Side-by-Side - A Slice of Microfinance Operations in India 2004

This paper presents a report of the financial and operational data of microfinance institutions (MFIs) in India for the financial year 2003-2004. The report studied the dominant microfinance models and legal forms and was based on the core six financial performance indicators.

The paper presents the following details of the report:

• Analyzed 53 MFIs;
• Classified MFIs by:
  • Microfinance models,
  • Legal form,
  • Number of years of microfinance operations,
  • Working methodology;
• Assessed outreach by region and by operational model;
• Studied active clients - clients of savings are more than clients of other services;
• Analyzed creation of poor's access to credit, insurance, savings and other services.

The paper also discuses Sa-Dhan's endeavor in setting financial performance standards. Using the categories of sustainability, portfolio quality and efficiency, Sa-Dhan arrived at:

• A common set of reliable indicators to be measured;
• A common methodology for calculating these indicators;
• An agreed benchmark for each indicator.The paper then presents a snap-shot of the performance indicators of 42 MFIs.

The paper concludes that the report shows:

• The MFIs in India show readiness to be transparent in their operational and financial dealings;
• The outreach figures are encouraging;
• More progress has been made in the southern region;
• The presence of companies and self-help-groups has emerged as a prominent feature of providing finance to the poor on their own terms.