Published Paper Details:

Microfinance is an economic activity which deals with disbursement and collection of small-scale investment particularly to unbaked people. Microfinance institutions (MFIs) have demonstrated commendable growth rate in Indian finance sector especially in south regions. Consistent monitoring and emergence of new regulatory bodies like MFIN, the confidence of stakeholders has been enhanced in this sector. Although MFIs sufficiently capitalized for their present operations, the ability to procurement of capital properly still is critical to maintain the growth momentum. Finance is an extraordinary effective tool in spreading economic opportunity and fighting against poverty. Access to finance allows the poor to use their rich talents or open avenues for greater opportunities. Providing sustained credit services is one of the means to increase income and productivity of poor. Though the banking system in India witnessed unprecedented growth and achieved phenomenal outreach, notwithstanding this, empirical studies in the 1980s have revealed that a very large number of poorest of the poor continue to remain outside the reach of formal banking system. It is realized that existing banking policies, procedures and system not have been well suited to meet the credit needs of poor. And, it is in this situation micro finance has come as a solution. However, today it represents a market solution to mitigation of poverty and acts as a development and economic tool in bringing about financial inclusion in India. The institutions that are providing microfinance services such as savings, credit, insurance and remittance services to poor are called Microfinance Institutions (MFIs). MFIs have come up as a bridge between banks and poor, whose only source of credit has so far been the money lender.