Micro Finance Case Study

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1.1 Introduction

Development of a nation does not mean only to the development of infrastructure, innovations and technology but in fact it is related to the development of each and every citizen in context with their standard of living. It is necessary to ensure that the benefits of growth accrue to all sections of the society. A nation will move on the path of development when the common people are involved in the development course and have a good quality life by accessing the basic amenities such as food, cloth, house, health, education, employment and good social natural and environment.

India has undergone a paradigm shift over the past six decades-politically, economically, socially, technologically as well as demographically, but
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Still there was a need of such a programme which must be flexible and collateral free to fulfil the credit requirements and other needs of underprivileged classes and women. So, as per the need of time, a new concept of financing to the poor known as microfinance, emerged and became increasingly important mainly due to free from collateral and their better access to local knowledge and information at community level and their use of peer group monitoring. According to the accepted definition, micro finance is the provision of thrift, credit and other financial services and products of very small amounts mainly to the poor in rural, semi-urban and urban areas for enabling them to raise their income level and improve living standards. (NABARD, 1999)

Emergence of Microfinance in
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(2005)[11], Todd (2001)[12], Chen and Donald (2001)[13] and Hossain (1988)[14] in their study found that microfinance programme has impact in reducing poverty and income inequality. Borbora & Mahanta (2008)[15], Sarangi (2007)[16], World Bank (1999)[17] and Khandker et al. (1998)[18] assessed in their studies that the participants of the microfinance programme are engaged in productive activities. They shifted from wage-employment to self-employment and other income activities. Many studies like Misra (2006)[19] Singh (2001)[20], MYRADA (2002)[21], Raghavendra (2001)[22] and Banu et al. (2001)[23] conclude that group loans have reduced the dependence on money-lenders and the beneficiaries are able to cope up financial crisis through their savings and loans. Sharma (2007)[24], Tracey et al.(2006)[25], Puhazhendi and Badatya (2002)[26], Manimekalai and Rajeswari (2001)[27], Yunus & Jolis (1998)[28] found in their studies that the participation in the programme has led to raise the condition of in terms of increase in self-confidence, knowledge, mobility, development of organisational skills and socio-economic and political awareness etc. The study done by Littlefield et al. (2003)[29] revealed that microfinance programme is helpful in achieving millennium development goals through empowering women and by reducing poverty, hunger, infectious diseases

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