MICRO-FINANCE: IS IT A MYTH OR REALITY?

Abstract

Micro-finance is the promising alternative that offered funds at the doorstep of the poor. There has been a lot of debate on the nature, concept, regulations and practices of micro-finance in India. Many development economists believe that economic prosperity can not come with out financial inclusion and micro-finance is being considered as a vehicle for financial inclusion in Indian economy especially in rural economy. This is true. But as of today, micro-finance has not made any significant contribution in financial inclusion and economic prosperity especially in rural India. To my mind micro-finance is a myth as cooperatives have failed in brining or attaining financial inclusion and economic emancipation. Much has been left on the part of micro-finance institution and their regulations. For this system to work it had to have very low defaults. The present paper is a modest attempt in this direction. The paper explores the issues which have made the nature,