Page 31 - Banking Finance July 2021

ARTICLE

PILLAR OF

FINANCIAL

INCLUSION -

MICROFINANCE

A ccess to conventional banking by all is the agenda In initial stages microfinance has limited coverage like

providing loans to poor entrepreneurs and small business
of government and financial watchdogs and
controller. If the financial network is considered
lacking access to credit. The relationship based banking for
with spider web, the ultimate concern is to
connect the web strings to the services of small business entity individual entrepreneurs and small businesses was one of the
roadways for defining the ambit of microfinance. The other
and poor individuals. Microfinance includes microcredit which path was aggregate based where several entrepreneurs
facilitates small loans to basic elementary clients; savings of come together to apply for loans and other financial services
the surplus money; micro insurance and payment network and as a group entity.
coverage. The target group is usually poor population
segments, socially marginalized , isolated and uplift them for Evolution is the mechanism for a modification with time
making them sufficient enough to proceed with their variable. Microfinance emerged as a spurt and came out
procedural workings and rotate the cycle to earn enough to with a movement having objective to reach poor and
recycle ,service the interest of loan, pay out the installments deprived people and households with an array of quality
and to scoop out the surplus as savings or investments. products and services in financial sector without limitation
to just credit but also savings, insurance, payment services,
fund transfers. The narratives derived from the microfinance
About the author were different from one to another. It was described as a

catalyst to economic development, creating opportunity for
Joy Ghosh the employment creation and enhancing the growth of the
Sr. Manager economy. Some of them were of the opine that microfinance
Staff Training Centre, Bhopal
Union Bank of India is to optimally managing the finances of the poor. Certain
sets of activities classified to be financial in developed

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