Jaipur: The microfinance sector has emerged as an effective strategy for addressing poverty and empowering the poor – mainly women in Rajasthan. The progress of various micro finance initiatives to catalyze this sector in the last 5-6 years has been laudable indeed.
This was disclosed at the Annual Micro Finance Colloquium 2008, where policymakers, representatives of banks and financial institutions, and key stakeholders gathered to deliberate over two days on the status of the micro finance sector in Rajasthan and develop a vision for its growth and expansion.
Organised by the Jaipur based Centre for Micro Fiancés (CMF) on January 9-10, the meeting disclosed some interesting statistics and information.
The number of SHGs (self-help groups) linked with banks increased from 22,742 in 2003 to 1, 37,000 by March 2007. During the same period, the amount of credit disbursed through SHGs increased from INR 21.8 crores to 144 crores. SHG clusters and SHG federations have also been established in the state.
Although these developments are commendable, a lot more needs to be done, the talks concluded. There are still 3-4 million households in rural areas and about 1-5 million poor in urban areas who do not have access to financial services from formal or semi-formal sources.
CMF Executive Director Jai Pal Singh said that the increase in amount of credit disbursed through SHGs in the state was thanks to the few voluntary organisations working in the field.
Sakh Se Vikas (development through credit), launched in March 2003, is an initiative supported by Sir Ratan Tata Trust. It emphasised development of member controlled and member focused microfinance which is financially self-sustaining.
SSV partners now plans to reach out to over 100,000 families by 2010. It is working in collaboration with other stakeholders, such as the Department of Women and Child Department (DWCD) and the Bank of Baroda.
CMF in collaboration with DWCD has piloted a sustainable livelihood enhancement model for development in the districts of Dungarpur and Alwar by involving and strengthening 750 SHGs through NGO participation.
The CMF’s Rajasthan Micro Finance Report 2007 was released on the concluding day, anaylsing the opportunities and challenges ahead for the financial inclusion of the poor. This report is the first of its kind and it will act as a benchmark for the sector.
Over six chapters the report covers the status of economy, the demand side of microfinance and current practices, its delivery/supply, resources, and legal and regulatory frameworks. The final chapter outlines the major opportunities and challenges that need to be addressed for scaling up the microfinance sector in Rajasthan
Established in 2005, the CMF collects, compiles and makes available research/studies on microfinance, government policies, success stories and other experiences that are useful for micro finance practitioners for planning and implementing programmes.