A Study on Role of Cooperative Banks in Micro-Finance with Special Reference to Karnataka

Abstract

Micro-Finance refers to "•small savings, credit and insurance services extended to socially and economically disadvantaged segments of the society, for enabling them to raise their income levels and improve living standards. The concept of Micro-finance was popularized by the Nobel laureate Prof. Mohammad Yunus of Bangladesh in 1976.  He then, started Grameen Bank to promote Micro-Finance in the same year. NABARD offers financial support to its partners to promote Micro-Finance.  It offers training and sensitization of partner agencies, and monitors its performance.  Karnataka State Apex Cooperative Bank exclusively established a separate department dedicated to Micro-Finance in Karnataka through Short Term Cooperative Credit Societies (STCCS). The bank has prepared a detailed road map to this effect.  The vision document in this road map has been accepted by NABARD and Government of Karnataka. This study has been undertaken to understand the Micro-Finance model of the Karnataka State Apex Bank and District Credit Cooperative Bank, the role of Self-Help Groups, credit disbursements and interest rates, the importance of women in the economy, product design and the initiatives of NABARD towards Micro-Finance.