Microfinance government has considered enhancing allocation funds for provision

Microfinance
in india:

Indian banking system is the biggest
banking networks among the world but its did not contact most of rural areas in
India. About 68.84 percent of the Indian population belongs from rural areas
and only 38.7 percent banks branches have in rural areas. The banks did not
fulfill the credit requirements of the poor and they were forced need to fall
back on moneylenders for credit. The traditional rural credit system has not
been successful in India, however its long existence and various interventions,
in reaching the need section of the society.

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In recent years, microfinance has proved
an effective instrument in improving the quality life, decision-making and
living standards of the poor. The microfinance schemes and various approaches have
practiced by both non-government and government organization in India. In India
many landing finance institution viz. NABARD, Small Industries Development  Bank of India (SIDBI) and Rashtriya Mahila
Kosh (RMK) have played a significant role in making a real moment to
microcredit in India. Self Employed Moment Association (SEWA), Mysore Resettlement
and development agency(MYRDAN), Professional assistance for development action
(PRADAN), International centre for entrepreneurship and career development
(ICECD); act as a resource organization successful in other part of the country
without restricting to one area.

The establishment of self –employed
women’s Association (SEWA) was in Gujarat in India. It was first initiative of
microfinance by the india. SEWA had registered in 1972 as a trade union of self-employed
women worker of unorganized sector. After that, SEWA trade union established
their bank in 1974 that had known SEWA bank. After some time this bank has
registered as a co-operative bank which has been providing service (banking) to
poor women.

The government has considered enhancing
allocation funds for provision of health, educations, insurance, sanitation and
decision-making and capacity making and well being of poor. The aim of behind
the development of banking sector was to provide help to poor to stats their
micro enterprise at lain self-sufficiency.

(mahanta padmalochan, panda Gitanjali
and kumar sree, 2012, status of microfinance in india- a review, IJMGS &
MR, Vol. I Issue II Nov.(3a))

In India, govt. had also launched different
poverty reduction programmes viz. Small Farmers Development Scheme(SFDS)1974-75,
National Rural Development Programmes(1980) NRDP, Integrated Rural Development
Programme (IRDP)1980, Rural Landless Employment Guarantee Programme (RLEGP)
1983, Jowhar Rozgar Yojana (JRY)1989, Swarna Jayanti Gram Swarojgar Yogana
(SGSY) 1999 and many other programme. (3a)

However, not a single programme fulfills
their desired goal, because in the part of government official like execution
and malpractices is very deprived. Nevertheless, as a supplement the endeavor
of micro-credit had started a good scheme in India viz. IRDP in 1980, that was
achieved little but the basic problem of IRDP was that its intend incorporated
a substantial component of subsidy and the resulted that the funds were
extensive mismanagement and miss utilization. So that, estimates of refund rate
in IRDP ranged from 25-33%. After that, ‘the world’s largest microfinance
programme’ failed due to political interference and poor execution. Subsequently,
these programmes suffered from lack of bank credit, critical investments and
lack of market linkages. These programmes had based on subsidy ambitious and
ignored the process of social intermediation that was necessary for success of Self
Employment Programmes. For the review of Self-Employment and Wage Employment Programme,
the planning commission constituted a committee in 1997s and the committee
recommended that all Self-Employment Programmes should be merger and shift from
individual beneficiary approach to a group based approach. The government of India
accepted the committee recommendation and on 1st April 1999 a new
programme ‘Swarnajayanti Gram Swarojgar Yojana’ (SGSY) was launched by the amalgamate
programme viz. TRYSEM, IRDP, DWCRA, SITRA, GKY, MWS. This holistic programme was
covering all aspects of self-employment such as formation of SHGs, credit, training,
infrastructure, technology and marketing. SGSY programme is a credit –cum
subsidy programme and its emphasis on activity clusters. The SGSY programmes
aims to establishing a huge number of microenterprise in rural areas. Finally,
this programmes has got significantly response from the beneficiaries. The SGSY
conceived as a holistic programme of microfinance enterprise development in
rural areas with emphasis on organizing the rural poor into self-help-groups,
planning of activity cluster, Capacity building, technology, infrastructure
support, credit and marketing linkages. The programme has inbuilt safeguards
for weaker sections and is credit motivated. In a network of agencies are
including namely the ‘District Rural Development Agencies’ (DRDAs), Line
Department of State Government, bank, NGOs, and Panchayti Raj.

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