Chaitanya Shah
Jun 2011 Page 1 of 3
What is microfinance?
Loans as small as Rs.5,000 and help people in poverty either to start or grow
their own small business. This enables them to earn an income so they can
afford food, clean water, proper shelter and an education for their children.
Importance of Microfinance
At the United Nations General Assembly in September last year, 151 Heads of
State from around the world had gathered to eview the progress in reaching
the millennium development goals to eradicate extreme poverty by 2015.
One of the major conclusions at the summit was that microfinance is one of
the most significant ways.
One of the important issues is to gather good data about the poor people's
access to financial services, so that inadequate data will soon cease to be a
factor in the slowness of the spread of microfinance. CGAP, a World Bankhosted, multi-donor initiative to increase access to financial services to poor
people, has estimated that some 2 billion low-income people in the
developing world still do not have access to bank accounts or financial
services.
The concept has been gathering momentum in India too; however, we have a
great ground to be covered. Let us hope that our policy makers will take early
actions so as to improve the meaning of life for people who are below poverty
line.