Microfinance And Financial Inclusion : Microfinance

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4. Microfinance and Financial Inclusion:

Microfinance programmes are intended to reach poor segments of society as they lack access to formal financial services. It, therefore, holds greater promise to further the agenda of FI as it seeks to reach out to this excluded category of population. India has adopted the Bangladesh’s model in a modified form. The Apex-Bank NABARD started ‘SHG bank linkage programme’ during the last decade of by-gone century, is by far the major programme initiative without parallel in any parts of the world for achieving the FI. The programme has demonstrated across the country its effectiveness in linking banks with excluded category of poor segments of population. In this process role of NGOs in development is quite pronounced in providing the last mile connectivity as enablers and catalyst between the SHGs and Village level co-operatives/banks. This is also supplemented by the MFIs delivering credit. To alleviate poverty and to empower particularly women, the micro-finance has emerged as a powerful instrument to serve the objective of FI in India. With availability of micro-finance, self-help groups and credit management groups have also started in India. More importance is being given to SHGs, since the micro lending to the group rather than individual borrowers is more successful and in the process also making it to reach the goal of FI. All the members of the group are equally benefitted and also the repayment by each member is guaranteed by
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