The Microfinance Industry

1. Introduction

Microfinance industry as we know it today is changing the lives of people who depend on it for various financial services not only in India but globally as well. Whether it is a small size or a marginal loan amount, or a savings account, crop loan, or for fulfilling social events of life such as birth or death ceremonies, marriages and likewise. Schumpeterian has defined microfinance service provider as an entrepreneur, in a sense that the form of business he is involved is a social but innovative in nature. The fact is that by venturing into such a business he is not only running the business, but also solving a social problem, and creating new relationships using innovative business models which involves ground level actions

The paper is structured in forms of sections, such as literature review, which relates more towards the need hierarchy theory of motivation as defined by Maslow (1943). The contextual correlation of this theory is significant in serving the microfinance sector customers as their needs and aspirations keep on changing from time to time. The section covers in detail about the connections of this theory and its applicability in the microfinance industry, in particular at the MFIs level. Followed by it is the method of study, which is analytical and based on the information obtained from the secondary data sources such as scholarly articles, periodical, working papers, report publications, as well as recent studies conducted by the researchers in India and abroad. The rest of the sections such as discussion and policy implications, followed by conclusion and future research, talks more about the ICT interventions for efficient delivery of financial services for the microfinance industry and in particular, the

(2012, 2014)111213 has emphasized on the Maslow’s Need theory in his published research papers. In this context, he has pointed the fact, such that a purchasing power of a consumer changes with the change in income and standard of living over a period of time. This has a direct impact on the demand for financial services which he requires for consumption and growth. According to his opinion, this change phenomenon as defined by the Motivation theory, requires IT interventions, in the form of more analytical, robust and IT based system, which he calls as, “Microfinance Information Processing Centers” (MIPCs) 13 , as one solution for dealing with the change aspect of the microfinance