Pillar Of Financial Inclusion Microfinance

Access to conventional banking by all is the agenda of government and financial watchdogs and controller.

- Joy Ghosh

If the financial network is considered with spider web, the ultimate concern is to connect the web strings to the services of small business entity and poor individuals. Microfinance includes microcredit which facilitates small loans to basic elementary clients; savings of the surplus money; micro insurance and payment network and coverage. The target group is usually poor population segments, socially marginalized , isolated and uplift them for making them sufficient enough to proceed with their procedural workings and rotate the cycle to earn enough to recycle ,service the interest of loan, pay out the installments and to scoop out the surplus as savings or investments.

In initial stages microfinance has limited coverage like providing loans to poor entrepreneurs and small business lacking access to credit. The relationship based banking for individual entrepreneurs and small businesses was one of the roadways for defining the ambit of microfinance. The other path was aggregate based where several entrepreneurs come together to apply for loans and other financial services as a group entity.