Financial Inclusion and MFI’s

Microfinance Institutions has gain its place in concept of financial inclusion. Eight members Committee on financial inclusion under chairmanship of C. Rangarajan was established and studied the various aspect of the financial inclusion give various recommendations for the inclusion of financially excluded segments of the society. Chapter VIII of the financial inclusion report is giving complete picture about important and role MFI’s in financial inclusion. Let us have quick look at what is financial Inclusion?
Financial Inclusion is the delivery of financial services at affordable cost to disadvantage segment of the society. The object of the financial inclusion is to extend the scope of activity of organized financial system to include within its amit people with law income. NSSO data indicates that 45.9 million farmer household in the country( 51.4%) out of total 89.3 million households do not access credit either from institutional or non-institutional sources. Only 27% of total household are indebted to formal sources( 1/3 are also borrow from informal sources. Financial exclusion is very high in North-Eastern region. Committee is in opinion that financial inclusion can be substantially enhanced by improving supply side or delivery system. It is estimated that there are 1000 NGO-MFI and 20 companies MFI in India. Company MFI’s are account for 80% of business. There are around 30,000 cooperative organization engaged in microfinance activities. The proposed microfinance bill defined microfinance services as “providing financial assistance to an individual or eligible client either directly or group mechanism for,
1. an amount not exceeding Rs. 50,000/- in aggregate per individual, for small and tiny enterprise, agriculture, allied activities.
2. an amount not exceeding Rs. 1,50,000/-in aggregate per individual for housing purposes.
Microfinance could play an important role in financial inclusion as they are having great rural touch, have greater understanding the of issues specific to rural poor and have grater accessibility to rural poor.
Following are some of the important recommendations of the committee.
1. There is need to recognize separate category of Micro-Finance-Non Banking Financial Companies(MF-NBFC), without any relaxation on startup capital and subject regulatory prescription applicable for NBFC. Such companies (MF-NBFC) could be defined as that provide Micro-insurance, thrift, credit, remittance and other financial services up to specified limit to poor in rural areas. To ensure that this provision used by NBFC, which are focused on providing microfinance to poor, it should be specified that at least 80% of their assets should be in form of microcredit upto Rs. 50,000/- for agriculture, allied, non-farm activities and in case of housing, loan upto Rs. 1,50,000/- per individual barrower given through direct or group mechanism.
2. MF-NBFC as BC
To enable poor to have access to saving services, MF-NBFC recognized as Business Correspondent of bank only for providing savings and remittance services.
3. Relaxation in FIPB guideline.
Current guidelines used by FIPB (Foreign Investment promotion board) require minimum $ 500000/ equity from foreign entity. NBFC’s are eligible to access such funds and leverage local capital market financing. MF-NBFC may able to attract to social investor with relatively modest means from whom such high level of investment beyond the reach. As MF-NBFC ‘s initial capital need not be very large, The committee is of view that minimum amount of foreign equity of MF-NBFC s may be reduced to level of $ 100000/-
4. MF-NBFCs as micro insurance agents.
5. Code of conduct.
A voluntary mutual code of conduct has been prepared by some MFIs covering Aspect s including Mission, governance, transparency, interest rates, handing of customer grievances, staff conduct, and recovery practices. After due consultation such code of conduct may be made mandatory for MFIs.

6. Micro Financial Sector( Development and Regulation) Bill 2007
This Bill introduced in parliament in March 2007. For improving the effectiveness of the bill committee made an certain recommendations. NBFC and section 25 companies are left out of the purviews of the bill. NBFC are currently regulated by RBI. And exempted from registration as NBFC if they do not take deposit. It is recommended that section 25 companies are brought under the preview of this bill. Cooperative societies register under ‘MACS Act’ promoted by few state government are eligible to mobilize the saving from their members. For mobilizing savings, these societies also need to register with NABARD under proposed bill. Hence there is conflict between proposed bill and ‘MACS Act’. Cooperative societies are providing credit and saving services to their members. Therefore Cooperative societies ate left out of the act.



Faith
Amol
nakveamol1@gmail.com
9823252320

Microfinance is HR driven business.

Microfinance is the extension of financial services to poor who are excluded from scope of activity of organized financial system. Rangarajan Committee on financial inclusion has proved the importance of Microfinance Institution (MFI) in social sector. And suggested several recommendations for MFI. Rough estimate indicate that there are around 1000 NGO and 20 companies MFI in India. The sector needs to tap the financially excluded regions of the country. So, it got tremendous potential and can take the advantage of economies of scale. My experience of working with microfinance institution has forced me to conclude that it is totally HR driven business. Though it is true for all industry but in case of MFI the pendulum is more towards it. Microfinance requires very special skill set with appropriate attitude to serve the business. So searching the desired competency personnel, attracting, recruiting, rewarding and retaining them is tedious task. Attrition among MFI’s again challenge for the business. As business growing rapidly by taking the advantage of economies of scale, there is need to reward talent among the talent and this is very powerful tool while retaining talent. This business involves lot of creativity and innovations. Therefore HR persons need to really act as catalyst of Change as change agents. Changes are in the form of replacing old financial product, introduction of new products, changes in delivery form of services, change in work location etc. These change need to be carefully escalate to all employees very carefully.
To cope with changes and managing innovations personnel’s needed to be given a proper Training. Training must be an ongoing activity of the organization to sustain in the business. It’s all about developing an organization with requisite skills and competencies. In future those organizations grow and sustain in competitive world that have employee friendly HRM practices. After all HR is competitive edge proved in a business.


Faith
Amol
nakveamol1@gmail.com

My Resume

Name : Amol Pralhad Nakve
Course : MBA
Specialization : H.R.

Past Employer: Basix India Ltd.(June 08 to June 09)
Designation: Regional HR Executive (North India)
Location: Agra (U.P.)
Role: Managed all HR functions of North India region.
Managed HR work on Rajasthan Gove’s “Bhamashah Financial Empowerment Project” at Jaipur (RJ).
Training Program Attended:
1: Competency Based Interviewing Skills at Bhopal.
2: Constructing Personal Mission Statement.


Summer Project During MBA:
Company : Glaxo SmithKline Pharmaceutical Ltd (GSK). Nashik(MH).
Project Title : Study and analysis of Attrition and retention strategies
For GSK and GSK R & D Department.
Project Duration : 2nd May – 31st June 2007
Synopsis : Study involves the collection Primary data and Secondary data..
Primary data was collected by Exit oral interview, Questionnaire. Causes and effects were analysed with the help of these data and information. After these analysis suggestions for improving the old retention strategies for GSK and GSK R & D Department was given. Study of different H.R. Function. And Study of Factories Act, 1948.

Academic Profile:
1) MBA-HR from Department of Management Sciences, (PUMBA), University of Pune, Pune. from the class of 2006-08
2) B.Sc. (Biotech) from Dr.Ulhas Patil Sci. Collage. Jalgaon. (North M.S. University.) in2006
3) Presently pursuing two year Post graduate distance diploma in Human Rights with Indian Institute of Human Rights, New Delhi.(09-11)

Computer Literacy:
· Completed Six month Certificate Course in Computer Programming of Maharashtra state Board of Vocational Examinations. {MS-office, C, Java, HTML (web page Development)}.
. Profitient in MS-office 2007

Extracurricular Activities:
> Administered a Training and Development (Capacity and Skill Enhancement Workshop) program for Finolex Cable Ltd. For marketing managers and executives at I2IT, Pune on 23rd to 25th Jan 2008.
>Life member of Biotech Research Society of India (BRSI), Trivendrum.
>Participant in KVPY at IISc Bangalore. Title of project Extraction of wound healing component.
>Active participation in Fermentation Tools and Technology workshop at Nashik.


Personal Details:
Correspondence address : C/o S. P. Chavan. 3rd Fl, Om Shanti Apartment, Ambil Oda Colony, Sadashiv Peth, Pune. 411007

Permanent address : 4/3, Police Housing Society, Near Traffic Garden, Jalgaon.
Mobile Number : +91-09823252320
E-Mail : nakve_amol1@rediffmail.com
Blogg : http://amoln.blogspot.com/
Date of Birth : December 29th, 1984.

Hello

Hi,
It had been a long time and terrifying thing for me, being away from blog.


Faith
Amol

Thumb rule for HR………………….

Thumb rule for HR………………….


Hi,



First of all HAPPY NEW YEAR to all of you………


HR always needs to keep in mind that the language that they are talking should be of employees but the world should be theirs. This is the thumb rule for any HR professional..







Faith
Amol