Role of Microfinance in Eradication of Poverty in India: An Overview (2024)

See all articles by Pawan Kumar Bhura

Pawan Kumar Bhura

Shyam Lal College Evening, University of Delhi

Dr. Ashutosh Jha

Swami Shraddhanand College, University of Delhi

Abstract

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.