Microfinance and Financial Inclusion in India

36 Pages Posted: 17 Jun 2015

See all articles by Rajesh Chakrabarti

Rajesh Chakrabarti

O. P. Jindal Global University

Kaushiki Sanyal

Bharti Institute of Public Policy, ISB

Date Written: May 21, 2015

Abstract

The microfinance industry in India, one of the largest in the world, has played a critical role in India’s financial inclusion. Though its roots can be traced back at least to the 1970s, it has exploded in size and reach since the 1990s, been largely South India based in its distribution and has already witnessed a regulation-induced crisis in 2010. The SHG-bank linkage model and the MFI model have provided two alternative routes in the sector with the latter starting late but showing spectacular growth before getting caught in the crisis. The sector has now rebounded from the crisis mode and new developments including the MUDRA Bank are expected to support the already-strong growth in the sector, one of the fastest in the world.

Keywords: microfinance, Andhra crisis, Ordinance, SHG, NABARD, MUDRA Bank, Reserve Bank of India, debt, overborrowing

Suggested Citation

Chakrabarti, Rajesh and Sanyal, Kaushiki, Microfinance and Financial Inclusion in India (May 21, 2015). Available at SSRN: https://ssrn.com/abstract=2619537 or http://dx.doi.org/10.2139/ssrn.2619537

Rajesh Chakrabarti

O. P. Jindal Global University ( email )

Sonepat Narela road
Sonepat
Sonepat, Haryana 131001
India

Kaushiki Sanyal (Contact Author)

Bharti Institute of Public Policy, ISB ( email )

Sector 81,
Knowledge City
Mohali, Mohali 140306
India

HOME PAGE: http://www.isb.edu/bipp

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