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DRAFT PLAN FOR MF+ BUSINESS ACTIVITY

GROUP MEMBERS:
ANWARUL AZIM, BENZIR AHMED, THIHA SOE, SINKESH KUMAR, SUROJIT SIKDAR AND SIVA KUMAR DEVI

INTRODUCTION: Microfinance Private Limited is a NBFC-MFI going to provide credit need and credit plus services to rural poor. The mission statement of our institution is to provide supporting hands and also additional livelihoods to the rural poor for income generating activities and creating market driven & equitable solutions for segments not optimally served. Our vision is to reduce economic and social poverty by creating employment, through providing cost effective, sustainable financial and other development services. We will begin our operations in four districts of Andhra Pradesh viz..,. Ananthapuram, Kadapa, Chittoor and Kurnool. In future gradually we try to spread our business to other districts of Andhra Pradesh also. We will offer our product and services to both women as well as men. Our products include different types of loan for income generating activity at low rate of interest as compare with main existing source in the above mentioned area. As these two districts are drought prone frequently, the water sources in these two districts is meager, so we are planning to provide water credit for each and every rural poor household those who are not having the separate household connection tap. This is a type of MF+ activity. We are also thinking to provide marketing facilities of the coccons that are produced in sericulture, especially in Ananthapuram district. Our strategy is to provide microfinance as per need and side by side giving extra care like providing MF+ services to the rural poor so that they can repay the loan amount timely. We, the group of six came together to start a venture to help rural poor. We are young professionals having a background and professional in Rural Development Management degree with about three years of work experience in rural area working with different types of Microfinance institutions which would really helpful for us. We are confident enough that our business idea is a sound one and would be of use to our existing client base. We are contributing our own capital of 2.58 crores and the rest will be raised from bank and other financing agency. Macroeconomic environment of MFIs in India: India is perhaps emerging as the largest emerging market for microfinance. Over the past decade, the microfinance sector has been growing in India at fairly steady pace. But, now it has become a well known field and now reaching about 86 million poor of India. Presently more than 850 MFIs is running throughout in India. Though no microfinance institution in India has

yet reached anywhere near the scale of the well known Bangladeshi MFIs, but, the sector In India is characterized by a wide diversity of methodologies and legal forms. Microfinance could be defined as provision of thrift, credit and other financial services and products of very small amounts to the poor in rural, semi urban or urban areas, for enabling them to raise their income levels and improve living standards (NABARD 99). We can say microfinance is a tool to attack poverty the world over. There is a huge unmet demand for micro-finance in India. The fundamental reason behind the Indian microfinance industry s impressive growth is that it is fulfilling a critical need of its target audience, the low-income population, which has thus far remained unaddressed by the traditional financial services sector. Future of Microfinance in India: The microfinance sector in India is on tremendous growth path. Microfinance lending is called as a growth engine for the Indian Economy. The services of microfinance are growing over 40% annually. The MFI sector has, over the past two years, recorded strong business growth and increasing geographic diversity. This has been enabled principally by grater investor interest in the sector and the consequent strengthening of MFI s balance sheets. Microfinance expansion over this decade can be expected to be an extension of what has been achieved so far while overcoming the hurdles that have been posing difficulty in effective microfinance operation and its expansion. According to many experts, the microfinance market in India is in its growth phase and would remain so far the next 10-15 years. Vision: The institution is aiming to build a microfinance institution which will empower specially the poor and make them self reliant in income generating activities through MF and MF+ activities. Mission:  To give a supporting hands to meet the regular of the rural poor people  To provide additional livelihoods for the rural poor through empowering hidden human capital. Objectives:     Giving of consultancy of enterprise development in the entire Rayalaseema region Integrated training programme to specialize in the income generation activities Financing the rural enterprises Taking up of marketing responsibilities of the enterprise output

 Financing to get access amenities in the entire Rayalaseema region  Life time health coverage under one umbrella  Active contribution towards NRLM Strategies: PHASE I:  In phase we concentrate on the enterprise development for best utilization of human resources through utilizing rural produce.  Training programme will ensure quality and cost effectiveness of the product.  All the financing will be done in the phased manner  Revenue will be generated from both the ways i.e. provider as well as client  The ownership will be enjoyed by clients themselves, it implies that the entire profit will be shared among the entrepreneurs only  Provider will be treated as lenders to the enterprise, which will enjoy only fixed rate of return and selling and distribution commission and they will have no claim / right on the profit earned by the enterprise Contingency plan: collaboration with the conglomerates who can be the permanent client of the goods produced by the enterprises. They also can be the equity holder of our firm. It will automatically diversify our financing and marketing risks. There will be no contingency for quality. For the failure of the enterprises, RSME insurance will be provided with the collaboration of MSME. PHASE II:  Short term loan will be provided for generating good quality of life through fulfillment of basic needs  The quality life will assure the repayment of loan  Income generation can be done through technical intervention Contingency plan: the penalty will be very much higher on the failure of the repayment though interest rate will be cheaper. To minimize NPL for that specific financing we will have the recovery section. This section also will work to mobilize the society. PHASE III:  Medi claim policy will insure rural health which can help to succeed MDG with the increases of income  Minimum premium rate will not affect other needs of the households or an individual

 By covering all the diseases under this scheme will help to decrease the life contingency of the poor people. Contingency plan: the money collected in terms of premium will not be refundable at any point of time. All the benefits will be on non cash basis. The collected premium money will be reinvested in the microcredit system. The liquidity will be maintained in a marginal rate to meet the emergency situation.

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