The Role of Microfinance in Indian Economy

Author(s)	CA Pratyush Mehta
Country	India
Abstract	Microfinance helps in lifting people out of poverty, empowering women, and promoting the overall economic growth. The success story of Bangladesh is a powerful example where poverty was reduced from 44% to 20% in 30 years. This paper explores the basics of finance of inclusion and microfinance focusing on their role in India’s economic growth. This study explores the impact of microfinance on agriculture, fisheries, micro and small enterprises and also focuses on Self-Help Groups (SHGs) to empower women. However, microfinance faces various challenges such as limited employment, high operating costs, regulatory and social barriers. The importance of interventions in various forms such as, regulatory reform, and improved financial literacy have been discussed. This study focuses on the areas which ensures that microfinance remains a tool for financial inclusion and financial liberalization, enabling an inclusive and sustainable economy.
Keywords	Microfinance, Financial Inclusion, Self Help Groups, Sustainable Economic Growth
Published In	Volume 7, Issue 4, July-August 2025
Published On	2025-08-31
DOI	https://doi.org/10.36948/ijfmr.2025.v07i04.55039

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