• Ms. Meenu Arora Research Scholar Mewar University, Chittorgarh.
  • Dr. Chhavi Sharma Assistant Professor, Shivaji College, Delhi University.


Micro finance, Micro finance Institution, SHGs, Financial inclusion


There is a vast network of banking and cooperative finance institutions in India and,

therefore, formal financial services are, in theory, available and accessible to low income families in virtually every part of the country.  However, their availability is a mirage.  Stung by the deficiencies of the directed credit programmes, particularly in the 1980s, the banking  institutions in India have virtually withdrawn from lending to the poor while the cooperative credit system is bankrupt and all but defunct in large parts of the country.    

It is in this situation that the non-government microfinance sector has attempted to provide an alternative to the often high-cost informal financial service providers on whom most low income clients must rely.  Despite the supporting efforts of apex funding organisations such as NABARD and SIDBI, however, the outreach of the microfinance sector remains minus-cule in relation to the need.  Barely 3 million of the estimated 60 million poor families in India have been covered by the microfinance sector.  While many MFIs, and the NABARD programme, have done well in terms of promoting a semi-formal credit culture, however, this success has been achieved at the cost of flexibility. The number of the poor is enormous but ironically ,the number of Micro finance Institutions catering to them is handful .Microfinance is not just  about giving micro credit to the poor rather it is an economic development tool whose objective is to assist poor to alleviate poverty and become self dependent . Small scale businesses use credit/loans from micro finance institutions (MFI) to finance their business operations and others use the credit to set up business.Micro Finance Institutions were established to enable the poor without collateral security access credit funds at affordable and friendly terms and small savers to accumulate wealth. This shows that micro finance activities are relevant for the growth and development of Small scale industries.This paper is based on descriptive research and uses secondary data for the research.The study is limited to the Uttar Pradesh state. This paper deals with the functioning of micro finance institution in the survival and growth of small scale industries .In this paper different point have been suggested for the development of micro finance which will help the economic and social life of the people .

India now has that rare window of opportunity to improve the quality of life for its 1.2 billion citizens and lay the foundations for a truly prosperous future –a future that will impact the country and its people for generations to come. (sources::  accessed by 15 may 2014)


o Arunachalam, R. S. 2011. The Journey of Indian Microfinance: Lessons for the Future, Chennai, Aapti

o Dr.K.Jayalakshmi 2014 micro finance-an imperative for financial inclusion in India,Andrapradesh

o NABARD,Status of Microfinance in India report 2012-13

o The maturing of Indian Microfinance by EDA rural system pvt. Ltd.2004.

o Microfinance Handbook: An Institutional and Financial Perspective (Sustainable Banking with the Poor) by Joanna Ledgerwood (Dec 1, 1998)

o SIDBI Report on Micro, Small, and Medium Industries Sector 2007,2010.

o Sarangi, Niranjan (2007), “Microfinance and the Rural Poor: Impact Assessment Based on Fieldwork in Madhya Pradesh, India”, Paper Presented in Conference on Sustainable Development & Livelihoods, Delhi School of Economics, Delhi, 6-8 February.

o SIDBI (Small Industries Development Bank of India) (2005) Impact Assessment. (web-report)

o Piyush Tiwari and S.M. Fahad “Microfiance Institutions in India”Housing Development Finance Corporation ,Ramon House, 169 Backbay Reclamation, Mumbai 400 020

o Shastri, R.K., (2009). Micro-finance and Poverty Reduction in India (A Comparative Study with Asian Countries). African Journal of Business Management

o Jyoti Prakash Basu “Microfinance and Women Empowerment”An Empirical Study with special reference to West Bengal

o Basu and Srivastava, “Scaling-up Microfinance for India’s Rural Poor,” World Bank

o Policy Research Working Paper 3646, June 2005. Accessed Jan. 2006. Available from:

Additional Files



How to Cite

Ms. Meenu Arora, & Dr. Chhavi Sharma. (2017). FROM MICROFINANCE TO MACROCHANGE: AN EFFECTIVE STRATEGY TO REDUCE POVERTY AND EMPOWER WOMEN. International Education and Research Journal (IERJ), 3(6). Retrieved from