Micro Finance As A Tool For Financial Inclusion & Reduction Of Poverty

Abstract

Microfinance has assumed immense importance throughout the world in view of its efficacy in credit dispensation, loan repayment and reduction of poverty. The experience world over has proved that hassle free and repetitive dose of credit is the basic need of the poor which has become the hallmark of microfinance. Several countries like Bangladesh, Indonesia, Philippines, Kenya and Bolivia have implemented microfinance programmes with encouraging results. In the Indian context, the microfinance sector has witnessed an unprecedented growth in the last few years, and has firmly established itself as significant potential contributor in the government’s agenda of “Financial Inclusion”. Financial services for the poor have proved to be a powerful instrument for poverty reduction that enables the poor to build assets, increase incomes, and reduce their vulnerability to economic stress. Microfinance aims at providing broad range of financial services such as deposits, Loans, payment services, money transfers, insurance to poor and low-income households and their micro enterprises. The paper highlights the roadblocks of micro finance in India. It looks into the attempts of selected organisations in the field of micro finance in India. The paper presents a glance into the government’s efforts in the field of micro finance. Micro finance serves as an umbrella term that describes the provision of banking services by poverty focused financial institutions (micro finance institutions) to poor parts of the population that are not being served by mainstream financial services providers.

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Cite this paper

@inproceedings{Padhy2012MicroFA, title={Micro Finance As A Tool For Financial Inclusion & Reduction Of Poverty}, author={Prabir Chandra Padhy and Subrata Chattopadhyay and Saumya Singh and Mousumi Majumdar}, year={2012} }