Present and Potential Contribution of Microfinance to India’s Economy

Present and Potential Contribution of Microfinance to India’s Economy

Financial inclusion, or empowerment of all citizens with access to financial resources through formal financial institutions and systems, has been advocated by many as an effective vehicle for economic development and poverty alleviation. Microfinance has emerged as a major instrument of meeting the needs of lower income households by linking them to the financial resources to meet both productive and critical needs on credit.  One of the important sets of institutions engaged in the microfinance sector comprises the Non-banking Finance Companies (NBFC-MFIs). Their clientele, the households who borrow from this group of institutions now exceed three crore across the country, while as a whole the sector serves around six crore households. The present study by NCAER has provided an assessment of the impact of microfinance on the macro economy, focusing on the activities of NBFC-MFIs. This focus provides a better understanding of the channels of the impact of microfinance on jobs and income.  The impact on GDP and jobs has been extrapolated to the entire microfinance sector to arrive at a broader assessment of the sector as a whole.  The study has highlighted the interdependency of the overall economic growth and the development of microfinance.

Events

Publication

  • 17530Present and Potential Contribution of Microfinance to India’s Economy

    Financial inclusion, or empowerment of all citizens with access to financial resources through formal financial institutions and systems, has been advocated by many as an effective vehicle for economic development and poverty alleviation. Microfinance has emerged as a major instrument of meeting the needs of lower income households by linking them to the financial resources...   Read More

Researchers

  • 2230Present and Potential Contribution of Microfinance to India’s Economy

    Dr Shashanka Bhide is an Honorary Senior Adviser at NCAER. He was associated with NCAER from 1982 to 2014 in different capacities. After leaving NCAER in July 2014, he took up the position of Director, Madras Institute of Development Studies, Chennai until his retirement in December 2018. His research has covered a number of areas...   Read More

  • 429Present and Potential Contribution of Microfinance to India’s Economy

    Bornali Bhandari is a Senior Fellow at NCAER with a background in international economics and macroeconomics, specifically focusing on the impact of globalisation on development. Currently, she is engaged in a number of industry studies including automobiles, farm mechanisation, and digitisation. Her wider research interests include analysis of skilling from a 3-E perspective (education, employability...   Read More

  • 2225Present and Potential Contribution of Microfinance to India’s Economy

    Devender Pratap is a Fellow at NCAER. His current research interests include trade policy analysis/CGE modelling, GTAP database, social accounting matrix, input output analysis, construction of base-run for CGE modelling, macro-econometric modelling and agricultural/livestock economy. At NCAER, he has handled three major CGE models in single-country and multi-country frameworks. He has also been involved in...   Read More

  • 2165Present and Potential Contribution of Microfinance to India’s Economy

    Ajaya Kumar Sahu is an Associate Fellow at NCAER. He is an Agricultural Economist by training. During his stay at the NCAER, he has worked on areas like poverty analysis, issues related to agriculture and rural development, labour and employment with special reference to quality of jobs and skills, public finance and analysis of price dynamics. ...   Read More