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COMPETITION AMONG THE MICROFINANCE INSTITUTIONS AND ITS

By Carl King,2014-09-10 01:00
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COMPETITION AMONG THE MICROFINANCE INSTITUTIONS AND ITS

    COMPETITION AMONG THE MICROFINANCE INSTITUTIONS AND ITS IMPLICATIONS IN GUNTUR DISTRICT Competition Analysis Matrix BANK SHARE SPANDANA Product (Design) Purposes (agric, personal No standard purpose Agriculture, Business, Dairy, Personal Business, business, any) mentioned in the program working capital loan Trade/Commerce, Transport,

    Social services, Agriculture Collateral / Guarantees joint liability of the group Joint liability of 10 members, Joint liability of 5 members, the

    the individuals assets like own individuals assets like own

    house, regular income, etc are house, regular income, etc are

    checked and noted. checked and noted. Loan

    utilization checks are carried

    out after one week. Duration of loan Term loan of 3 years 50 weeks 50 weeks Repayment Periodicity monthly Weekly. weekly (weekly, monthly)

    Grace Period not specified None. None Group/ Individual Group. Group Group Loan size Amount Group loan depends on the General Loan: Ranges from first loan is Rs.5000,and

    ratio of corpus to bank loan Rs.1000 to Rs.7000 in the first subsequent loan cycles of

    (1:1 To 1:4),it also depends on cycle of loan and increases Rs.7000-10000-12000-15000

    the bank manager and socio subsequently cycle by Rs.1000

    economic condition of the with a cap of

    Mandal Rs.11000 .Seasonal loan of

    Rs.1000-2000 ,small enterprise

    loan

    Access Requirements The group should have been registration fee of Rs.100 for registration fee of Rs.50 for (registered business, undertaking savings and each loan taken, provide each loan taken, and attend attendance of sensitization internal lending for at least 6 husband and wife photograph weekly centre meetings at the meetings etc, cash flow, months, maintaining proper and attend weekly centre stipulated time business plan, tax clearance records, regular meetings, etc. meetings at the stipulated time certificate etc)

    Price Interest Rate 8.5-9 percent 15% 15% Method of changing (flat, Diminishing balance Flat. Flat declining balance)

     1

    Application fees No documentation Rs 2/- for the pass books and 1% service fee

    charges(No stamp duty on registration fee of Rs.50 at the

    interse agreement) time of joining

    Appraisal Fees None. None. None Commission fee None. None. 1 % service fee Monitoring fees None. None. None Insurance/ Other fees None. Collects 1% of loan amount coverage ranges from Rs.5000-

    disbursed as contribution Rs.12000 for the death of the

    towards insurance which is borrower after adjusting the

    paid to the relatives of the outstanding loan amount

    member in case of death of

    the member.

    Compulsory Savings Any amount of monthly Rs.10 per week per member Rs.10 per week per member

    thrift ,at group level and they

    are withdraw able for internal

    lending

    Late Payment Management. Depends highly on the Zero tolerance -Group Zero tolerance -Group

    Managers attitude towards members suffer. Group members suffer. Group

    SHG, notices are issued members are not allowed to members are not allowed to

    leave the centre meeting, and leave the centre meeting, and

    the rest of the group has to the rest of the group has to

    pay the amount pay the amount, personal

    assets of the defaulted

    member are sold to repay the

    loan. Pre Payment Incentives The groups pay the loan with in None. None

    10 months in lure of more

    linkages.

    Promotion Marketing/ Information Public meetings and Word of mouth, village Word of mouth, village

    promotion through VELUGU meetings, using influencing meetings, using influencing

    people of the village. people of the village. Advertising Advertising, posters displayed simple posters using simple posters, word of mouth

    at public places and door to comparative advantage as

    door promotion with the help the criteria for attracting

    of Animators. customers, word of mouth

    Place/Access

     2

     Bank is located usually in the Centre (collection centre in credit available in the village

    Mandal headquarters the village), branch office in

    the nearby small town.

    Positioning Slogan/vision Economically Empowering

    Women.

    Corporate image (to be perceived to be instrument for Perceived to be largely an Efficient and militaristic credit generated after client empowering and developing institution for poor and provide machine with zero tolerance interviews) entrepreneurship in women sustainable livelihood. for non payment Product Image (to be have various Govt. schemes to Have various products such as credit can be used for generated after client offer and low cost loans milk cattle loans ,small anything interview) enterprise loans, etc

    Physical Evidence

    Are application forms clear Clear language aided by sub-Easy form to complete. Clear (language) staff of the banks

    Do they provide a clear loan No, the bank tells the SHG to Yes a repayment schedule Yes a repayment schedule repayment schedules repay the loan in 10 months provided provided

    instead of 36 months

    Do they provide a copy of the Yes, in form of loan account Yes, loan book signed during Yes, loan book signed during loan agreement? book training training People . Customer service /Help desk improper handling of clients, Provided with well informed Helpful, well informed

    poor customer service at the officers and willing to give

    bank information.

    Process Application to Disbursement minimum 4 months After 2-3 weeks of saving After training receipt of field Time (Institutional perspective) (APMAS,2003) officer's recommendation i.e.

    2 days.

     3

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