A Sustainable Rural India Microfinance Sector- Future Direction And Strategies

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G. RATHNAKAR , G. SURENDAR

Abstract

Microfinance programs have grown significantly in popularity during the last two decades all around the world.
This rapid growth is due to microfinance's effectiveness in delivering financial services, especially loan and savings,
to a large number of impoverished clients in many third-world countries who do not have access to established
financial institutions. Microfinance is one of the most essential financial tools for impoverished people to
undertake household economic and income-generating activities, reducing their vulnerability and allowing them to
amass wealth and hold valued assets as a development tool. In another sense, microfinance entails assisting microentrepreneurs
in growing their enterprises to the point where they are viable and eligible for commercial bank
loans.
When it comes to building savings mobilisation, there are a few key considerations to consider. To begin
with, a solid macroeconomic and financial sector environment must have a suitable legislative, regulatory, and
supervisory structure. Second, solid governance, ownership, and institutional frameworks that can show that the
funds are well-managed. Third, improve financial management capabilities, particularly in the areas of liquidity and
risk management. Fourth, market-oriented items and methods that cater to the needs of low-income customers.
Finally, human resource empowerment will be achieved through a capacity-building program and the development
of a performance-based reward structure.
For the past few years, microfinance has proven to be an effective anti-poverty and development tool. It
is progressing as an industry that will help millions of impoverished people, poor women, micro-entrepreneurs,
peasant farmers, and India's society and economy to leap into the sea of development. As a result, the
government, microfinance/credit institutes, banks, and other connected entities should work tirelessly to establish
financial services for the poor as a viable source of money and profitable business.

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