The Micro-Finance Intervention and the Sustainable Finance for the Rural Poor: Lessons from Dakshina Kannada

The prediction of Millennium Development Goals of U.N states that, „Growth with Equity‟ clearly envisages that the growth spree of the globe in the 21st century has left some people behind the time. Handful of the global population are still languishing in the vicipous circle of poverty and are cast side by those who are economically stronger in the sway of globalisation. Strong and healthy financial institutions are the pillars of economic growth, progress and success of modern economies. Lack of accessible, affordable and appropriate financial services has always been a global problem. Therefore, the significance of an inclusive financial system is widely accepted. Financial access can really boost the financial condition and standards of life of the poor and the disadvantaged. World over, micro finance is looked upon as means of credit-based poverty alleviation and financial inclusion. The Women‟s Self Help Group movement is bringing about a profound transformation in rural areas of India. Microfinance Institutions (MFIs) play a significant role in facilitating inclusion, as they are uniquely positioned in reaching out to the rural poor. Many of them operate in a limited geographical area, have a greater understanding of the issues specific to the rural poor, enjoy greater acceptability amongst the rural poor and have flexibility in operations providing a level of comfort to their group. The present paper deals with how the mechanism of microfinance can enable the financial inclusion of excluded population, especially the women, into the formal financial sector. The paper also focuses light on the economic empowerment of women especially women of the rural area. Policy recommendation includes the delivering of credit services to the marginalized and vulnerable poor women at a minimum cost will have wider impact on the socio- economic welfare. Micro finance serves as an umbrella that describes the provision of banking services by poverty focused financial institutions to poor parts of the population that are not being served by mainstream financial services providers.