The Role of Banks in Promoting Micro Finance and Self Help Group

The paper focus on microfinance refers to small savings. It is emerging as powerful tool for poverty alleviation in India. The inclusive growth is economic growth that is distributed fairly across society and creates opportunities for all. The government has initiated various schemes for the development of rural India. For many, microfinance is a way to promote economic development, employment and growth through the support of micro-entrepreneurs and small businesses; for others it is a way for the poor to manage their finances more effectively and take advantage of economic opportunities while managing the risks. Financial inclusion can be brought about by alternative agencies such as financial co-operatives societies, SHGs, wherein the decision-making power and profits are retained in the hands of the members themselves, the banks are also playing key role in the development of rural household with the help of Bank Mitra, working as a micro finance facilitator especially in rural and unbanked area. The provision of micro-credit to the poor, especially to youth and women in the rural, is essential in poverty reduction through empowerment.. The measurement of rural and economic development will be done with the help of the growth of the microfinance institutions, savings in MFIs, loan disbursed by the microfinance institutions, growth of the self-help groups and increase in the basic financial services in the rural part of the country. The prospect of micro finance is dominated by SHGs, Banks linkage Programme its main aim is to provide a cost effective mechanism for providing financial services to the poor.