International Journal of Applied Research
Vol. 3, Issue 8, Part E (2017)
Impact of micro finance activities on tribes (A study of Kotturu Mandal in Srikakulam district)
The need for informality in credit delivery and easy access is demonstrated by the fact that SHGs and Micro Finance Institutions (MFIs) constitute the fastest growing in recent years in reaching out to small borrowers. These institutions are able to effectively address the small ticket and last mile issues. In the four years between 2003 and 2007, small borrower bank account (credit) i. e. up to Rs. 25000 increased marginally from 36.9 million, while SHGs borrowing member grew from 10 million to 40.5 million and Micro Finance Institutions borrowers grew from 1.1 million to 8 million. In 2007-08, Micro Finance Institutions have added 6 million clients increasing their outreach to 40 million as per data brought out by Sa-Dhan. Financial inclusion is possible when all stakeholders realize that “inclusive banking” is good business than regulatory and policy frameworks that accessibility and responsible banking. The inferences drawn from this study reveal that, one key debate within Micro Finance has been whether donors and practitioners should focus on impact, i.e. improved living standards for the poor or financial sustainability. The former approach has been called ‘poverty lending’ or ‘the welfare approach’, whereas the latter is sometimes termed "Institution Building". The welfare approach supplements financial services with education and health services.
The Institution Building approach focuses on financial service. If poor people are willing to pay to use the institution, it must be offering them value only by ensuring financial sustainability. One view is that the most important form of micro finance is credit targeted to poor people who are also talented entrepreneurs. If these people gain access to credit, they will expand their businesses, stimulate local economic growth and hire their less entrepreneurial neighbors. While this approach has had significant results in the developing world, it has failed to reach the majority of poor people, who are rural subsistence farmers with little, if any, non-farm income. If any one go to any Indian village will find leaky hand pumps, parched fields and bony cattle is the ubiquitous Self Help Group (SHG's). Going by several names from ‘thrift’ and ‘credit’ societies to Micro Finance is now a fixture in the lives of rural women.
How to cite this article:
Choppara Bala Kotaiah. Impact of micro finance activities on tribes (A study of Kotturu Mandal in Srikakulam district). Int J Appl Res 2017;3(8):302-306.