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Source: Outlook Business (India).

Source: VC Circle 

Sahara Mutual Fund (SMF), an asset management company, has lodged a draft offer document with the Securities and Exchange Board of India (SEBI) to create the Sahara Daily Fund (SDF). The SDF will be a daily systematic investment plan (SIP) where people can invest with a minimum of 10 Indian Rupees (Rs.) (USD 0.20). The SDF is aimed at providing daily wage earners with a microfinance saving scheme. Units are purchased and can be traded on any business day. There will be a dividend option (payout or reinvestment) and a growth option. Dividends will be distributed, subject to profits being available, based on the units held by the account holder.

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), established by the government of India and the Small Industries Development Bank of India (SIDBI) intends to provide credit guarantee support to 57,500 MSEs in 2009. In 2008, CGTMSE approved about 53,700 MSEs for guarantee support, but ultimately, only 43,555 were covered. This year, CGTMSE has raised USD 451.5 million for guarantee payment to MSEs. In 2008, CGTMSE had raised USD 441.3 million, but was only able to guarantee loans worth USD 343.8 million for undisclosed reasons. CGTMSE is a fund that gives guarantee payments to lending institutions so that microentrepreneurs may obtain collateral-free loans. If a borrower defaults on a loan, CGTMSE compensates the lender up to 75, 80, or 85 percent of the loan depending on the loan amount and the profile of the borrower. The CEO of CGTMSE, OS Vinod, has stated in an interview, “What we are trying to tell the banks is — you don’t appraise the collateral but the project. If the project is good, then the second issue of collateral comes in and we will step in. So, banks have to move from collateral-based lending to project-based lending, which was not happening.” CGTMSE does not directly interact with borrowers and lenders must approve loans before seeking a guarantee from CGTMSE. The Indian government’s Ministry of Micro, Small & Medium Enterprises (MSME) created the Credit Guarantee Scheme (CGS) to improve credit access for MSEs. Together with SIDBI, the government instituted CGTMSE to implement this scheme.

Written by Nobuhiko Fuwa, Seiro Ito, Kensuke Kubo, Takashi Kurosaki, and Yasuyuki Sawada, and released January 2009 as Discussion Paper No. 183 by the Institute for Developing Economies (IDE), 23 pages, full text available at: http://www.microfinancegateway.org/files/56716_file_ARRIDE_Discussion_No.183_kubo.pdf

In “How Does Credit Access Affect Children’s Time Allocation? Evidence From Rural India”, the authors seek to quantitatively analyze the effect of credit access on the amount of time allocated by children to leisure, work, and school. This preliminary discussion paper was published by the Institute of Developing Economies (IDE), a semigovernmental research organization that merged with the Japanese External Trade Organization in 1998. This study was conducted in the Kurnool district of Andhra Pradesh, where the child labor rate is unusually high at 54.2 percent.

The India Financial Inclusion Fund (IFIF), an off-shore equity fund, has raised USD 20 million in capital, taking its total fund size to USD 58 million. IFIF focuses on equity investments in Indian companies that are “directly or indirectly associated with bringing about the inclusion of the poor within the formal financial system.”