FINANCIAL INCLUSION STATUS OF NON-BANKING FINANCE COMPANIES – MICRO FINANCE INSTITUTIONS (NBFC-MFIS) ECONOMIC EMPOWERMENT IN INDIA

Abstract

INTRODUCTION
Micronance in informal system was in vogue in India in the
form of chit funds, etc., since time immemorial. It came into
existence under formal system with the advent of cooperative
movement in India in the beginning of the last century. The
micronance is primarily based on the principles of cooperation
namely, mutual help, democratic functioning etc.
Though, the co-operative movement was initially envisaged
with unlimited liability and small size of societies consisting of
homogenous groups, over the years in the quest for improving
the viability of co-operatives, large societies with limited
liabilities were organized. This apart, the evolution of State
partnership in co-operatives with entrenched bureaucracy
etc., distanced co-operative movement from the spirit of
micronance movement. The micronance industry's loan
portfolio stood at Rs.1.79 trillion in FY19, a growth of 40 per
cent over the preceding scal year. Of this share of Non-
Banking Financial Companies-Micro Finance Institutions
(NBFC-MFI) was the highest at 68,156 crore, 38 per cent of the
portfolio; banks came next with Rs.59,999 crore with a share of
34 per cent. NBFC-MFCs also have highest number of unique
live customers and they top on parameters like the number of
active loans, size of the portfolio and amounts. Economic
empowerment as NBFC-MFI micronance as provision of
thrift, credit and other nancial services and products of very
small amounts to the poor in rural, semi urban areas enabling
them to raise their income levels and improve living standards
in India. Status of Micro Finance in India information from
various sources on the sector has over the years come out as a
credible document well received by policy makers as well as
practitioners are availing loans from this micronance
institutions from as a group, take loan from the bank
collectively, promote saving habit and develop self and
community assets among themselves.