Volume : 2, Issue : 7, July - 2013

Financial Inclusion: A Study on Opportunities and Challenges of Microfinance

Prof. V. Narasimha Rao, Dr. M. Venkateswara Rao

Abstract :

Financial Inclusion has been well recognized as the effective tool for ensuring equitable economic growth especially among the rural poor. Microfinance Institutions are expected to play a significant role in social upliftment and poverty alleviation. Microfinance is the fastest growing non–institutional channel for financial inclusion in developing economies. The initiatives of NABARD and RBI made India a home to the extensive microfinance programmes in the world, there is yet to have a substantial impact on outreach to the excluded population. The objective of maximizing financial inclusion is constrained by number of socio, economic and administrative factors. The formal banking system in India is still struggling to balance the dual objectives of outreach and financial performance. In this process an important issue is the ability of Microfinance Institutions to raise finance. An attempt is made in this research paper to examine the opportunities and challenges in Indian microfinance sector.