Micro Finance and Rural Development : A critical Review
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Introduction KANAK KANTI BAGCHI Micro-finance is a buzzword nowadays. It has attracted the attention of researchers since couple of years. Microcredit used by Self-Help Groups SHGs has empowered its numerous members in India and throughout the world socially, politically and economically. Especially, it has been a boon to the women members. Although microfinance is not a panacea for the empowerment of its members residing in rural areas, still it has been able to bring about a lot of positive changes. The twenty-three papers included in this volume have been divided into two parts. In Part I altogether thirteen papers have been included which have delineated the general and conceptual issues of micro-finance. Part II comprises of ten papers which deal with case studies made by scholars in different states of India. The common tenor of the papers included in this volume is that while in some cases micro-credit programmes have indeed been able to achieve what they had primarily set out to do, namely, increasing the capabilities of the poor women, there still exist many imperfections in the implementation procedures which prevent the achievement of desired or better result.
Micro-Finance and Rural Development
In what follows we have summarized the findings of each of the paper. This will facilitate the reader, if s he likes to instantly get an idea of the essence of each of the paper contained in the volume within a short while. Dhar s paper infers that the enthusiasm about the rapid expansion of the microfinance sector is justified. But according to him care needs to be taken about the rapid commercialisation of this sector. High transaction costs and high lending interest rates need to be balanced, loan portfolios need to be frequently and prudently monitored, and sustainability of client groups and delinquency problems need to be addressed. Moreover, the guardians of the economy should keep a watch that fly-by-night MFI operators do not take the opportunity to spread their wings in the booming sector. Without the support of a good regulatory system for monitoring the sector and an educational system for delivering microfinance professionals, the microfinance boom may not sustain. Palharya s paper has given a brief macro review of Indian economy followed by concept of inclusive growth, micro finance, and role of NABARD in the development of SHGs in order to make a dent on poverty. The study has not made a presentation of a comprehensive strategy of inclusive growth. It is limited in scope to the discussion of role of micro finance in inclusive growth. Shortcomings of the strategy of micro finance and suggestions have