Principal Researchers: Amulya Krishna Champatiray and Parul Agarwal
Link to Interactive Map: Map of Microfinance
Link to Report: Map of Microfinance Final Report
Map Manual: Click Here
Project Status: Ongoing
The Map of Microfinance Distribution in India 2010, developed by the Centre for Micro Finance at IFMR Research, is an attempt to aggregate information related to the spread of financial services for the poor in India. The project captures important policy-relevant information such as penetration of financial services and the salient models of microfinance in various states, districts, and areas of the country and displays these statistics in a visually appealing way. The map also identifies regions that are untouched and undeserved by financial services providers. With this information,practitioners, policymakers and researchers can better understand the geographic distribution of financial services and make more informed decisions regarding expansion, replication and evolution of financial services.
The Map of Microfinance Distribution project gathered general institutional information, district-wise outreach, details of portfolio, product offering and other details from 103 MFIs across India. Researchers collected similar data from secondary sources for the preceding three years (2007-2009). State-level data on the SHG-linkage program was collected from publicly-available sources such as the Micro Credit Innovation Department and NABARD for the years 2008-2010. Researchers used this data to visually display growth in microfinance penetration among various groups for the last four years. Finally, researchers collected demographic and socioeconomic data for states, union territories and districts to enhance their analysis.
MFIs serve over 24 million clients who maintain Rs. 19,676 crores in loans outstanding as of March 2010. For-profit MFIs account for a large percentage of total client outreach (about 89%) and loans outstanding (about 90%). As of March 2010, nearly 81 million people (77% women) are being served by the SHG-linkage program which has Rs. 6,199 crores of savings deposits and Rs. 28,048 crores in loans outstanding.
Regional Penetration Imbalance
Over the past three years, MFIs in India experienced phenomenal growth, increasing the number of clients reached by 66 percent CAGR and total loan portfolio above 100 percent CAGR. Despite this growth, regional penetration has emerged as a challenge for the sector. The majority of microfinance services are concentrated in the south of the country, which accounts for 52% of all microfinance clients and 54% of all microfinance loan portfolios, compared to 23% clients and 22% of loan portfolio in the eastern states. The northeastern, northern, and central regions have very underdeveloped microfinance sectors – these regions account for only 2%, 6%, and 6% of client outreach respectively.
SHGs show a similar regional imbalance, with the south accounting for 52% of client outreach and 68% of loan portfolios and eastern states accounting for 21% of client outreach and 13% of loan portfolio. The northeastern, northern, and central regions account for 3%, 9%, and 3% of client outreach and 2%, 8%, and 2% of loan portfolio respectively.
Microfinance Penetration across Various Population Groups
MFI penetration among the total population (6%) and among females (11%) is highest in the south, with 26% of all households in the region currently being served by MFIs. The Western and Northern states have the lowest penetration among all households and women compared to other parts of the country. In Andhra Pradesh, 16% of women and 36% of all households are served by MFIs. Similarly, in Karnataka, MFIs have reached 12% of women and 32% of all households. In Tamil Nadu, these numbers are 9% and 20% respectively.
SHG (credit- linked) penetration is also highest in the south, where SHGs serve 24% of all women, 13% of the total population, and 61% of all households. Again, Andhra Pradesh, Kerala and Tamil Nadu have the highest penetration of SHGs among the southern states.
The number of districts served by MFIs increased dramatically in all regions each year. The number of clients served by MFIs increased dramatically as well, with the greatest increase occurring in the Southern and Eastern regions. The SHG-linkage program grew rapidly as well at a rate of 22% from 2009 to 2010.
Productive loans are the most popular product offered by MFIs but a fair number of institutions offer other products as well. Approximately 30% of MFIs offer consumption/emergency loans and 15% offer housing loans. The 15% of MFIs registered as cooperatives, societies, and trusts offer savings products. Nearly 60% of MFIs offer life insurance and 10% of MFIs offer either cattle insurance, health insurance, or accidental insurance. Two MFIs offer remittance products and two MFIs offer pension products.
Outreach in Poorest Districts
The average level of microfinance penetration (among women) in India’s 210 poorest districts is a surprisingly low 1.05%. Data reveals that out of these 210 districts, 80 districts have 0% penetration and another 62 have penetration of less than 1%. The poor districts with the highest penetration levels are located in the south of the country.
Conclusion and Further Research
The Map of Microfinance Distribution in India 2010 has collected MFI and SHG data to analyze penetration over time by region and state, drilling down to the district level. The project providers researchers and practitioner with a snapshot of the operations and outreach efforts of MFIs. In the future, researchers hope to collect data from more MFIs and SHG sources to enhance district and state-level information.
 210 districts of India have been declared poor either by the government of India or by the UNDP during planning and execution of their various development schemes. These districts account for around 34% of the entire population.