Indian SHG Microfinance Experience - Endeavors and Challenges

Abstract

Microfinance in India presently is too small to create a great impact in poverty alleviation, but if provide new technologies with skills and opportunities for the development of the poor, it holds to change the socio economic face of the India's poor. The self-help group (SHG) model with bank lending to groups without collateral has become an established part of rural finance. SHG-based microfinance look after and supported by NGOs, have become an significant alternative to traditional lending in terms of reaching the poor without increase in operating and monitoring costs. The government and financial institution have accepted this and have highlighted the SHG model and take initiatives to work along with NGOs. Million of SHGs have been linked to banks over the years but still most of the states are not doing well to established the development process of the poor and also do not link up and nurtured the various schemes of the Govt. The paper also discuss the why rural poor easily get the loan from the private players and not with the rural banks