Reaching the Unreachable Through Microfinance: Challenges Before India (original) (raw)
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Microfinance: Fostering Inclusive Growth in India
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The comprehensive Financial Inclusion plan declared in India by our honourable Prime Minister Shri Narendra Modi has emerged as a major policy objective. The microfinance sector plays a significant role in fostering inclusive growth by offering loans, credit, savings and other basic financial services to borrowers at the bottom of the economic pyramid. Inclusive growth simply means all round growth of the masses. Microfinance and inclusive growth ensure the economic and the financial progress by bridging the gap between the formal financial institutions and the poor sections of the society resulting in balanced and optimal growth. In this paper, author provides an overview of India's microfinance industry, its position and significance in economic development, prevalent models for the microfinance disbursement, potential for growth of microfinance in India, challenges of microfinance in India and the suggestions to overcome these challenges.
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Due to unavailable and improper reach of formal financial services, the rural low income population resort to money lenders for immediate availability of credit as money lenders have been viewed as a tool which provides immediate credit for essential needs. As money lenders give credit immediately, they charge exorbitant prices. This in turn could lead to a debt trap. In this context, Microfinance has emerged as a powerful effective mechanism tool for poverty alleviation, empowerment and financial inclusion in India. The present study is explorative in nature and entirely based on secondary data and it also dwells upon the role of microfinance towards empowering people and to identify the opportunities and challenges associated with the growth of microfinance sector in realising financial inclusion in Indian perspective.
Role of Microfinance in Eradication of Poverty in India – Perspectives & Operations
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In developing economies and particularly in rural areas, many activities that would be classified in the developed world as financial are non-monetized: that is, money is not used to carry them out. This is often the case when people need the services money can provide but do not have dispensable funds required for those services, forcing them to revert to other means of acquiring them. Often money is needed for the purposes; by a chunk of the population like lifecycle needs such as weddings, funerals, childbirth, education, home building, widowhood and old age, personal emergencies such as sickness, injury, unemployment, theft, harassment or disasters such as fires, floods, cyclones and man-made events like war or bulldozing of dwellings, investment opportunities: expanding a business, buying land or equipment, improving housing, securing a job (which often requires paying a large bribe). This paper is divided into two parts, perspectives and operations of Micro Finance. Perspecti...
Microfinance -A Tool for Socio -Economic Development in Rural India
Microfinance stands as one of the most promising and cost effective tools which fight against global poverty. The findings from this study suggests that there is rise in the history and perspectives of rural credit in India in form of microfinance and there is need for improved governance to manage challenges for future so that socioeconomic growth is possible. The present paper discusses conceptual framework, development process, growth of SHG linked microfinance programme, types of micro finance services and developmental role of these institutions in rural India. It also focuses on the status of microfinance and provides some policy framework to meet the challenges faced by Indian microfinance. The article traces that the evolution of the microfinance revolution in India as a powerful tool for socioeconomic development in rural India.
TO SHOWCASE THE EFFECTS OF MICROFINANCE IN ACHIEVING FINANCIAL INCLUSION IN INDIA
The present paper highlights the microfinance and role of microfinance in achieving financial inclusion in Indian Economy. The concept of Micro Finance is not new in India. Traditionally people have saved with and taken small loans from individuals and groups within the context of self help to start businesses or farming ventures. Majority of poor are excluded from financial services. Microfinance is a programme to support the poor rural people to pay its debts and maintain social and economic status in the villages. Microfinance is an important tool for improving the standard of living of poor. In spite of many organizations of microfinance, microfinance is not sufficient in india.The potential of growing microfinance institution in India is very high., as it is supported by government of India to achieve greater financial inclusion and growth in the country?s priority sector. The study explores problems in microfinance sector and suggestions to make microfinance more effective in Indian economy to benefit major section of society and to achieve greater Financial Inclusion with the help of Microfinance Institutions.
Project Dissertation FINANCIAL INCLUSION THROUGH MICROFINANCE IN INDIA
2019
On the very outset of this report, I would like to extend my sincere & heartfelt obligation towards all the personages who have helped me in this endeavor. Without their active guidance, help, cooperation & encouragement, I would not have made headway in the project. This project was a huge learning experience, which helped me understand the dynamics of the microfinance sector. I would like to thank my college mentor, Dr. Archana Singh and Ms. Khushboo Madan for providing valuable insights regarding the project and also for giving me this opportunity to do this research work. I extend my gratitude to Prof. P. K. Suri (HoD, DSM) for giving me this opportunity. I also acknowledge with a deep sense of reverence, my gratitude towards my parents and member of my family, who has always supported me morally as well as economically. At last but not least gratitude goes to all of my friends who directly or indirectly helped me to complete this project report.
India, a country where poverty strikes at its core, an economy that is predominantly agrarian and where a sizeable percentage of the population dwells below the poverty line is in much need of financial resources for the have-nots. This is not merely due to the fact of them being poor, but, more significantly due to the fact that the financial inclusion of all classes into the economic mainstream is a must and has always been the State’s paramount goal. This has to be done in order to ensure that wealth is equitably distributed and the benefits of economic development are enjoyed fully by each and every section of the society. This study analyses the various domains of microfinance, as, it is a key ingredient in ensuring the financial inclusion of the weaker economic classes. It analyses the various models of microfinance prevalent in India and its key emphasis is to identify the key economic and legal problem areas that emerge in the regulation and flow of microfinance. The study primarily bases itself on secondary data and is an effort to analyze the roadblocks and to further suggest corrective strategies and implementation measures for the same. The model primarily focused on is the Self-Help Groups Bank Linkage Programme (hereafter referred to as SHG-BLP). It also imparts focus on the legal situation of microfinance in India, so as to analyze the inherent lacunas and recommend solutions as analyzed during the course of the study. KEYWORDS: Microfinance, financial inclusion, SHG-BLP, legal aspect, economically weaker sections
2018
According to a World Bank, report India accounts for one in three of the world population worldwide. It has most number of the people who live below the international poverty line of $1.90 a day. India’s economic growth has been unsuccessful on making a notable difference on the poverty figures. Poverty deprives a segment of society with bare necessities of food, clothing, shelter, education and health. In a fight against poverty the goal should not be only limited to increasing the income level of individual, household or the group but also mainstreaming the marginalized in the development process of the country. The government of India initiated various programmers to ease the burden of poverty holding healthcare, education, nutrition, and support to vulnerable groups. The microfinance has come forward to fill the gap and is considered as an effective tool for poverty reduction and socio-economic development. The impact of microfinance is still questioned and varies from one count...
Microfinance and development finance in India: research implications
2010
This paper appraises options for research relating to microfinance in India, doing so in the broad context of rival macro pressures to accelerate economic growth, maintain political order, reduce poverty and adapt to climate change. This paper first set out a general well-being regime framework that can be used for this analysis and sketch the role microfinance plays within it. Section 2 uses it to inform a brief historical discussion of the evolution of microfinance in India. Section 3 develops the analysis further by considering possible effects of three external drivers of change: rising political aspirations; climate change and food insecurity; and new information and communication technology (ICT). Section 4 uses these examples to discuss methodological options for policy-relevant empirical research. It also suggests that microfinance is an important arena for exploring empirically the tension inherent in the idea of development management.
Role of microfinance in eradication of poverty in India: An overview
International Journal of Applied Research, 2019
Microfinance is a source of financial support for low income people such as rural poor people, low income clients, small entrepreneurs who have limited money to do business. In this system, people who have difficulty in accessing financial support, microfinance helps them to grow their business by providing financial support. They provide various financial services like loans, deposits, savings accounts, money transfers insurance etc. Micro-finance has received extensive recognition as a method for poverty alleviation in India as well as the developing economy. In India Micro-finance today could be a dynamic space with many of players offering different products and services to the poor and low income people small entrepreneurs like banks, NBFCs, Section 25 companies, different cooperatives and NGOs, MFIs all are approaching rural markets. Microfinance is specially designed for the needy people and a section of the society living in underdeveloped areas who want to stand on their own feet and Microfinance service restored to help them. Sector wise position of bank credit disbursed to SHGs during the last three years as shown by Single Factor ANOVA. This paper is an attempt to know about the role of micro-finance on poverty alleviation in India, models and major challenges faced by microfinance in India. Keywords: Micro-finance, poverty alleviation, NBFCs, NGOs, MFIs