People in urban, semi-urban and rural areas of India need some sort of financial help for their business and other requirements. These people are hesitant to seek the help of banks because of the long list of formalities to be fulfilled to get the required money.
This is where microfinance companies can help them out. These are financial institutions that offer small-scale financial services mainly for the people from the backward section of the country.
The finances offered by these companies can be of great help to these people in the following grounds:
- For increasing savings and for supporting self-empowerment.
- For smoothening the process of consumption
- For mitigating vulnerabilities to income shocks
- For undertaking economic activities
Reports state that companies operating in the field of micro financing in India, play a major role in the development of the country to a great extent.
Particularly the top 10 companies operating in this field are known to account for nearly 74 percent of the total outstanding loans.
Top 10 Microfinance Companies In India
Here are the details about the companies that hold the top 10 positions in this microfinance sector in India:
SKS Microfinance Limited
This company was incorporated in the year 2003, but they commenced their microfinance operations well in advance in the year 1998 itself. The company holds the legal status as a Private Limited Company and they are operating from the state of Andhra Pradesh in India. The net worth of the company is growing right from the March 2007 and they have a good asset quality as well.
Asmitha Microfin Ltd.
This Public Limited Company was incorporated in the year 2001 and they commenced their Microfinance operations from the year 2002. This company holds a position as one among the top 5 micro finance companies in India due to outstanding loans. This company generally lends to 5-member women groups under the Grameen Bank Model and so they hold a strong rural presence in India.
This Company was incorporated and began their micro financing operations in the year 2001 and they hold the legal status of being a society. They have both rural and urban presence and three different loan products are offered by Bandhan all with 12-month tenure. This NGO intends to transfer the entire loan portfolio to Bandhan Financial Services Private Limited, which is a non-banking financial company operating from India.
Microcredit Foundation of India
This foundation presently operates in the name of Madura Microfinance and it is a non-banking finance company. Their mission is to deliver viable credit to small businesses with the greatest potential to create economic value and scalable enterprise.
Saadhana Microfin Society
This society was incorporated in the year 2001 and they are offering micro finances for a tenure of up to 50 weeks at an interest rate of 15 per cent per annum on a flat basis.
This company currently operates under the name of Grameen Financial Services Private Limited as the latter company acquired Grameen Koota. They lend to 10-member groups and they offer three different loan products.
Sharada’s Women’s Association for Weaker Section
Shortly called as SWAWS is a non-governmental microfinance Institution (MFI), which began its operation in this field in the year 1999. Now, the majority of the loan portfolio of this MFI is taken over by SWAWS Credit Corporation India Private Limited.
Grama Vidiyal Micro Finance Pvt. Ltd.
This company was incorporated in the year 2007 and they offer finances at an interest rate of 12%. Their loan tenure ranges from 10-100 weeks.
Indur Intideepam MACS Federation Ltd
Incorporated in the year 2002, this company is operating from the state of Andhra Pradesh in India. They offer loans for tenures ranging from 11 to 30 months at the rate of 15 per cent per annum.
This is a Karnataka-based Non-Government Organization involved in integrated support and livelihood services for women and children right from the year 1988. They commenced their microfinance operations in the year 2003 and they are lending to self-help groups.
Of these top 10 companies, the top 7 of them have earned international recognition and they hold positions among the top 50 Microfinance institutions from all over the world as per the report of Forbes.