Proposal on

By Khalid Khursheed Qurashi

Jamia Millia Islamia,

New Delhi 110025

I. Title Micro Finance and its Impact on Development of the State of J&K II. Abstract
If we stop thinking of the poor as victims or as a burden and start recognizing them as resilient and creative entrepreneurs and value conscious consumers, a whole new world of opportunity will open up.
Dr. C.K. Prahalad. Distinguished management expert at the University of Michigan and author of The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits

This

research work will explain and examine the impacts, which have swept the Micro Finance Industry over the last few years or so. The origins of micro credit goes back centuries in South Asia. Usually aligned along caste and ethnic lines, and prominent among the trader and merchant communities surrounding major trading hubs , money lenders were known by various names shroff, seth and sahukars but performed the same functional. They were in the business of lending money to vendors of the village, for small durations of three to six months at exorbitant rates of interest. A vastly unorganized sector, microcredit in rural South Asia has flourished due to lack of adequate financial services. For example, The Reserve Bank of Indias attempt to bring money-lenders under the purview of the government and enforce stricter regulations on this organic industry has not yielded much success. The Money Lenders Act, which is supposed to be the doctrine for all money-lenders, is rarely followed or taken seriously. Further, the unitary structure of governance and the traditional nature of rural societies of most South Asian nations has rendered the enforcement capabilities of this legislation ineffective. In India, institutional micro credit has taken off since the IMF-driven reforms of the early 1990s. Some of the worlds largest micro-financing firms are now offering services in this country. According to a Forbes Survey, 7 of the top 50 micro-financing firms in the world are incorporated in India. Bandhan, a group- based microfinance operation that began in West Bengal in 2002 secured the 2nd place in this list4. While some estimates indicate that microcredit in South Asia has truly taken off, some believe that it is just the tip of the iceberg and that we are witnessing the beginnings of a vastly unexplored pyramid.

Research type: Exploratory.

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III. Micro Finance and the State of J&K In the politically unstable Kashmir Valley, microcredit has had a short history with few investors. The
large microfinance firms currently operating across South Asia have yet to enter the Kashmirs market. In addition, limited research has been done on the range of organizations currently employing microcredit in this area. Recognizing this, I will be conducting a basic research in this area of microcredit organizations operating within the Kashmir Valley performing an analysis of current operations, challenges, and the potential for future growth. Evaluating microcredit both at the institutional and ground level, this report will serve as a survey of microcredit within the Kashmir Valley and hopefully, a baseline to guide future microcredit endeavors by potential investors.

IV. Introduction
Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services. More broadly, it is a movement whose object is "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers." Those who promote microfinance generally believe that such access will help poor people out of poverty. Microfinance is a broad category of services, which includes microcredit. Microcredit is provision of credit services to poor clients. Although microcredit is one of the aspects of microfinance, conflation of the two terms is epidemic in public discourse. Critics often attack microcredit while referring to it indiscriminately as either 'microcredit' or 'microfinance'. Due to the broad range of microfinance services, it is difficult to assess impact, and very few studies have tried to assess its full impact.

Financial needs of poor people In developing economies and particularly in the rural areas, many activities that would be classified in the developed world as financial are not monetized: that is, money is not used to carry them out. Almost by definition, poor people have very little money. But circumstances often arise in their lives in which they need money or the things money can buy.

Financial & Economic Effects of Micro Finance

MFS will drive financial inclusion in the next decade; MFS could accelerate economic growth by up to 5 percent by fuelling entrepreneurship and creating jobs; MFS will reduce income inequality by providing financial access to the poorest segments.

V. Objective The objective of research is to study the Globalisation and it Impact on Indian Banking Sector. The
area of study would include: To understand Impacts of Micro Finance in the areas of Development. Study different types of Opportunities/Risks involved with Micro Finance system. Detailed study of Major Impacts in Micro Finance on the State of J&K.

VI. Methodology Research always starts with a question or a problem. Its purpose is to question through the application
of the scientific method. It is a systematic and intensive study directed towards a more complete knowledge of the subject studies. Marketing research is the function which links the consumer, customer and public to the market through information information used to identify and define marketing opportunities and problem generate, refine, and evaluates marketing action, monitor marketing actions, monitor marketing performance and improve understanding of market as a process. Both primary and secondary data is used in the research .To conduct the research the data is collected by two sources. But mostly Secondary data will be collected and analyzed. Primary Data: The primary sources of data refer to the first hand information. Primary data is collected from the Industrys internal policies regarding Management. Secondary Data: Secondary data is one, which already exists and is collected from the published sources. The sources from which secondary data was collected are like Publications of various Financial Institutions, Sources like Economic Times, Business Magazines and Internet. Sampling Biases Sampling biases will occur in different forms. First, at the institutional level, those interviewed were senior management of the microcredit programs for their institution. Second, at the ground level, to access the borrowers.

VII. Research Limitations

Data will been collected on the basis of convenience. As project is being under taken during the college, so time is one of the constraints. Banks and other related Micro Finance Institutions are not comfortable giving their details on what kind of policies they make and Impacts of those policies on the particular business of the Bank Area is also one of the limitations, as the research will be done in the particular segments taking in consideration the vast Financial System.

VIII. References and Bibliography

www.microfinancegateway.org/gm/document-1.9.28984/49.pdf http://www.microfinanceinsights.com/ Brochures provided by the Financial Institutions. www.printsasia.com/book/ Office Interviews. Websites of Financial Institutions. Reserve Bank of India Website. Economic Times. http://ibnlive.in.com/news/ http://en.wikipedia.org/wiki/ Financial institutions www.google.com/scholar/ www.ey.com

Khalid Khursheed Qurashi Jamia Millia Islamia, New Delhi

Place: New Delhi Date: 18-07-2011