Challenges & Issues of Microfinance in India

Abstract

From the time of independence unemployment and poverty has been two major characteristics and challenges of India. The major cause for the above two has been the unavailability of sufficient credit facilities for the poor and unemployed. These two factors have become the most challenging roadblock in the path of sustainable development of the country. The rapidly opening economy is widening the gap between the rich and poor. To have a sustainable life style along with saving and investment, microfinance allows the poor to get the loan that leads to financial independence and growth. The poor use these loans in a productive manner to create their businesses, assets of their own and get rid of poverty once and for all. Microfinance is becoming a significant buzzword in India. Remarkable progress has been made during the last two decades in innovating techniques to deliver financial services to the poor on a sustainable basis. These loans are aimed at empowering the impoverished people to start their own businesses and to grow their money so that they can achieve long-term financial independence and develop sustainably. Economic growth, sustainable development and poverty alleviation can be achieved effectively with the help of an instrument like Microfinance. This paper will focus the challenges and suggestive measures for growth of microfinance in Indian context for a sustainable development.

Keywords: Microfinance, MFIs, Poverty Alleviation, Sustainable growth.