Abstract
The objective of this chapter is to analyze the evolution and transformational journey of microfinance sector in India. Besides, it analyzes the status of financial as well as social inclusion in India, comprising its impact on the socio-economic development of the poor people. With the help of secondary data, the study found that banks account for 40% of the total industry portfolio, which includes both direct and indirect lending through BC (business correspondence) partnerships followed by the NBFC-MFIs (non-banking financial corporation-microfinance institutions) as the second largest provider of microcredit with a loan amount outstanding of Rs. 71,342 crores, accounting for 32% of total microcredit universe. The study has also found that a meaningful financial and social inclusion could be achieved only through a collaborative effort from all the stakeholders involved in the entire process and using good governance practices. With sustainable growth and modest return, the sector, which initially survived just as a “not-for-profit” endeavour, has attracted several large multinational private equity investors over the past decade.
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