Microfinance and Financial Inclusion in India
36 Pages Posted: 17 Jun 2015
Date Written: May 21, 2015
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
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