Wednesday, October 15, 2008

Microfinance in India

Its almost 25 years since Microfinance taken birth in India and the concept started by Professor Mohammad Yunus (Grameen Bank) in Bangladesh. The Microfinance field has since spread with adaptation and evolution of  ideas to various countries and context.With a large portion of the world’s poor, India is likely to have a large potential demand for microfinance. For this reason, It makes sense to consider the changing face of microfinance in India, in order to shed light on comparable changes in the field all over the world. With all the excitement about the prospects of the field to contribute to poverty alleviation and the integration of the world’s poor into the rapidly evolving global market system, the Consultative Group to Assist the Poorestthe Consultative Group to Assist the Poorest (CGAP) estimates that microfinance probably reaches fewer than 5% of its potential clients. 

India is home to a growing and innovative sector microfinance.

Microcredit organization can be a burgeoning field that combines the best in economic strategy with human policy making. Microcredit programs, and other developmental economic initiatives, represent a new way of forging international relations through humanitarian and financially viable aid. It is the branch of microfinance that involves lending small amounts of money to very poor people. The borrowers, often women, use this money to start a business or improve upon an existing one. The money is often used to buy goods that the women can later resell at a profit. These small loans give women the capital they need to create sustainable businesses enabling them to support themselves and their families.

Mirocredit requires specialized financial knowledge as well as a unique combination of skills, such as knowledge of social science, local languages and customs.

I feel microcredit is a very critical part of helping communities grow and achieve sustainability. 

Micorfinance is here to stay as  it is yet to reach millions of poor .  

Photo from: World Bank


Adam said...

This was the second annual event of what is now becoming a large annual gathering to celebrate successes, discuss perspectives and research, and build networks around the microfinance sector in India.



Sudheer Mopperthy said...

yes i also read about that ..thanks for you comments