Micro Finance as a Tool for Financial Inclusion & Reduction of Poverty

Micro Finance is an innovative concept which makes alternative techniques to promote the banking habits of the rural people because, India is considered as largest rural people consist in the world. Micro finance Services aims at Improving Financial and Social Condition enhancing the Standard of living improving Consumption Level and Achieving a level of Prosperity by which they can able to fulfil their needs Satisfactorily. Several countries like Bangladesh, Indonesia, Philippines, Kenya and Bolivia have implemented microfinance programmes with encouraging results. It can be said as India is one of the largest and fastest growing economies of the world, but what has been the most disturbing fact about its growth has not only been uneven but also discrete. However; there are still large sections of the world population that are excluded from financial services market. Micro Finance is aimed at providing banking and financial services to all people in a fair, transparent and equitable manner at affordable cost. Households with low income often lack access to bank account and have to spend time and money for multiple visits to avail the banking services, be it opening a savings bank account or availing a loan, these families find it more difficult to save and to plan financially for the future. This paper is an attempt to discuss the overview of micro finance as a tool financial inclusion in India. In this study both secondary and primary data via self-administered questionnaires and interviews were used. The paper highlights the effectiveness of micro finance facilities in reducing poverty and also analyzes the impact of Micro finance facilities on economic and social level. The study mainly focuses on the impact of micro finance in providing access to various facilities to poor, pre and post periods of availing micro finance facilities.