Micro Finance in India

I. Introduction
The agricultural sector has always been an important contributor to the India GDP. This is due to the fact that the country is mainly based on the agricultural sector and employs around 60% of the total workforce in India. The agricultural sector and its allied sectors contributed around 15.7% to India GDP in 2008-09.
Agriculture Growth Rate in India GDP inspite of its decline in the share of the country's GDP plays a vital role in all round economic and social development of the country. The Growth Rate of the Agricultural Sector in India GDP grew after independence for the government of India placed special emphasis on the sector in its five-year plans.

Since independence Indian agricultural sector has come through many ups and downs, it has seen the terrible face of droughts and floods The agricultural sector has had low production due to a number of factors such as illiteracy, insufficient finance, and inadequate marketing of agricultural products.
Agriculture Growth Rate in India GDP has also decreased due to the fact that the sector has insufficient irrigation facilities. As a result of this the farmers are dependent on rainfall, which is however very unpredictable.
Finance in agriculture is as important as development of technologies. Technical inputs can be purchased and used by farmer only if he has money (funds). But his own money is always inadequate and he needs outside finance or credit.
Currently the biggest challenge for the entire credit delivery system mechanism of India is the financial non-inclusion of small and marginal farmers. There are some fundamental problems for this and the root of these fundament problems are the land holding pattern of the Indian farmers. Majority of farmers are marginal farmers and they cultivate in the land on share basis. So basically they don’t have the land on their name. Due to this fact they hesitate to approach the co operative societies or banks. They prefer to take loan from the local... [continues]

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