Financial Inclusion and Micro Finance in India

Abstract

Access to finance by the poor and vulnerable groups is a prerequisite for poverty reduction and social cohesion. This has to become an integral part of our efforts to promote inclusive growth. In fact, providing access to finance is a form of empowerment of the vulnerable groups. Financial inclusion denotes delivery of financial services at an affordable cost to the vast sections of the disadvantaged and low-income groups. The various financial services include credit, savings, insurance and payments and remittance facilities. The objective of financial inclusion is to extend the scope of activities of the organized financial system to include within its ambit people with low incomes. Through graduated credit, the attempt must be to lift the poor from one level to another so that they come out of poverty. Micro financing programmes are intended to reach poor segments of the society for their empowerment Financial inclusion through SHG based micro financing has emerged as one of the important instrument for empowerment of urban poor and expansion of the banking outreach. Against this view point, present paper purports to review the status of financial inclusion and micro finance in India.