The Microfinance Review

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Model Transition from Microfinance to Financial Inclusion - Current Scene and the Path Ahead


Affiliations
1 ITS, Ghaziabad, India
     

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This paper attempts to present a comprehensive review of the current scenario of microfinance in India. The paper analyses the challenges encountered by Indian banks and non-formal financial institutions in making available f­inancial services and products. The performance of microfinance institutions (MFIs), with their innovation and smoother distribution channel, has outperformed banking institutions in financial inclusion. Both skill and credit enhancement of the economically disadvantaged is of significance where again, MFIs offer immense scope. There is a growing recognition that the poor need and use financial services beyond credit to expand their choices and manage their financial lives and that financial inclusion ventures ought to incorporate job generation aspect as well. The paper suggests that tapping the potential available with technology can go a long way in sustaining the tempo of our financial inclusion agenda. Finally it is reiterated that only when financial inclusion is treated as a sustainable and profitable business activity, our goal of universal financial inclusion can be accomplished.

Keywords

Financial Inclusion, Microfinance Institutions.
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  • Model Transition from Microfinance to Financial Inclusion - Current Scene and the Path Ahead

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Authors

Rajeev Johari
ITS, Ghaziabad, India

Abstract


This paper attempts to present a comprehensive review of the current scenario of microfinance in India. The paper analyses the challenges encountered by Indian banks and non-formal financial institutions in making available f­inancial services and products. The performance of microfinance institutions (MFIs), with their innovation and smoother distribution channel, has outperformed banking institutions in financial inclusion. Both skill and credit enhancement of the economically disadvantaged is of significance where again, MFIs offer immense scope. There is a growing recognition that the poor need and use financial services beyond credit to expand their choices and manage their financial lives and that financial inclusion ventures ought to incorporate job generation aspect as well. The paper suggests that tapping the potential available with technology can go a long way in sustaining the tempo of our financial inclusion agenda. Finally it is reiterated that only when financial inclusion is treated as a sustainable and profitable business activity, our goal of universal financial inclusion can be accomplished.

Keywords


Financial Inclusion, Microfinance Institutions.

References