Leading Micro Finance Institutions in India….
Microfinance companies offer financial services in both savings and credit form. India’s leading MFI plays a crucial role in the economy of the country by helping the poor and underprivileged section.
Apart from providing financial help, these microfinance companies educate the poor people about utilizing funds in the right way.
You must know about the top microfinance companies in India who are providing financial help to the needy section of society.
What is Meant by Microfinance?
Microfinance is a kind of financial service in which loans, insurance, and savings are offered to entrepreneurs who do not have access to investors or banks. Microcredit is another term for microfinance.
Individuals with low income do not get the opportunity to start their business easily. They need financial help but do not qualify for a bank loan. As a result, they have to take help from microfinance companies or lenders.
How Does Microfinance Work?
Microfinancing helps the underprivileged dreamers in starting their business and create a brand. They provide the money that consumers need to invest in their business.
The consumers seek small loans so that they can purchase specific equipment or manage the capital for opening their business.
The co-founder of CNote, Yuliya Tarasava said that the ultimate goal of microfinance is to help its users outgrow the microloans so that they can get ready for a bank loan.
Although the microfinance companies in India are doing a great job for the underprivileged section of society, there is a downside to it. The microloans have higher interest rates than the traditional bank loans.
Many people do not get success in their business with the small loans that MFIs provide. Instead, these people run into debt that increases their problems. If an individual does not have a proper business plan and financial knowledge, he cannot become successful by taking a microloan.
Types of Microfinance Organizations
The microfinance organizations offer microfinance services to the deprived section of society. Muhammad Yunus, a citizen of Bangladesh is the pioneer of microfinance. Kiva, a microlending organization based on crowdfunding took inspiration from the work of Yunus.
There are mainly two types of microfinance institutions: for-profit organizations and non-profit organizations. Citi Microfinance and General Electric Consumer Finance are examples of for-profit companies. Kiva, BRAC, and Accion are examples of non-profit organizations.
The microfinance companies offer small loans to individuals and help them set up a savings account. The top MFIs also assist their users in obtaining insurance for various purposes such as life insurance, health insurance, and property insurance.
Top 10 Microfinance Companies in India
Microfinance in India is very common. People in rural and semi-urban areas often require financial help for starting their business. They take help from microfinance companies because they offer financial services on a small-scale.
Anyonya Cooperative Bank Ltd. at Vadodara was the first microfinance company in India. It is not functional at the present moment. The bank used to offer small loans to farmers. In today’s date, there are a total of 82 major microfinance companies in India.
The MFIs provide small loans to people so that they can rise from poverty and have a successful business. If a person wants to get self-employed by running an auto-rickshaw, he can approach the top MFIs in his area.
Now, let’s take a detailed look at the top microfinance companies in India:
State Bank of India
State Bank of India is the biggest microfinance company in India. They provide a wide range of microfinance solutions. They offer microloans of up to 50,000 INR for the development of villagers.
State Bank of India provides loans to the self-help groups (SHGs) of women as a part of India’s poverty alleviation drive.
They fund machinery and farm equipment for small entrepreneurs. They also conduct several training programs to educate rural people about handling their finances.
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Equitas Small Finance Bank Ltd.
Equitas Small Finance Bank Ltd. is one of the best microfinance companies in India. They are a new microfinance company in Tamil Nadu that began their operations in September 2016. Equitas Small Finance Bank Ltd. is a part of an NBFC called Equitas Holdings.
The MFI provide loans to the youth who aspire to start a small business or want to become self-employed by providing various services. They offer microloans to poor, helpless women who are struggling for independence. They empower women through their financial services.
Equitas Small Finance Bank Ltd. also offers loans and financial assistance to people with special needs. In such a short span of time, the bank has successfully helped thousands of poor and needy people.
Mahindra & Mahindra Financial Services
Mahindra & Mahindra Financial Services (M&M Financial Services) is a leading microfinance company in India. They have helped plenty of aspiring young people and women to accomplish their dreams of being financially independent.
M & M Financial services offer personalized finance for home development requirements, purchase of vehicles, and other endeavors. They are the top financer in India for farm tractors.
The MFI has 20,000 employees in their 1200 branches. They are known for serving more than 4 million people in India with their microfinance services.
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Ujjivan Financial Services
Ujjivan Financial Services is a non-banking financial company in Bangalore. The company started in 2005 with the aim of providing a vast range of financial services to the poor people of India.
In the present day, the company has 469 branches spread over 24 Indian states and Union territories. They offer financial services in 209 districts of India. Therefore, they are one of the largest microfinance companies in India.
Ujjivan Financial Services established the Ujjivan Small Finance Bank in February 2017. Their motto is to offer banking and microfinance services to the economically deprived sector of the country.
Bharat Financial Inclusion Ltd.
Bharat Financial Inclusion Ltd. was earlier called SKS Microfinance Ltd. Vikram Akula founded the company in 1997. They offer microloans between 2000 INR and 12000 INR to poor women for setting up a vegetable shop or buying a cow.
They provide financial support to millions of people through their microfinance services. They have helped about 50 lakh poor women in one lakh villages of India.
Spandana Sphoorty Financial Ltd.
Spandana Sphoorty Financial Ltd. is one of the most reputed microfinance companies in India established in 1998. They have their headquarters at Hyderabad.
They provide various types of loans such as Income Generation Loan, Small Ticket Personal Loan, Micro Enterprise Loan, Group loan, and Gold loan.
All the products of Spandana Sphoorty Financial Ltd. are aimed at poor women so that they can live a proper sustainable life.
Bandhan Financial Services
Bandhan Financial Services is a top MFI in India. Founded in 2001, the company has provided help to millions of rural and poor people in India. They have their head office at Kolkata.
The objective of Bandhan Financial Services is to alleviate poverty and promote women empowerment. They have about 2022 branches in 22 Indian states and Union Territories. They provide financial support to people living in districts and villages.
Share Microfin Ltd.
Share Microfin Ltd. is one of the most popular microfinance companies in India. Founded in 1989, Share Microfin Ltd. was the first MFI in India to get a Non-Banking Financial Company license.
They are spread in 19 Indian states, providing microloans to underprivileged people. The company has benefited the lives of millions of people.
Shri Kshetra Dharmasthala Rural Development Project
Shri Kshetra Dharmasthala Rural Development Project (SKDRDP) is a reputed charitable trust. The Government of Karnataka has done the microfinance company registration. The aim of the MFI is to promote women empowerment in rural areas of the country.
They offer microfinance solutions to poor village women. Their microfinance activities and charitable programs are helping housewives and young women in more than 25,000 villages of South India.
Asmitha Microfin Ltd.
Asmitha Microfin Ltd. is one of the best microfinance companies in India. Founded in 2002, the aim of the company is to provide small loans to the poor village women. They have their headquarters at Hyderabad.
The small ticket loans of Asmitha Microfin Ltd. help the rural women to start a small business. This uplifts their lives to a large extent. They are serving in 13 states of India. The sole mission of the MFI is to help women living below the poverty line who don’t have the access to traditional banks.
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Wrapping It Up
The list of microfinance institutions in India does not end here. There are emerging old and new MFIs in India such as:
- Adhikar Microfinance Pvt. Ltd.
- Future Financial Services Ltd.
- ESAF Small Finance Bank
- Fusion Microfinance Pvt Ltd
- Annapurna Finance Pvt. Ltd
- Arohan Financial Services Pvt. Ltd
- BSS Microfinance Limited
- Asirvad Microfinance Limited
- Cashpor Micro Credit
- Indian Cooperative Network for Women, etc.
- Belstar Microfinance Private Limited
- CreditAccess Grameen Limited
- Bharat Financial Inclusion Limited
- Bhartiya Samruddhi Finance Ltd
The microfinance industry in India will grow more in the forthcoming days as more Indians will move towards entrepreneurship. Startups also avail microfinance to kick start their business.
A large number of banks plan to offer microfinance to the youth of the country. The existing microfinance companies in India plan to apply for banking licenses so that they can open microfinance banks. In the forthcoming years, the microfinance sector is all set to witness a boom in India.