In this article we will learn about the microfinance and top 10 microfinance companies of India.
What is Microfinance?
Microfinance are short term loans that people take from microfinance institutes to fulfill their desire. As per the study, people living in the urban and semi rural area, take the microfinance loan for the following reasons - full Health Care treatment, to implement irrigation setup, transportation facilities in there fields, to meet the need of urgent family disaster like crop failure, to purchase sewing machines, irrigation system etc
Indian government has regulate the microfinance industry in the year 1950,so the maximum people from the rular area can avail this facility and improve their business. Presently more than 82 small and large companies are working in the sector and providing short term loans to the people of rural India. These companies provide loans to the people on low interest rates as compared to private lenders and banks.
Do You Know - How MFI Institutions Changing the Lives of People who are living in villages and has less IncomeMicrofinance companies has become a catalyst to change the life people who are backward classes or you can say financially weak people. These people could not able to use the mainstream banking services over the of time because they don't have interest or knowledge about the various processes associated with the bank. Also banks are not interested in catering this segment because that is associate associate with them while providing the loan is quite high and because of that reason these people could not able to improve their living standards over the. of time.
In the year 1950, indian government has legalised the microfinance sector and then situation started to change. Presently various government and private financial organisations providing short term loans to the people living in villages and has less income. This step has been empowering people to start their small businesses and hence reduce the unemployment rate.
To improve the employment opportunities in the villages, several financial institute has laid down a condition to borrows, that they have to employee other village people when their business become successful. The small step taken by the government and these microfinance companies, has been helping India to reduce employment rate.
After all these changes the scenario has changed, now the less educated people can set up their small businesses with the help of microfinance companies. Also the interest rates very normal so they can repay the amount is easily.
The loan process all microfinance companies to import loan to poor peoples is very complex. But these companies has been doing this task perfectly and efficiently.
The process for the loan approval include following stepsThe administrative officer of the microfinance company with that the loan applicant place and understand there financial challenges. The administrative officer interview with loan applicant to understand the purpose of loan and he also analyse the skills of applicant and understand the need of the loan. The entire process is quite hectic and take a long time, energy and manpower. If the administrative officer feel that the applicant don't have general skills, so they arrange seminar and training session to impart skills to the applicant, so they can successfully Run their business.
Some of the important factors considered by microfinance companies before giving out loans are Loan period- loan period is the time period for which applicant has applied for the loan. Microfinance companies give loan short term and also long term. For short term loans they provide the loan from few months to the time period of 1 year. The repayment of the loan can be done weekly, monthly or quarterly
Risk factor is the important factor analysed by administrative officer. Administrative officer when visit the applicant please, he sence about the repayment capability of the applicant. The repayment ability of the applicant is base on several criteria.
Education qualification : For the success of the business education plays a vital rule and administrator officer also check the loan background of loan applicant.
Specialised skill- The loan applicant must have a complete knowledge of the business that they want to start and prior experience in this field is also required.
Below mentioned are the top 10 microfinance institutions (MFIs) of India.
1. State Bank of India - State Bank of India is the largest bank of India has been providing small term loans to the people living in rural area at the very low interest rate and hence we are placed SBI at the first position in the list of top 10 microfinance companies of India. State Bank of India offers small loans to the people for the construction of their homes, to setup the small business, to buy the Agricultural machines, to setup irrigation facility etc. State Bank of India has branches at remote villages, to avail the loan, customer has to visit nearest branch of State Bank of India and complete the document formality.
Bharat Financial Inclusion Limited
Formerly known as SKS Microfinance Limited, Bharat Finance is at number 2 positions in India’s Micro finance industry.
The company was founded in the year 1997 by Vikram Akula. They offer small loans that begin as low as Rs.2000 to Rs. 12000 to poor women, for small financial needs such as buying cow, cattle; setting up vegetable shops, pan shops etc. Till now they have 7.3 million borrowers portfolio and have benefitted 45.9 lakh women in 1 lakh villages.
Headquarters: Hyderabad, India | Founded: 1998 | Staff size: 22,733 | Number of borrowers (2011): more than 7.3 million | Gross loan portfolio: $925 million
Spandana Sphoorty Financial Ltd
Established in the year 1998 at Hyderabad, Spandana is a leading Micro Finance Company in South India. Their main products are Income Generation Loan, Micro Enterprise Loan, Gold Loans, Shree Loans (Small Ticket Personal Loans), and Group loans. All their products are designed for women of low income household to live a sustainable life. Today, they have 540 branches in 13 states in the country.
Headquarters: Hyderabad, India | Founded: 1998 Staff size: 8,328| Number of borrowers (2011): nearly 4.2 million | Gross loan portfolio: $778 million
Share Microfin Limited
Established in the year 1989, Share is the first Micro Finance Company in India, which has obtained a Non Banking Financial Company (Non Deposit) license. It is spread in 914 districts in 19 states and benefitted million of people to live a happy life. They currently have 4352 employees working in their 666 branches.
Headquarter: Hyderabad, Andhra Pradesh | Legal Status: Public Ltd. Company (NBFC) | Branches : 666
Asmitha Microfin Ltd
Asmitha was established in the year 2002, with a sole aim to provide small ticket loans to rural poor women. Their small loans helped them to start small business, which in turn uplifted their lives and their family lives. Currently, Asmitha has branches in 13 states in the country and are helping women who are living below poverty line and do not have access to traditional financial institutes.
Headquarter: Hyderabad, Andhra Pradesh | Legal Status : Public Ltd. Company (NBFC) | Number of Branches : 363
Shri Kshetra Dharmasthala Rural Development Project
- SKDRDP is a charitable trust that promotes women empowerment in villages. This trust is promoted by Dr. D. Veerendra Heggade and is registered with Government of Karnataka. This trust offers micro finance solutions to housewives and women of rural area. Their various charitable programmers and micro finance activities are going on in 25,000+ villages in South India.
Established : 1991 | Services in: 25000 villages
Bhartiya Samruddhi Finance Limited (BSFL)
Bhartiya Samruddhi Finance Limited is a well known Micro Finance company that was started in 1996 and has head office in Hyderabad, Presently company has customer base of 3.5 millions, in which 90% customers are poor and belong to rural area. BASIX provide services in 17 states, 223 districts and over 39,251 villages.
Headquarter Hyderabad, Andhra Pradesh | Legal Status : Public Ltd. Company| Number of Branches : 87
Bandhan is a famous micro finance company started in 2001 by Mr. Chandra Shekhar Ghosh. In 13 years company is providing services in 22 States and Union Territories. It is a Non Banking Financial Company that provides small loans to the needed customers.
Headquarter: Kolkata, West Bengal| Number of Branches : 385
Cashpor Micro Credit (CMC)
Established in the year 1996, Cashpor Micro Credit or CMC is a leading Micro Finance Company in Up and Bihar. They offer small loans to women in BPL section in Eastern UP and Bihar. Along with offering Loans, they provide old age pension to BPL women with their “Micro Pension Program”. Headquartered at Varanasi, they have 247 branches, mainly in UP and Bihar.
Headquarter: Varanasi, Uttar Pradesh | Number of Branches : 247
Grama Vidiyal Micro Finance Pvt Ltd (GVMFL)
Established in the year 1993, GVMFL is 100% subsidiary Micro Finance Company of IDFC Bank Limited. They have extremely popular in the states of Kerala, Tamil Nadu, Andhra Pradesh, Karnataka and are growing in Gujarat and Madhya Pradesh. Headquartered at Tiruchirappalli in Tamil Nadu, they have 322 branches, with 1.257 Million members in South and West India. Till 2016 they have disbursed 13.36 Million Loans.
Headquarter : Tiruchirappalli, Tamil Nadu | Number of Branches : 126
Grameen Financial Services Pvt Ltd (GFSPL)
Grameen Financial Services Pvt Ltd is a non banking financial institute approved by Government of India. Company started with aim to fostering rural women, so they start small scale business and earn money. It was started in 1999 as an NGO but in 2007 organization transformed into Non-Banking Financial Company that provides Micro finance services.
Headquarter:Bangalore, Karnataka | Number of Branches : 62
Utkarsh Micro Finance Pvt Ltd - It is one of the esteemed and popular micro finance firms having name all around the country. Registered as per Reserve Bank of India, it is a well known non banking finance company. The corporate office and registered branch of the company is based in Varanasi, India. The company has began to cater non financial as well as financial services and solutions in its specific area of operations to the population and general mass who have the skills and expertise but are actually in need of the capital. Formerly, the company has began with offering and providing credit under insurance and joint liability structure but eventually over the course of time frame, it introduced Micro Pension and Micro Enterprises loan. Adding to this, it has collaborated with leading and reckoned Utkarsh Welfare Foundation that is a section 25 firm and is focused entirely upon market linkages, vocational training, health initiatives, green energy solar initiatives, and financial awareness training. Moreover, it is passionate and highly dedicated to cater more number of products and solutions to lend transformation in the livelihoods of the under nourished and under privileged kids. The vision of the company is to a trustable and reliable finance service provider by year 2021 serving more than 10 million customers from all around. Along with this, the mission of the firm is to serve cost efficient and accessible banking solutions, reckoned to be technology enabled, process centric, and most important people oriented resulting in scalable, robust and sustainable solutions facilitating in socioeconomic change.
Ujjivan Financial Services Pvt Ltd - The company began its operations as a leading and well known NBFC company in the year 2005 with an aim of rendering a fully fledged range of financial services and assistance to the economically underprivileged and poor section of the society who are not properly been served by premier financial institutions. At present, the company's operations are known to be spread all around about 24 states as well as union territories along with 209 districts of the country, making them the biggest and well acknowledged MFI in terms of geographical reach. Serving more than 2.77 million promising and reputed clients, it has been housed with about 7786 employee strength and 469 branches making them one of the rapidly growing and emerging micro finance institutions. The business of the company is primitively been engaged on the joint liability group lending model for serving small ticket size loans to collateral free loan services to poor and economically weak section of the country. Adding to this, the company has been providing individual loans to popular Micro and Small based enterprises. By following the integrated approach blended with technological infrastructure, back-end support functions and high customer touch point microfinance kind, it helps to optimize overall efficiencies as well as increase business volumes. From the last five consecutive years, the company has ranked constantly among the top notch and best 25 firms working and operating across the country and as per the stats of year 2015, it has been ranked first as a microfinance company by the renowned Great Places to Work Institute.
Swadhaar FinServe Pvt Ltd - Headquartered in Mumbai, India, the leading microfinance company comprises Swadhaar FinAccess, Swadhaar FinServe Private Limited and Swadhaar Information and Management Services with a common aim of lending and providing financial services and solutions to the underserved and unserved sections of the country. The independent and operating entities as well as distributors of the financial service provider are SFPL and SIMS that operate as independent business correspondents. It started its operations in year 2005 by providing micro credit in Mumbai city. Started by serving the low income households and economically poor section of the India, it began in year 2008 as a premier and prominent non banking finance company taking over the micro credit and finance portfolio of SFA. In year 2015, it also made an application to RBI in order to operate as an independent business correspondent by enabling the facility of a complete range of financial products and services to its promising segments.
Annapurna Microfinance Private Limited – AMPL is another pioneer Micro Finance Company that offers Financial and Non-Financial Services to rural and urban poor section. They offer small ticket loans for Agriculture Crop, Tractor, Water Pump, Dairy farming, Poultry, Spice Making Units, Small Factory Setups, Small Shops, and Handicraft Production such as Saree, Bamboo products production. Till 2016, they have 176 branches in the country.
Top 25 Microfinance Companies in India are as follows.
1. Annapurna Microfinance Pvt Ltd
2. Arohan Financial Services Pvt Ltd
3. Asirvad Microfinance Pvt Ltd
4. Bandhan Financial Services Pvt Ltd
5. BSS Microfinance Pvt Ltd
6. Cashpor Micro Credit
7. Disha Microfin Pvt Ltd
8. Equitas Microfinance Pvt Ltd
9. ESAF Microfinance and Investments Pvt Ltd
10. Fusion Microfinance Pvt Ltd
11. Grama Vidiyal Micro Finance Ltd
12. Grameen Financial Services Pvt Ltd
13. Janalakshmi Financial Services Pvt Ltd
14. Madura Micro Finance Ltd
15. RGVN (North East) Microfinance Limited
16. Satin Creditcare Network Ltd
17. Shree Kshetra Dharmasthala Rural Development Project
18. SKS Microfinance Ltd
19. S.M.I.L.E Microfinance Ltd
20. Sonata Finance Pvt Ltd
21. Suryoday Micro Finance Pvt Ltd
22. SV Creditline Pvt Ltd
23. Swadhaar FinServe Pvt Ltd
24. Ujjivan Financial Services Pvt Ltd
25. Utkarsh Micro Finance Pvt Ltd
Emerging New MFI’s in India
1. Adhikar Microfinance Pvt Ltd
2. ASA International India Pvt Ltd
3. Belstar Investment & Finance Pvt Ltd
4. Chaitanya India Fin Credit Pvt Ltd
5. Future Financial Services Ltd
6. Growing Opportunity Finance (India) Pvt Ltd
7. Humana People to People India
8. IDF Financial Services Pvt Ltd
9. Indian Cooperative Network for Women Ltd
10. M Power Micro Finance Pvt Ltd
11. Mahasemam Trust
12. Margdarshak Financial Services Ltd
13. Pahal Financial Services Pvt Ltd
14. Rashtriya Seva Samithi
15. Sahara Utsarga Welfare Society
16. Sahayog Microfinance Ltd
17. Saija Finance Pvt Ltd
18. Samhita Community Development Services
19. Sanghamitra Rural Financial Services
20. Sarala Women Welfare Society
21. Shikhar Microfinance Pvt Ltd
22. Uttrayan Financial Services Pvt Ltd
23. Vedika Credit Capital Ltd
24. Village Financial Services Pvt Ltd
25. YVU Financial Services Pvt Ltd
Last Updated on 10 April 2020