Need for Microfinance in Rural India

SHG Promotes Rural Development Report Figure X Microfinance Needs - Source: Microscope As of November 2012, March 31, 2012, the total number of users of microfinance institution network map X1 was 22.26 million people. (Table 9) Due to the nationwide performance data of SHG and MFI, the physical and financial situation of microfinance institutions in the southern states of the country has made great progress and growth. On the other hand, the progress of the northern state is relatively slow. For example, southern states like Tamil Nadu can be used as benchmarks, so states like Uttar Pradesh can explain the need for success.

Microfinance will be paid to women in the village of India. But in India, more than 50% of the population live in rural areas. The majority of the population belongs to the country's lowest income group. This does not mean most of them are poor, but people do not earn a lot of money, they do not use much money because everything from agricultural products to real estate is much cheaper in rural areas. The microfinance institution provided loans to this low income group through the framework of Grameen Bank, which was pioneered by Mr. Yunus. This framework uses loan loops and peer group loans and increases loan recovery by providing most loans to mothers. Microfinance institutions often receive funds from banks. Their profit margins are higher than those of low-income households.

Entrepreneur Sharone Perlstein, a supporter of microfinance, explained that microfinance helps low-income individuals become successful business owners. Although the amount of loans that microfinance can provide to customers in rural areas is less than the amount offered to urban residents, the impact of these loan amounts is comparable. Although microfinance loans may be relatively small, they are designed to adequately meet the financial needs of potential borrowers in a particular group. Most potential borrowers who usually live in rural areas can not access traditional financial services. This is because they are actually far from traditional financial services providers and they do not usually meet or meet the requirements of financial services companies easily. Microfinance meets this demand, and with the help of technology micro-finance services are getting better and more accessible.

Rural entrepreneurs' microfinance institutions are micro-finance institutions that provide basic financial services to people of low-income brackets and poor people. The emergence of microfinance institutions stems from the fact that most financial institutions offer far fewer financial services than low-income people. Microfinance institutions are designed to fill this gap and are designed to fill the gap left by leading banks.