“MICROCREDIT: A FINANCIAL INNOVATION AND ITS WELFARE EFFECTS”
Dr. Alpana Trehan, Reader, IMS,DAVV, Indore, India : alpana_48@yahoo.co.in
Ms. Devika Trehan, Student MBA (FA), IMS,DAVV,Indore,India : shivanitrehan@yahoo.com
Ms. Kshama Jaiswal , Lecturer, Renaissance College, Indore, India : kshama_jaiswal@rediffmail.com
ABSTRACT
“Microcredit is the extension of very small loans (microloans) to those in poverty designed to spur entrepreneurship. Microcredit is based on different set of principles, which are distinguished from the general financing or credit. Micro credit emphasizes building capacity of a micro-entrepreneur, employment generation, trust building and help to the micro entrepreneur on initiation and during difficult times.” This paper has discussed about the Micro credit which was introduced in India during eighties. It had a great impact to the urban poor community since they were not considered “creditworthy” enough. In such a scenario, micro-credit came as a blessing because micro-credit institutions lend small sums of money at a reasonable interest rate without any collateral to people who need it the most which led to the development of this financial innovation in India. This paper also discusses about the welfare effects of microcredit, which plays an important role for the social and economic development of the country such as reduction of vulnerability, formation of micro clusters, to eradicate poverty, child labour, helps in skills training, women education and empowerment, creation of wealth and assets and alleviate the rural masses from the clutches of poverty hence improving their standard of living.
INTRODUCTION:-
"If we are looking for one single action which will enable the poor to overcome their poverty, I would focus on credit" - Grameen Bank's founder, Dr. Muhammad Yunus
Microcredit: “Microcredit is the extension of very small loans (microloans) to those in poverty designed to spur entrepreneurship. Microcredit... [continues]
Dr. Alpana Trehan, Reader, IMS,DAVV, Indore, India : alpana_48@yahoo.co.in
Ms. Devika Trehan, Student MBA (FA), IMS,DAVV,Indore,India : shivanitrehan@yahoo.com
Ms. Kshama Jaiswal , Lecturer, Renaissance College, Indore, India : kshama_jaiswal@rediffmail.com
ABSTRACT
“Microcredit is the extension of very small loans (microloans) to those in poverty designed to spur entrepreneurship. Microcredit is based on different set of principles, which are distinguished from the general financing or credit. Micro credit emphasizes building capacity of a micro-entrepreneur, employment generation, trust building and help to the micro entrepreneur on initiation and during difficult times.” This paper has discussed about the Micro credit which was introduced in India during eighties. It had a great impact to the urban poor community since they were not considered “creditworthy” enough. In such a scenario, micro-credit came as a blessing because micro-credit institutions lend small sums of money at a reasonable interest rate without any collateral to people who need it the most which led to the development of this financial innovation in India. This paper also discusses about the welfare effects of microcredit, which plays an important role for the social and economic development of the country such as reduction of vulnerability, formation of micro clusters, to eradicate poverty, child labour, helps in skills training, women education and empowerment, creation of wealth and assets and alleviate the rural masses from the clutches of poverty hence improving their standard of living.
INTRODUCTION:-
"If we are looking for one single action which will enable the poor to overcome their poverty, I would focus on credit" - Grameen Bank's founder, Dr. Muhammad Yunus
Microcredit: “Microcredit is the extension of very small loans (microloans) to those in poverty designed to spur entrepreneurship. Microcredit... [continues]
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