Published Paper Details:

The process of economic development is crucially dependent upon the availability of timely and cost-effective credit for production purposes. It is observed that in developing countries, lack of credit is the main cause of untapped entrepreneurial skills and low levels of income and standards of living. It has been a long-held view that the rural masses are unbankable customers and hence the formal credit providing institutions like the commercial banks were not ready to lend these customers, numerous in number, but insignificant in the amounts they deal with. It is generally held that the transaction costs of these accounts would be far greater than the business that can be generated. Thus, many of the poor families in rural, semi-urban, and urban areas were forced to depended on the informal sector for their credit needs, both for production and consumption purposes. This entailed higher interest rates, stringent repayment conditions, which often resulted in the loss of assets when the borrowers failed to make the repayments. In section II of the paper, we explain the genesis of the microfinance institutions, and important milestones in their development in India during 2010 and 2022. Section III discusses the SHG-Bank Linkage Programme initiated to strengthen the microfinance movement in India. Section IV explains the regional dimensions of this programme and the lacune therein. Section V explains the development of SHG-Bank Linkage programme in the state of Andhra Pradesh. Section VI concludes.