Microfinance as an Effective Poverty Tool to Fight Rural Poverty

Topics: Poverty, Microfinance, Microcredit Pages: 29 (8445 words) Published: May 13, 2013


1) Introduction
2) Concept of microfinance and its origin
3) Different microfinance institution in the world
4) Objectives
5) Origin of MF and SHGs in India
6) Characteristics of SHGs
7) Progress of Micro Finance in India
8) Strengths and Issues of Indian Micro Finance Sector
9) Strategies/Suggestions
10) Conclusion

Poverty is a social phenomenon in which a section of the society is unable to fulfill even its basic necessities of life. The countries of the third world exhibit invariably the existence of mass poverty. India accounts for 17% of the world’s population, 36% of the world’s poor (the largest number of poor). Even after 50 year of independence Poverty remains the most shameful blot on the face of India economic development. Of its 1 billion inhabitants, an estimated 350-400 million are below the poverty line, 75 per cent of them in the rural areas. The high incidence is a matter of concern in view of the fact that the poverty eradication has been one of the major objectives of development planning process. The poor are trap in this vicious circle that tend to perpetuate the low level of development. [pic]

According to Nurkse “Vicious circle” refers to a circular constellation of forces tending to act and react upon one another in such a way as to keep a poor country in a state of poverty”. This poverty is a big obstacle in the path of economic growth and development. Many factors contribute to poverty but the most important is insufficient household income. According to the Planning Commission, a person is define to be under poverty if his monthly expenditure is less than Rs.327 for an adult. While in term of consumption it is 2250 calories a day. There is a large disparities in income distribution and level of consumption in different states in India. Most of the poor people are concentrated in the eastern region. A comparison of poverty ration in India based on the NSSO survey is presented in the table below. Poverty Ratio at state level (In Percent)

|Sl.No |State |Poverty Ratio | | | |1994 |2000 | |1 |Andhra Pradesh |22.19 |15.77 | |2 |Arunachal Pradesh |39.35 |33.47 | |3 |Assam |40.86 |36.09 | |4 |Bihar |54.96 |42.60 | |5 |Goa |14.92 | 4.40 | |6 |Gujarat |24.21 |14.07 | |7 |Haryana |25.05 | 8.74 | |8 |Himachal Pradesh |28.44 | 7.63 | |9 |Jammu & Kashmir |25.17 | 3.48 | |10 |Karnataka |33.16 |20.04 | |11 |Kerala |25.43 |12.72 | |12 |Madhya Pradesh |42.52 |37.43 | |13 |Maharashtra |36.86 |25.02 | |14 |Manipur |33.78 |28.54 | |15 |Meghalaya |37.92 |33.87 | |16 |Mizoram |25.66 |19.47 | |17...
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