1. What is ICICI Bank's innovation?

ICICI bank’s innovation is to convert the poor people into customers and at the same time empowering them.

2. What is special about RBI's pilot project with NABARD in 1991?

It is established by linking a self help group to the micro financing on banks in rural areas.

3. According to Mahajan, why are the transaction costs of savings in formal institutions as high as 10% for the rural poor?

“This was because of the small average size transaction and distance of the branches from the villages”

4. What are some of the problems of MFIs in India?

“Most of the problems with MFIs are due to the fact that their primary focus has been on access to credit. With such small loan (and thus meager interest payments) the key to sustainability becomes scale”

5. What are the two innovative BOP models of the ICICI?

·         “Direct access, bank0led model

·         Indirect channels partnership model”

6. What is the connection between Grameen Bank and Bank of Madura?

From the start, Bank of Madura is having trouble increasing profitability because there were many issues in the poor society that prevented it to become profitable. Then the executive of Bank of Madura started using Grameen Bank because it was a success in Bangladesh.

7. Describe ICICI's three-tier system. Discuss why it is three-tiered.

It is a hierarchal based system wherein the project manager is on top. Followed by the Coordinator, and lastly, by the promoter. The project managers are those in charge of the bank. The coordinators are SGH people that coordinate and serve as a bridge between the other two tiers. And lastly the promoters are those who are doing field work.

8. What are the 3 essential steps in the SHG process? Comment on why each step is necessary.

·         “Learn to save

·         Learn to lend what you have saved

·         Learn to borrow responsibly.”

In order to make the money circulate you must first have to own your own money, and then from that point onwards, it is a matter of give and take.

9. Discuss the NABARD checklist for SHG's. Comment on why each item on the checklist is necessary.

·         “Is the group size between 15 and 20 members?”

o   It needs to be 15-20in numbers so that they can easily pay any debt they made.

·         “Are all members considered very poor?”

o   They have to consider the status of every members to somehow make generalization on whether they can pay up or not.

·         “Was there a fixed amount of savings collected each month?”

o   There should be a fixed amount of savings collected each month so that things will be coordinated and not in a one lump some of money giving.

·         “Is there more than 20% literacy?”

o   There should be someone in the group who knows how to read/write. He/she will be the one coordinating with the bigger group.

·         “Have they used their savings for internal lending purposes?”

o   The ICICI bank should know where the money is going.

·         “Have the members kept a high level of attendance?”

o   All members should be active.

10. What is the impact of microlending in a household according to a NABARD study?

“The NABARD research concluded that SHG participation had significant impact on various aspects of confidence, communication, and decision making. One of the most important objectives for the SHG program is to improve the assertiveness of the SHG members, which NABARD measured in a survey published in their series on microfinance.”

11. Discuss the possible implementation of a smart-card based payment system? Would it work? Why?

Because of the implementation of microfinance and the emerging other technologies such as smart cards, it is possible now to implement the smart-card payment based system. But I don’t know if it’d work. If majority of people in India don’t know how to read, they won’t be able to these kiosk system properly.

12. Discuss the quote: "Banking with the poor has undergone a paradigm shift. It is no longer viewed as a mere social obligation. It is financially viable as well". Do you think this quote can be applied in the Philippines? Discuss.

No. if we’re talking about the poor people here in the Philippines, this won’t be applicable. Poor people here don’t invest their money at a bank. They live in an environment wherein what they earn today will be lost today as well.