GROWTH OF MICRO FINANCIAL INSTITUTES IN CHHATISGARH STATE

Abstract

The term micro finance refers to the benefit of financial services, which are provided to low income group, including individuals as well as self-employed people. It is a practice of providing funds for permanent access to such groups who may utilise it for further generation of income. It includes facilities like savings, insurance and transfer of funds over a period of time. Microfinance has been working as one of the driving forces for extension of financial services in remote areas. It could be recognised to help low income groups by providing low cost finance without any bulky documentation. In India, the national bank for agriculture and rural development, NABARD, has been providing finance to nearly 500 banks that extend funds to the self-help groups. The concept of microfinance and microcredit are meant for providing small loans to low income groups, so as to start a micro enterprise and contribute to poverty alleviation. The focus of microfinance is towards economic security and income protection to the people. On the other hand, micro credit only aims at economic promotion. So, the area of microfinance is wider than micro credit. The emphasis of microfinance is also on empowerment of women, so as there could be a change in their social status. There are various microfinance projects that extend their service to non-profit organisations or women self-help groups.