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Role of Microfinance and SHG in the Development of Rural India and the Associated Women Empowerment


  • RIMR, RTM Nagpur University, India


Micro finance and micro credits are sometimes used interchangeably. However the term micro credit refers to the provision of the small amount of loan whereas the term microfinance has a broader meaning encompassing other financial services in its umbrella such as savings, insurance, etc. along with the provision of credit facilities. Rural India faces a serious problem of poverty. In order to reduce poverty in the rural India, an active participation of the government and non-government organization is required simultaneously on the two fronts, i.e., production and distribution of goods and services. Poverty is generally concentrated in that region where there is a huge problem of literacy and employment. In order to reduce this problem, the fifth five year plan has put an emphasis on employment generation in the rural and urban areas. Hence in order to achieve the goal of employment generation and poverty reduction in the rural area, micro finance has been introduced which provides credit, savings, insurance and other basic financial services within the reach of the common man. Recently, micro credit revolution in the form of self-help group (SHG) movement is gaining momentum among the people in the rural India. This research paper tries to determine various benefits that a rural India has obtained through the formulation of SHG and the impact of Microfinance on the savings, income and the financial positions of the members of the SHG. Paper also focuses on the empowerment of women and the resultant rural development as a result of the benefits from microfinance through SHG.


Microfinance, Self Help Group (SHG), Rural Development, Women Empowerment.

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