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Microfinance in India: Empowering Communities and Driving Inclusion
SURENDER SINGH
Abstract:
Microfinance has emerged as a critical tool for promoting financial inclusion and alleviating poverty in India. This paper provides a comprehensive review of the evolution, impact, and challenges of microfinance, focusing on the SHG-Bank Linkage Program pioneered by NABARD. Using a qualitative research approach based on secondary data, the study synthesizes insights from academic and institutional sources to analyze the socio-economic impacts of microfinance initiatives. Key findings highlight the transformative role of microfinance in empowering women, enhancing household incomes, and fostering local economic development. However, the study also identifies significant challenges, such as high operational costs, regional disparities, and over-indebtedness among borrowers. The discussion underscores the need for technological integration, financial literacy programs, and policy reforms to maximize the potential of microfinance in India. This paper concludes with recommendations for future research and actionable strategies to address the sector’s limitations, ensuring a more inclusive and sustainable financial ecosystem.