Midland Microfin Limited

First Microfinance Institution
of the Region

12:24 AM Monday, 23 October 2017

1800 137 0600

Toll Free
* 9:30 AM to 5:30 PM

Midland Microfin Limited

First Microfinance Institution of the Region

1800 137 0600 Toll Free * 9:30 AM to 5:30 PM

Microfinance

  • Overview


    “Microfinance is an economic development tool whose objective is to assist the poor to work their way out of poverty. It covers a range of services, which include, in addition to the provision of credit, many other services such as savings, insurance, money transfers, counseling etc”. This definition of microfinance is given by Malegam Committee – Sub-Committee of the Central Board of Directors, Reserve Bank of India.

    Microfinance acts as an umbrella to the poverty-stricken and makes provision for credit availability to this sector through poverty focused Microfinance Institutions-MFIs. Microfinance promotes women entrepreneurship by providing loans to poor, to help them engage in productive activities and grow their tiny establishments. It gives people the means to fight against poverty and aims at poverty alleviation.

    The Indian Microfinance Sector has witnessed a phenomenal growth over the last fifteen years. The quantum of credit made available to the poor and financially excluded members have gone past Rs 33,500 crore and number of clients benefitted crossed 33 million as on march 2014.NBFC-MFIs contribute 82% of both clients outreach and Outstanding Portfolio as per ‘Bharat Microfinance Report 2014’. The industry, in a way, is now well positioned for a makeover. The MFIs and their lenders have overcome the 2010 Andhra Pradesh crisis. The resilience of the sector could be gauged from the fact that it has survived many setbacks and renewed its growth story. Last three years witnessed the emergence of ‘client’ as the protagonist in all the major events concerning microfinance. Today, the industry is in better shape than ever before. MFIN data shows that over 27.9 million clients were provided micro credit during the quarter, a 23 per cent increase over the year-ago period. Funding to MFIs also grew 172 per cent. It is expected that by the end of the current financial year, the loan portfolio of MFIs would touch an all-time high.

    The RBI’s regulatory framework for NBFC-MFIs, based on the Malegam panel’s report (2011), has also ensured stability of business. The renewed focus on financial inclusion, last mile connectivity and widespread use of credit bureau reports are the strengths of micro-lenders.

    Multiple instruments; code of conduct, client protection principles are being used to reinforce the idea of responsible microfinance. Thanks to the regulatory guidelines issued by the Reserve Bank of India, the sector has begun to operate in an orderly manner.

    Microfinance transparency, a global initiative to promote transparency in microfinance operations, has reported that Indian MFIs are now more focused on the poor, carry lower interest rate and provide credit plus services.

  • JLG-Lending Model


    Midland Microfin broadly follows ‘Grameen Model’ having Joint Liability Groups (JLGs) of the borrowers. Initially we started our operation in Punjab, which has been by & large an untapped market for Microfinance but had a lot of potential. We have closely studied five to six MFIs and have introduced a new hybrid model of lending and monitoring. We area Techno Savvy MFI having fully computerized environment right from day one. This enables us to work more efficiently with better MIS and full proof monitoring.

    A JLG is a Joint Liability Group, which is a group of five women and is formed by the members with assistance, guidance and supervision of the Centre Officer (Field Officer). The members support each other emotionally and financially by guaranteeing the repayment of each of their loans. The peer pressure and close social ties ensure the timely repayment of loans as well credit discipline.

    The members jointly stand liable for the repayment of the loan disbursed to each of them. A guarantee note for the same is taken when the group is formed; as these micro loans are collateral free, hence peer pressure is the only way to ensure timely recovery. Like most the MFIs, Midland Microfin extends loans only to women as it is established that women are prudent borrowers, as they are better end users of money and endeavour to uplift their families.

    JLG is a proven concept of risk free lending in India and other parts of the globe. In India many MFIs have been successfully implementing this model of lending with more concentration on southern and eastern parts of the country. We are the first Punjab based MFI to introduce this concept with latest Technology. Our Branch Managers and Centre Officers outreach the communities and create awareness about the benefits of this concept. They make new members, form groups and meet them over a period of time.

  • Financial Inclusion


    Malegam Committee also recognizes the contribution of MFIs towards financial inclusion. “Microfinance is an important plank in the agenda for financial inclusion.” – Malegam Committee report.

    India is an upcoming economic powerhouse, but many of our problems still exist. Healthcare is a critical issue, which remains out of reach of the majority of the world’s population. The Reserve Bank of India and Govt.of India want that more and more people should be brought into the purview of mainstream banking. Commercial Banks have made efforts to open bank accounts of each and every individual in their area of operation. On august 28, 2013 Govt of India announced Pradhan Mantri Jan-Dhan Yojnaunder which more than 125 million new bank accounts were opened. The object is to provide atleast one basic banking account in each and every household. However, the banks consider giving loans to the poor to be too costly and risky. Therefore MFIs play a vital role in financial inclusion of those who are outside the reach of commercial banks. World over, microfinance is looked upon as source of credit-based poverty alleviation and financial inclusion. This financial inclusion drive by the government is making way for the MFIs to lend through banking channel and offer cashless disbursement which ensures risk free lending.

  • Resources


    To know more about Microfinance :

    Microfinance Gateway www.microfinancegateway.com
    Consultative Group to Assist the Poor (CGAP) www.cgap.org
    Grameen Bank www.grameen-info.org
    Microfinance Institutions Network www.mfinindia.org;
    Micro Credit Summit Campaign www.microcreditsummit.org
    Sa Dhan : Association of Community Development Finance Institutions www.sa-dhan.org
    South Asian Microfinance Portal www.microfinancesouthasia.net
    World Bank www.worldbank.org
    Microfinance.com www.microfinance.com
    Mixmarket.org www.mixmarket.org
    Pradhan Mantri (Prime Minister) Jan-Dhan Yojna www.pmjdy.gov.in
    Mfin www.mfinindia.org

Overview


“Microfinance is an economic development tool whose objective is to assist the poor to work their way out of poverty. It covers a range of services, which include, in addition to the provision of credit, many other services such as savings, insurance, money transfers, counseling etc”. This definition of microfinance is given by Malegam Committee – Sub-Committee of the Central Board of Directors, Reserve Bank of India.

Microfinance acts as an umbrella to the poverty-stricken and makes provision for credit availability to this sector through poverty focused Microfinance Institutions-MFIs. Microfinance promotes women entrepreneurship by providing loans to poor, to help them engage in productive activities and grow their tiny establishments. It gives people the means to fight against poverty and aims at poverty alleviation.

The Indian Microfinance Sector has witnessed a phenomenal growth over the last fifteen years. The quantum of credit made available to the poor and financially excluded members have gone past Rs 33,500 crore and number of clients benefitted crossed 33 million as on march 2014.NBFC-MFIs contribute 82% of both clients outreach and Outstanding Portfolio as per ‘Bharat Microfinance Report 2014’. The industry, in a way, is now well positioned for a makeover. The MFIs and their lenders have overcome the 2010 Andhra Pradesh crisis. The resilience of the sector could be gauged from the fact that it has survived many setbacks and renewed its growth story. Last three years witnessed the emergence of ‘client’ as the protagonist in all the major events concerning microfinance. Today, the industry is in better shape than ever before. MFIN data shows that over 27.9 million clients were provided micro credit during the quarter, a 23 per cent increase over the year-ago period. Funding to MFIs also grew 172 per cent. It is expected that by the end of the current financial year, the loan portfolio of MFIs would touch an all-time high.

The RBI’s regulatory framework for NBFC-MFIs, based on the Malegam panel’s report (2011), has also ensured stability of business. The renewed focus on financial inclusion, last mile connectivity and widespread use of credit bureau reports are the strengths of micro-lenders.

Multiple instruments; code of conduct, client protection principles are being used to reinforce the idea of responsible microfinance. Thanks to the regulatory guidelines issued by the Reserve Bank of India, the sector has begun to operate in an orderly manner.

Microfinance transparency, a global initiative to promote transparency in microfinance operations, has reported that Indian MFIs are now more focused on the poor, carry lower interest rate and provide credit plus services.

JLG-Lending Model


Midland Microfin broadly follows ‘Grameen Model’ having Joint Liability Groups (JLGs) of the borrowers. Initially we started our operation in Punjab, which has been by & large an untapped market for Microfinance but had a lot of potential. We have closely studied five to six MFIs and have introduced a new hybrid model of lending and monitoring. We area Techno Savvy MFI having fully computerized environment right from day one. This enables us to work more efficiently with better MIS and full proof monitoring.

A JLG is a Joint Liability Group, which is a group of five women and is formed by the members with assistance, guidance and supervision of the Centre Officer (Field Officer). The members support each other emotionally and financially by guaranteeing the repayment of each of their loans. The peer pressure and close social ties ensure the timely repayment of loans as well credit discipline.

The members jointly stand liable for the repayment of the loan disbursed to each of them. A guarantee note for the same is taken when the group is formed; as these micro loans are collateral free, hence peer pressure is the only way to ensure timely recovery. Like most the MFIs, Midland Microfin extends loans only to women as it is established that women are prudent borrowers, as they are better end users of money and endeavour to uplift their families.

JLG is a proven concept of risk free lending in India and other parts of the globe. In India many MFIs have been successfully implementing this model of lending with more concentration on southern and eastern parts of the country. We are the first Punjab based MFI to introduce this concept with latest Technology. Our Branch Managers and Centre Officers outreach the communities and create awareness about the benefits of this concept. They make new members, form groups and meet them over a period of time.

Financial Inclusion


Malegam Committee also recognizes the contribution of MFIs towards financial inclusion. “Microfinance is an important plank in the agenda for financial inclusion.” – Malegam Committee report.

India is an upcoming economic powerhouse, but many of our problems still exist. Healthcare is a critical issue, which remains out of reach of the majority of the world’s population. The Reserve Bank of India and Govt.of India want that more and more people should be brought into the purview of mainstream banking. Commercial Banks have made efforts to open bank accounts of each and every individual in their area of operation. On august 28, 2013 Govt of India announced Pradhan Mantri Jan-Dhan Yojnaunder which more than 125 million new bank accounts were opened. The object is to provide atleast one basic banking account in each and every household. However, the banks consider giving loans to the poor to be too costly and risky. Therefore MFIs play a vital role in financial inclusion of those who are outside the reach of commercial banks. World over, microfinance is looked upon as source of credit-based poverty alleviation and financial inclusion. This financial inclusion drive by the government is making way for the MFIs to lend through banking channel and offer cashless disbursement which ensures risk free lending.

Resources


To know more about Microfinance :

Microfinance Gateway www.microfinancegateway.com
Consultative Group to Assist the Poor (CGAP) www.cgap.org
Grameen Bank www.grameen-info.org
Microfinance Institutions Network www.mfinindia.org;
Micro Credit Summit Campaign www.microcreditsummit.org
Sa Dhan : Association of Community Development Finance Institutions www.sa-dhan.org
South Asian Microfinance Portal www.microfinancesouthasia.net
World Bank www.worldbank.org
Microfinance.com www.microfinance.com
Mixmarket.org www.mixmarket.org
Pradhan Mantri (Prime Minister) Jan-Dhan Yojna www.pmjdy.gov.in
Mfin www.mfinindia.org

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