Financial companies that
provide small loans to individuals without access to banking facilities are
termed as Microfinance Institutions. These can be Credit Unions,
Non-governmental organisations, or commercial banks providing for “small loans”
that in India accounts for any loan below Rs.1 Lakh. The primary aim is to
eradicate poverty, though for some it is an opportunity to scale up sales to
attract more consumers.
Microfinance Institutions or MFI have an integral role to play in the Indian
economy as they provide loans as they also educate the underprivileged about
correct utilization of funds.
Many big names pop up if we are to discuss the largest
microfinance company in India. Some of the top names from the past
Financial Year are mentioned.
1. State Bank of India
Termed as “too big to fail” by the Reserve Bank of India, State bank of India
is the biggest among all microfinance companies in India. SBI provides a wide
range of microfinance solutions to choose from.
Functions provided:
- Microloans of up to Rs.50,000
- Loans to self-help groups of women
- Machinery and farm equipment funding, for small entrepreneurs.
- Training programs to educate the rural populace about handling finances
2. Equitas Small Finance Bank Ltd.
One of the best MFI in India, this company from Tamil Nadu started operations
in 2016. Within this short run of active working, they have managed to become a
reputed name, helping thousands of needy people gain a stronger financial
footing of their own.
Functions provided:
- Loans to the youth aspiring to start a small business or become self-employed
- Microloans to poor women, helping in financial independence.
- Financial assistance to people with special needs.
3. Mahindra & Mahindra Financial Services
M&M Financial Services has helped numerous aspiring youngsters to help them
accomplish their entrepreneurial dreams. With over 1200 branches, they have as
yet served 4 million Indians with microfinance services.
Functions provided:
- Personalized finance for home development requirements, vehicle purchases, etc.
- Top financer for farm tractors.
4. Bharat Financial Inclusion Ltd.
Bharat Financial Inclusion Ltd. was founded by Vikram Akula in 1997 as SKS
Microfinance Ltd. At least 50 lakh poor women from over one lakh villages in
India have been helped by their microfinance services.
Functions provided:
- Microloans between Rs.2000 – Rs.12000 to women trying to set up a vegetable shop or buy a cow.
5. Spandana Sphoorty Financial Ltd.
One of the most reputed microfinance companies in the sector, Spandana
Sphoorthy Financial Ltd., aims at providing tangible financial support to the
women of rural India – helping them live a self-sustained life. They are
headquartered in Hyderabad and have been offering microloans since 1998.
Functions provided:
- Various types of loans such as – Generation Loan, Small Ticket Personal Loan, Micro Enterprise Loan, Group Loan, and Gold Loan too.
- Products aimed at poor women.
All these and many more banks are planning to expand their microfinance capabilities and reach the youth in the farthest peripheries of the country. They are on the lookout for banking licenses in order to open microfinance banks – a move that is sure to cause a boom in the microfinance sector in India in the coming future.
