The Role Of Microfinance In Poverty Reproduction
A STUDY OF ROLE OF MICROFINANCE IN POVERTY REDUCTION
PROF. (DR.) RAJESH K. YADAV1,Ms.MEETA RAGHUVANSHI2
1Professor & Director, School of Management, JagranLakecity University, Bhopal (M.P.)
2Research Scholar, Faculty of Management, Barkatullah University, Bhopal (M.P.)
Email -: drrajeshkyadav@jlu.edu.in, raghuvansh_meet@yahoo.co.in 1. ABSTRACT
In an India where 70 per cent of its population exists in rural area and 60 per cent depend on agriculture (according to the World Bank reports), micro-finance can play a very important role in providing financial services to the poor and low income individuals. The present paper highlights the microfinance & evaluates the position of micro-finance. The concept of microfinance is not new
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This include the ‘susus’ of Ghana, ‘chit funds’ in India, ‘tandas’ in Mexico, ‘arisan’ in Indonesia, ‘cheetu’ in Sri Lanka, ‘tontines’ in West Africa and ‘pasanaku’ in Bolivia. In 1700s, the Irish author Jonathan Swift initiated the earliest form of modern MFIs—the Irish loan fund system. The Irish loan fund system was designed to provide small uncollateralized loans to rural poor. In 1800, various other formal institutions began to emerge in Europe in the forms of people’s banks, credit unions and savings and credit co-operatives. Of these, the credit unions developed by Friedrich Wilhelm Raiffeisen gained wide acclaim in Europe and other North American States, in relieving the rural poor from the clutches of usurious moneylenders. In 1895 people’s banks became popular in Indonesia, and in 1900 the idea spread to Latin …show more content…
Banks began to access this market in a more significant way than ever before. Financial services ranging from savings deposits, loans, insurance to cover life, health, crop, and properties are currently offered. Many microfinance institutions access capital markets either by issuing equity or debt capital in order to raise capital. There are others who have been able to securitize their loans and thus attract capital by issuing micro-credit backed securities. Technological innovations have also paced the evolution of microfinance: widespread availability of mobile phones, access to community-level kiosks of computer terminals with access to the Internet, biometric technology to obtain loan approval and credit history, and correspondent banking have dramatically changed the landscape of microfinance. The year 2005 was declared as the “Year of Microfinance,” and a number of private sector enterprises and foundations have now dedicated pools of capital for exclusive investments in the area of microfinance: in November 2005, Pierre Omidyar (founder of eBay) announced a $100 million microfinance fund in partnership with Tufts University for exclusive investments
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