Drivers of Microfinance in India: An Exploratory Study

The evolutionary concept of microfinance came into being in 20th century as an alternate to traditional financial services offered by banks. The objective of microfinance was to help vulnerable section of society who remained outside the formal banking sector. The system proved to be beneficial for downtrodden and neglected section which was formally considered non-bankable by banks and financial institutions. Various studies show different forms of microfinance institutions, their legal structures, its working and also highlight how this new programme (microfinance) bridges the gap by helping the poor and needy section of society. Through this paper researcher try to review the existing literature and explore the drivers of microfinance in India. The microfinance as an instrument of socio-economic change is also helpful in achieving long sought goal of financial inclusion and has to go a long way. Government, policymakers and institutions should come forward for a sound and robust system where more and more people are included in financial ambit through microfinance and social mission they have initiated can be achieved for creating positive externalities.