AN OVERVIEW OF MICROFINANCE IN INDIA
Dr. Pramod Kumar Srivastava
Microfinance includes microcredit—the provision of small loans to poor clients—as well as savings and checking accounts, microinsurance, and payment systems, among other services. The importance of microfinance in developing economies like India cannot be undermined, where a large segment of the population lives in poverty and lacks access to formal banking services. Microfinance in India began in the 1970s, when the Self-Employed Women's Association (SEWA) started offering small loans to poor women in Gujarat. But it really took off in the 1990s, when the Self-Help Group (SHG)-Bank Linkage Programme was launched by NABARD (National Bank for Agriculture and Rural Development). This program connected small groups of women with banks, allowing them to save money together and take loans as a group. In India, microfinance is primarily dominated by Self Help Groups (SHGs) and bank linkage programs aimed at providing a cost-effective mechanism for delivering financial services to the unbanked poor. This paper aims to identify the current status and role of microfinance in the development of India.
Now a day digital tools are most important and helping to change micro finance scenario in India and world. Important digital tools in use are Mobile Banking & UPI, Paperless Loans, Faster Loan Approvals with AI, Financial Education via Apps, Better Reach to Remote Areas, Secure Transactions etc. Digital tools help a woman in a village can repay her loan from home, a farmer can get a loan approved in minutes, a small shopkeeper can track savings and expenses on a mobile app.
Microfinance loans help meet financial needs and promote self-reliance and entrepreneurship. Eventually, it supports the development of the nation by strengthening the SME sector and reducing unemployment. These loans allow individuals to fulfill their goals without risking their assets or depleting their savings. Female borrowers often receive better interest rates due to their higher responsibility, loyalty, and honesty.
Microfinance includes microcredit—the provision of small loans to poor clients—as well as savings and checking accounts, microinsurance, and payment systems, among other services. The importance of...
