Micro Lending

Micro Lending Development

Mission & Approach

Mission: To create a national network of strong, viable and sustainable Microfinance Institutions (MFIs) for providing microfinance services to the economically disadvantaged people, especially women.
Approach:Complete Range of Financial and Non-Financial Services- Financial Support to MFIs-

  • Loan
  • Capacity Building Grant
  • Equity/Quasi Equity
Non-financial Services
  • Advocating Appropriate Policies and Regulations
  • Enhancing Corporate Governance of MFIs
  • Promoting Responsible Lending Practices
  • Creation of Lender’s Forum
  • Code of Conduct Assessment (COCA)

Micro Lending Development

  • Developed the capacity of 100+ MFIs
  • Cumulative Sanctions: ₹17571 cr
  • Cumulative Disbursements: ₹16234 cr
  • Impacted more than 38.1 million beneficiaries
  • SC/ST/ backward classes accounting for approx. 73% of the total beneficiaries.
  • Women proportion was 96-98% among the beneficiaries.
  • Brought out changes in the livelihood pattern by giving impetus to enterprise activity
Launched in April 2000 under collaboration with Department for International Development (DFID), UK to bring in best microfinance practices in India.
Collaboration was made with International Fund for Agricultural Development (IFAD), Rome in April-2002 for on lending support to MFIs.
  • Out of10 entities having received the SFB license from RBI, eight were partner MFIs of SIDBI
  • Need based interventions to facilitate smooth transition from MFI to SFBs.
  • Equity investment and resource support with provisions for conversion

Responsible Finance Initiatives

Key Initiatives

  • Capacity Building of MFIs
    Adequate and customized package of Capacity Building grant to MFIs on the basis of Annual Capacity Building Need Assessment Exercise
  • Transformation Loan to Scale up and Transform
    Support to NGOs/ MFIs to transform from ‘non-profit’ to ‘for-profit’ i.e. Corporate Structure viz. Companies/ NBFCs. Introduced in 2004, proved one of the successful innovations by MLDD.
  • Capacity Assessment Rating(CAR)
    CAR pioneered by SIDBI in microfinance sector got wide recognition & acceptance in microfinance sector CAR now become a pre-requisite for getting assistance from Banks/FIs
  • Creation of Portfolio Risk Fund
    In collaboration with GoI, Portfolio Risk Fund launched to meet the security deposit requirement of the MFIs.
  • Covered underserved pockets/ districts/ states (with emphasis on OBC, SC, ST, minority &women beneficiaries).
  • Creation of Risk Fund
    Fund created out of DFID grant support to expand micro lending operations to underserved regions of the country To address the concentration risk and the issue of regional

Responsible Finance Initiatives

Responsible Finance Initiatives