
A study by Robin Burguess & Rohini Pande;
LSE, Yale University (Aug 2003) in Do Rural
Banks Matter? Evidence From The Indian Social
Banking Experiment reveals that lack of access
to finance is often cited as a key reason why
poor people remain poor. This paper uses data
on the Indian rural branch expansion program to
provide empirical evidence on this issue.
Between 1977 and 1990, the Indian Central
Bank mandated that a commercial bank can
open a branch in a location with one or more
bank branches only if it opens four in locations
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Journal of Business Management & Social Sciences Research (JBM&SSR)

ISSN No: 2319-5614
Volume 1, No.1, October 2012
_________________________________________________________________________________
with no bank branches. We show that between
1977 and 1990 this rule caused banks to open
relatively more rural branches in Indian states
with lower initial financial development. The
reverse is true outside this period. We exploit
this fact to identify the impact of opening a rural
bank on poverty and output. Our estimates
suggest that the Indian rural branch expansion
program significantly lowered rural poverty, and
increased non-agricultural output.
The researchers from the Abdul Latif Jameel
Poverty Action Lab (J-PAL) at MIT and the
Indian Centre for Micro Finance worked with
Spandana to randomize the roll-out of its
microcredit operations in Hyderabad, Indias
fifth-largest city. Spandana chose 104 areas of
the city to expand into eventually, rejecting
some districts as having too many construction
workers, who come and go and might take
Spandanas money with them. In 2006-07
Spandana started lending in a randomly chosen
52 of the 104. Researchers followed up by
surveying more than 6,000 households between
August 2007 and April 2008, restricting their
visits to families that seemed more likely to
borrow: ones that had lived in the area at least
three years and had at least one working-age
woman. The surveyors made sure not to visit an
area until Spandana had been there at least a
year. They surveyed in treatment areas (ones
where Spandana worked) and control ones
(where it did not yet).

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MICROFINANCE CYCLE:

RESEARCH METHODOLOGY
Objectives of the study:
To know the savings scheme provided by
SEWA bank and their effectiveness in
creating savings of clients.
To know the objective for which loan is
taken by clients.
To identify change in standard of living of
clients after taking loan.
To determine the independence and self
sufficiency of women after SEWA bank
initiatives.

Approach to the study:

The approach to the study was quantitative. The
survey of the respondents was descriptive in
nature and was aimed at measuring the
satisfaction of the clients procuring loan at
SEWA Bank. It was structured.

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Journal of Business Management & Social Sciences Research (JBM&SSR)

ISSN No: 2319-5614
Volume 1, No.1, October 2012
_________________________________________________________________________________

Sources of data:
The data sources used for the project were both
primary and secondary. The secondary data
relating to the past surveys and research work
published in magazines and journals. The
primary data was collected from respondents of
Ahmedabad city only.

Methods of the data collection:

The information from the end users was
obtained using the survey method. A structured
questionnaire was administered. The questions
were closed ended.

Sampling Elements:
The sample elements for the Respondent survey
were respondents who have procured loan from
Sewa Bank.

Sampling Design:
Simple Random Sampling was used to collect
the data.

Sample Size:
Sample of 100 Respondents from Ahmedabad
city were taken for the study.

FINDINGS OF THE STUDY

37% of women are illiterate, 31% women
have just attended just primary education and
24% women have attended secondary
education and higher secondary just attended
by just 8% of women. So literacy level is
very low amongst those women. (Details in
Table 10)
The study provides that the household
income of the women is about an average of
Rs 8000 to 10000.
There are only 38% Accounts of Jivan Asha,
14% Chinta Nivaran Yojana, 9% have
Kishori Gold Yojana and no account for
Mangal Prasang Yojana, Ghar Fund Yojana
and Regular Recurring Scheme. This shows
that still women are not so active in saving
money for the future. (Details in Table 2)
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8-8.5% interest rate is given on all saving

schemes provided by Sewa bank (except
Jeevan Asha which is 3%).
Sewa bank is also providing the pension
Schemes (UTI and NPS) which is
effectively adopted by the clients.
Only 51 women have savings more than Rs.
500. Among them, only 17 women have
savings of more than Rs. 1000, which shows
that still savings are very less.( Details in
Table 3)
SEWA Bank provides personal loan on an
average of Rs 30000. The maximum amount
of working capital loan given is up to Rs
100000.
The interest rate charged by the SEWA
Bank is 18-18.5% for all the loans.
All women pay their loan installment
monthly basis.(Details in Table 6)
All women have said that they repaid the
installment regularly on monthly basis
which shows that poor women are
trustworthy and responsive.(Details in Table
7)
There are 98 women have taken loan for
business purpose (working capital loan).
Loan for other purpose like ornament loan,
housing loan, fixed deposit over draft, house
repair are very less. Or almost nil. The main
reason behind mortgage and security
required for the loan is lacking for those
women. (Details in Table 4)
After the initiatives of SEWA Bank, the
income has increased amongst these women.
26 women said that their income increased
by Rs. 1000, 36 women said that their
income increased by Rs. 2000, 24 women
said that their income increased by Rs. 3000,
and 12 women said that their income
increased by Rs. 4000. (Details in Table 8)
After the initiatives of the SEWA Bank,
women are becoming more independent.
The standard of living of these women is
improved and they are becoming self
sufficient. (Details in Table 9)
94% women are satisfied with the
microfinance facilities provided by the
SEWA bank
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Journal of Business Management & Social Sciences Research (JBM&SSR)

ISSN No: 2319-5614
Volume 1, No.1, October 2012
_________________________________________________________________________________
It is noticed that all the respondents agreed
that micro finance brought courage and self
confidence and improved their skill and self
worthiness.

CONCLUSION

For microfinance to achieve its potential as a

global poverty alleviation tool, the microfinance
industry must grow to scale. At the end of
March 2011, the number of MFI borrower
accounts was 20% higher than the previous year.
This was considerably lower than the growth of
43% in 2009-10 but indicates the continuing
demand for door-to door financial services
amongst the poor. This graph shows that out of
the total number of micro-credit accounts in
India, MFIs have the second largest number, and
three times more than those of the rural banks.
Only self help groups have facilitated more
loans than MFIs. Thus MFI outreach is high and
could play an important role in trimming down
poverty. To achieve this noble objective,
microfinance institution (MFIs) like SEWA
Bank plays a major role. The role of state
government is also crucial in augmenting farm
investment, micro financing, micro insurance,
facilitating private investment and spreading
institutions. This would help the poor in
realizing inclusive growth of India. It will help
in improving the farm level productivity and
generate employment for youth.

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ANNEXURES
Table: 1 Medium of awareness about SEWA
Bank
Particulars

No of
respondents

Through
existing
members of SEWA bank

78

Through
SEWA
organizers who work in
the field and are came in
personal contact with
self-employed women

10

Through word of mouth

12

Table: 2 Preference for Savings products

provided by SEWA Bank

Saving Schemes

Respondents

Regular Saving Scheme

100

Jivan Asha - (Daily recurring

scheme)

38

Chinta Nivaran Scheme

(worry riddance scheme)

14

Kishori Gold Yojana (Special

occasion scheme)

Mangal Prasang Yojana

(House fund scheme)

Ghar Fund Yojana (House

Fund scheme)

Regular recurring scheme

Table: 3 Savings per month by clients

Monthly Savings

Respondents

Rs. 200

12

Rs. 300

23

Rs.400

14
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Journal of Business Management & Social Sciences Research (JBM&SSR)

ISSN No: 2319-5614
Volume 1, No.1, October 2012
_________________________________________________________________________________
Rs.500

34

Rs. 1000 or more

17

Table: 7 Missed to pay installment

Particulars

Table: 4 Types of loan preferred by clients of

Sewa Bank
Secured Loan
Loans

Respondents

Ornaments loan

17

NSc
Housing loan
Fixed deposit overdraft
Recurring overdraft
Unsecured loan
Working capital loan

88

Repayment of old debt

Respondents

Yes

No

100

Table: 8 The amount of increase in Income

Particulars

Respondents

Rs. 1000

27

Rs. 2000

37

Rs. 3000

24

Rs. 4000 or more

12

Table: 9 Standard of living improved or not

Buying assets
Housing repairs

Particulars

Respondents

Joint liability group loan

10

Yes

100

No

Table -5 Loan amount given to clients

Loan amount

Respondents

Table: 10 Qualifications of Women

Rs.10000

10

Qualification

Rs.30000

57

Not studied

37

Rs.40000

Primary education

31

Rs.50000

16

Secondary education

24

Rs.100000

Higher
education

Secondary

Respondents

Table: 6 Duration of time preferred for

installment payment
Time duration

Respondents

Weekly

Monthly

100

Quarterly

Yearly

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Journal of Business Management & Social Sciences Research (JBM&SSR)

ISSN No: 2319-5614
Volume 1, No.1, October 2012
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REFERENCES
[1] Ayayi Ayi Gavriel and Sene Maty,
What Drives Micro finance Institution's
Financial Sustainability, The Journal of
Developing Areas, 44(1), 303-324
(2011)
[2] Sanjay Sinha and Shweta Banerjee,
Indias Micro-Finance Industry: An
Anatomy of Risk, CGAP Microfinance
Blog, May 2012
[3] http://www.gdrc.org/icm/micro/guy_sus
t-micro.pdf
[4] http://dupedia.com/forms&projects/Micr
ofinance%20Industry%20in%20India.pd
f
[5] http://www.un.org/esa/desa/papers/2009
/wp89_2009.pdf
[6] http://www.nabard.org/pdf/report_finan
cial/chap_viii.pdf
[7] http://www.scribd.com/doc/15792568/F
ull-and-Final-Micro-Finance
[8] http://jms.nonolympictimes.org/Articles/
Article1.pdf
[9] http://microfinancemonipran.blogspot.in/2010/06/portersfive-factor-analysis-to-micro.html
[10]
http://www.sewabank.com/
[11]
http://www.spandanaindia.com/
PDFs/Top%2050%20Microfinance%20Insti
tutions%20in%20India.pdf

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