Kochi: A memorandum of understanding (MoU) was signed between the Bank of Baroda (BoB) and Centre for micro Finance (CmF) for promoting and strengthening of the micro-finance activities of the bank.

Micro-finance is an upcoming area in India, and has got a lot of attention in the recent past with the influx of new generation Micro Finance Institutions (MFIs) and commercial banks coming together to provide the much needed help to small time entrepreneurs and self help groups. CmF is one such institution registered under the Societies Registration Act.

CmF’s by its research acts as a catalyst in analyzing and implementing the following issues:

• Impact of access to financial services
• Contracts and product designs
• Constraints to household productivity
• Combination of micro finance and other development interventions
• Cost and profitability of micro finance institutions (MFIs)
• People’s behavior with respect to financial services
• Economics of micro-enterprises

Comprising of two complementary units, the Research Unit (RU) and the MFIs Strategy Unit (MSU), CmF ensures that the results of its research activities are implemented properly on the ground.

On the other hand, Bank of Baroda is the fifth largest bank in India. With total assets exceeding Rs. 1.78 lakh crores, and a wide network of over 2800 branches and offices, and more than 1000 ATMs, BoB is also committed to improving the lives of the less affluent and deprived section of the society.

This tie up will witness CmF helping the bank achieve 100 percent financial inclusion in select districts. CmF will also organize training programs tailored to local populace to upgrade the skills of bank's field representatives. Formation and nurturing of quality self-help groups will be a special emphasis area of the tie up.

Indian Bank, another banking giant had yesterday announced the expansion of its micro-credit branches in four other areas. Looks like micro finance is fast becoming a priority area for banks in India. After the successful implementation of the model in Bangladesh by the Grameen Bank, Indian counterparts are busy doing the catch up act.