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Abstract
Indian economy is characterized by low rate of growth, dominance of rural population, heavy dependency on agriculture. The last two factors poverty and unemployment create major challenges to the growth and wealth of the country. The newly developed sectors like micro finance are playing a vital role. Microfinance has been considered a powerful tool to fight poverty through the provision of basic financial services including savings, insurance, credit and transfer of funds. The objective of microfinance institutions is to serve poor people and enable them to access credit and fight poverty. It includes loans, savings, credit, insurance services, money transfer and other basic financial services to the economically weaker section of society. To ensure that micro finance products reach remote area and poor. It is considered as an effective tool for eliminating poverty in India. It provides credit and other financial services of small amount to the economically disadvantaged segment of society in urban as well as rural areas. Micro finance institutions include N.G.Os, Credit Unions, N.B.F.Cs. Cooperatives and banks. In India, the future of microfinance is largely depending upon the self-help groups (S.H.G.) in this study. This study is highlighted the current condition of Micro finance in India and its challenges and their solution.