The Role Micro Finance and Digitization in Financial Inclusion

Micro Financial Institutions play a significant role in financial inclusion. Hitherto thecommercial banks completely ignored the large section of the population in country and were not able to reach the poor; in such circumstance MFIs entered the uncovered areas. Nationalization of commercial banks in India compelled the banks to open their doors to deprived population. Inclusion percentage was not even 30%. Commercial banks were still working under caliber. Banks were under the assumption that, banking is only for the educated or for the mainstream of the society. Conventional banking created a negative atmosphere among a large section of the population about formal banking. Micro finance becomes an effective tool for reaching the unreached. Informal or unconventional methods are followed to tap the target groups. MFIs are simple and by far the easiest way to reach the Indian poor. This paper tries to discuss the micro finance and its role in financial inclusion. This paper attempts to analyse branch networking, gross portfolio management and regional, geographical and rural - urban divide client outreach and status of digital support for financial inclusion in India.