FINANCIAL INCLUSION THROUGH MICROFINANCE IN INDIA

Abstract

In the ongoing scenario, merely owning a bank account may not be a good indicator to judge financial inclusion. Thus, a concept named microfinance has been gaining importance to achieve the comprehensive objective of financial inclusion. Today, both international and Indian banks are having partnerships with MFIs in order to maximize their returns and also benefit from the relatively low default rate. Moreover, government is also in the process of using the tool of MFI/SHG-BLP for financial inclusion. Keeping this in view, the present study comprehends the role of microfinance in financial inclusion and go through the outreach and present regulatory framework of the microfinance institutions in India. This study have been divided into four major parts, which are:  The study of the various phases the microfinance sector of India experienced over the past decade and what are the characteristics of those phases. The AP crisis, which studies the major reasons behind it as well as the extent of impact it had on tmicrofinance sector of India. Jan Dhan Yojana, its objectives and its milestones that it achieved in the past one and a half years since its launch.The current outreach of microfinance in India, how successful it is in achieving full financial inclusion of the population of India and also the various challenges faced by the sector.