Journal Press India^®

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According to a report by Reserve Bank of India, around 51% population possess 10% assets owned by Indians. In India around 70% population thrives in rural area, from which 60% is dependent upon agriculture (World Bank report). Microfinance plays a major role in providing financial services to the people with very low income. Microfinance has been described by NABARD as “the provision of thrift, saving, credit and financial services and products of very small amount to the poor’s in rural, semi urban and urban areas for enabling them to raise their income level and improve their standard of living”. Micro finance focuses on the poor people in developing countries for financial and non-financial facilities. It takes into consideration microcredit, savings, insurance, and other non-financial services. Microfinance services helps in the reduction of poverty in developing countries and help to enhance the standard of living of poor. There are two models that identify the microfinance sector in India: Self Help Group Bank linkage program (SHG-BLP) and Micro Finance Institution (MFIs). The aim of microfinance is distributing financial services to the maximum number of poor. The aim of this paper is to investigate the role of microfinance and its current status in the economic growth of India.

Keywords

NABARD; Micofinance; Self Help Groups; MFIs; Financial services

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