Several ways of forming groups in micro-finance activities

Bandhan Bank Microfinance

The Bandhan Bank was established to provide micro-finance to the self-help groups consisting of women only. Here are a few microfinance strategies meant for Bandhan Bank to accelerate their cause-

  1. Bull Whip Model– In this method of 1-2-1-2, only one person who has been successful in the micro-finance lending, will guide two more persons under him. These two men then guide one person.
  2. Co-operative Model- In this method of 5-5-5, a group of 5 persons will act as a team liable for any failure. This is in the case of farming or allied activities. The loans are dispersed in a group of 5.
  3. The Apprentice Model- In this method of 1-1-1, each one will teach one. This happens in the case of handloom and embroidery, where a master teaches an apprentice, and the method rolls on.
  4. Individual Model- In this method, only a single person is a part of the lending from the Bandhan Bank. This happens in the case of bigger farming loans.
  5. Group Disbursal Model- In this method of 3-3-3, groups of three formed help each other in working together. They may form cow herding groups. This is similar to the co-operative method, but with a difference in the number of group members.

I guess with the introduction of the World Bank’s expertise in the Bandhan Bank, this will be a boon.

Apart from this, Bandhan can play a very important role in financial inclusion in India by taking up the following-

  1. Providing financial literacy & awareness for financial empowerment where agents are trained to act as supervisors
  2. Providing loans only for productive purposes for various self-help groups and activities
  3. Providing loans for education of their children and the loan range is INR 1000 to INR 10000
  4. For books & fees etc. & also provide health loan, emergency health requirement & sanitation purposes including basic knowledge impart for finance
  5. For real financial inclusion they need to target families and work for their uplift of their life conditions and standards
  6. Increased emphasis on grassroots level banking for maximum reach and financial inclusion
  7. Keeping up to its main objective of poverty alleviation & women empowerment by introducing organised banking services and products designed especially for women

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