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32,000 crore – an experiment which has no parallel elsewhere in the world. The average
loan for an SHG member in 2010 -11, stood around INR 4,900 as compared to INR 4,570
in 2009-10. The microfinance model has evolved over the years and is designed to assist
the lower income group to overcome the challenges in the society with respect to
illiteracy, financial assistance etc.

Gujarat has been considered as a huge potential market in terms of microfinance. The
maximum numbers of potential SHGs are found in Panchmahal, Banaskantha and
Sabarkantha. During the Vibrant Gujarat Summit 2011, GLPC had entered into an MOU
with State Level Banker’s Committee for provision of a minimum Cash Credit amount of
INR 50,000 to all the eligible SakhiMandals/SHGs in the State of Gujarat. To implement
this MOU, GLPC, RBI, NABARD and Bankers jointly deliberated and finalized new
guidelines for Credit Linkage of SakhiMandals /SHGs. With this initiative, 1.7 lakh
applications out of the eligible 2.5 lakh SHGs have been sponsored to different Banks. A
total amount of INR 1,100 crore has been sanctioned as cash credit to SakhiMandals/
SHGs in Gujarat. The average amount of sanctioned credit to each SakhiMandal/ SHG
stood approximately INR 75,000. In all cases the groups were provided credit after
incubation period which promotes financial inclusion. Considering this increase of
microfinance into rural settlements, it was considered appropriate to take up study in the
number of districts of Gujarat for agricultural households probing the role and prospect of
micro financing in supporting financial inclusion.

This research was conducted to measure financial inclusion of agriculture households
and bankers initiatives in selected districts like Ahmedabad, Bhavnagar, Amreli,
Porbandar, Sabarkantha and Mehsana of Gujarat state and to find out areas of
improvement in financial inclusion. The main objectives for the study were to understand
the status of financial inclusion, to study the socio-economic factors affecting the level of
financial exclusion/inclusion, to identify factors influencing informal borrowings, to
evaluate the existing demand for credit and analyse the role of microfinance in serving
the credit gap and to know the steps taken by banks for agricultural loan and financial
inclusion; among the agricultural households in Gujarat.
Major source of the study was primary data collected from different respondents across
Gujarat which leads to 511 respondents in all. It was gathered from agriculture families
through pre organized tested schedules and by leading focus group debate and
interviews. To give support to the primary data analysis secondary source was also used.
Secondary data was accumulated from published report like government publication at
the national, state and local level, report of RBI, NABARD, NSSO, CSO and journals and
books. To get clear picture secondary sources were considered. Apart from this data for
supporting the same interviews from 50 bankers were also being taken in the study.

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