Microfinance Delivery – Challenges and Remedies
Keywords:
Microfinance, Structure, Delivery, Challenges, RemediesAbstract
Today the financial inclusion of the economically weaker sections of the society is regarded as most challenging. Microfinance refers to providing of small loans to the poor for self employment and sustenance. Microfinance includes a wide range of services like credit, savings, payment and remittance services, transfer services, and other financial services. However, its growth is slowed down by various regulatory and operational hurdles they are obstructing the smooth functioning of Microfinance Institutions (MFIs). The main drawback faced by MFIs in financing the rural poor people was the low profitability and high transaction cost while trying to maximize the reaching to the needy in terms of small credit at regular intervals. This paper looks into remedies that take on the challenges that exist and the effective implementation of new modes to deliver microfinance to the poor. An attempt is made to understand the operational difficulties faced by MFIs in providing microfinance services to the rural poor. The paper also highlights the means of extending required credit funds to maximum number of poor people in rural areas.
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