Issues and challenges of microfinance: A conceptual framework

India is one among the fastest and most emerging economy in the world. Even after achieving 7 to 8% of GDP growth, major part of countries population is still affected by poverty, and other huge social evils. In order to address issues like poor infrastructure, lack financial sources to poor and unemployment, Government of India and other financial agencies have initiated inclusive programs through micro finance and SHG bank linkage program. Micro finance refers to small savings, credit and insurance services extended to socially and economically vulnerable segment of society. Micro finance institutions have made remarkable progress during the last two decades in innovating services and technologies to deliver financial services to poor on sustainable basis. Increased operation and rapid growth of micro finance industry have come across with lots of challenges and problems like lack of funds, fraud, language barrier, regional disparity etc. This study discus the concept and importance of microfinance initiatives and focus on the issues and challenges of micro finance institutions.