An Analysis of Role of Microfinance Institutions in Inclusive Growth

Abstract

The significant outcome of micro finance institutions is an affordable and accessible financial credit services to the rural parts of India. Poor sections of our population need assistance rather than subsidies and now there is paradigm shift from subsidies to access of credit. Micro finance can also play a vital role in women developments who are now leading the economy through micro finance credit with the help of good decision making. But there is still a big challenge since independence that in most of the rural parts of India credit is providing by moneylenders at very high interest rates, but this is a work of financial institution. There is a big gap between haves and haves not people due to unequal income distributions of the people and they are financially excluded. So, micro finance institutions bridge the gap between two gaps. The paper discusses the role of micro finance in inclusive growth, through various financial programmes of state and challenges faced by micro finance in providing access of credit.