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Hitesh Jhanji, Lovely Professional University Unit 17: Role of Microfinance in Rural India

Unit 17: Role of Microfinance in Rural India Notes

CONTENTS
Objectives
Introduction

17.1 Legal and Regulatory Framework for the Microfinance Institutions in India
17.2 A Profile of Rural India

17.3 Rural India and Microfinance
17.4 Success Factors of Microfinance in Rural India
17.5 Marketing of Microfinance Products

17.6 Apni Mandi
17.7 Summary

17.8 Keywords
17.9 Review Questions
17.10 Further Readings

Objectives

After studying this unit, you will be able to:

 Analyze the growth of microfinance sector developed in India and see potential for the
microfinance institutions, NGOs, SHGs in the market.

 Analyze the structure and pattern of microfinance programme in rural Indian by the MFIs,
NBFCs.
 Understand the marketing of microfinance products in rural market.

 Study the importance and role of microfinance in poverty alleviation and profitable
agriculture activities.

Introduction

Microfinance economically disadvantaged segments of society, for enabling them to raise
their income levels largest in term of population after China. India’s GDP ranks among the
top 15 economies of the world. However, around 300 million people or about 80 million
households are living below the poverty line, i.e. less than $2 per day according to the
World Bank and the poorest are which earns $1 per day. It is further estimated that of these
households, only about 20% have access to credit from the formal sector. Out of these 80
million house hold, 80% takes credit from the informal sources i.e. local Zamindars, Chit
Funds etc. With about 80 million households below MFIs include non-governmental
organizations (NGOs), credit unions, non-bank financial intermediaries, and even a few
commercial banks.

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