The challenges of microfinance: In India and Bangladesh

Abstract

Microfinance means giving very small loans to very poor people to help them to grow their tiny businesses, as well as to pull themselves out of poverty by increasing the level of income and building viable businesses. It includes a broader range of services as credit, savings, insurance etc. Sometimes it is called as "banking for the poor people" Recently it has been observed that the importance of "Microfinance" is rising high to maintain a sustainable socio-economic status of all developing countries. In this paper we try to highlight the challenges of microfinance especially in India and Bangladesh. A study of these two countries shows us that how the microfinance helping and assisting the lower income groups and self help groups to get rid out of the poverty, which is a great slur and hindrance of a developing country. With the help of microfinance, microcredit and financial institutions, the poor people can survive their livelihoods in a very a stable and secured way. The poor people become self sufficient and self employed by getting micro credit, which enables them to engage in productive activities.