Significance of Microfinance Institutions in Rural Development of India

Micro finance is to supply micro credit to people living in utter poverty and has no reach to the conservative and formal financial products. It is an aid to engage them in productive activities and grow their tiny businesses. Micro finance focused on availing the credit in a standard manner. Micro financial schemes plays vital role in increasing women‟s participation in economic activities and decision making. In this research paper an effort is made to investigate the role of microfinance in rural development especially through Micro financial schemes. This study is an empirical study which aims to find out the role and responsibilities of microfinance in rural development. Our experience while doing this study suggests that microfinance provides key lessons for development in terms of what mechanism and best practices should be adopted and how to make small change that creates a big difference. It is concluded that poor people in rural areas especially in under developing countries, are in immense need of credits so microfinance programs must make available this credit needs and motivate the poor people to increase their standard of living.