Scaling-up Microfinance for India’s Rural Poor

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dc.creatorBasu, Priya
dc.creatorSrivastava, Pradeep
dc.date2012-06-18T18:48:04Z
dc.date2012-06-18T18:48:04Z
dc.date2005-06
dc.date.accessioned2026-07-01T01:23:11Z
dc.descriptionThis paper reviews the current level and pattern of access to finance for India's rural poor and examines some of the key microfinance approaches in India, taking a close look at the most dominant among these, the Self Help Group (SHG) Bank Linkage initiative. It empirically analyzes the success with which SHG Bank Linkage has been able to reach the poor, examines the reasons behind this, and the lessons learned. The analysis draws heavily on a recent rural access to finance survey of 6,000 households in India undertaken by the authors. The main findings and implications of the paper are as follows: India's rural poor currently have very little access to finance from formal sources. Microfinance approaches have tried to fill the gap. Among these, the growth of SHG Bank Linkage has been particularly remarkable, but outreach remains modest in terms of the proportion of poor households served. The paper recommends that, if SHG Bank Linkage is to be scaled-up to offer mass access to finance for the rural poor, then more attention will need to be paid toward the promotion of high quality SHGs that are sustainable, clear targeting of clients, and ensuring that banks linked to SHGs price loans at cost-covering levels. At the same time, the paper argues that, in an economy as vast and varied as India's, there is scope for diverse microfinance approaches to coexist. Private sector microfinanciers need to acquire greater professionalism, and the government can help by creating a flexible architecture for microfinance innovations, including through a more enabling policy, legal, and regulatory framework. Finally, the paper argues that, while microfinance can, at minimum, serve as a quick way to deliver finance to the poor, the medium-term strategy to scale-up access to finance for the poor should be to "graduate" microfinance clients to formal financial institutions. The paper offers some suggestions on what it would take to reform these institutions with an eye to improving access for the poor.
dc.formatapplication/pdf
dc.formattext/plain
dc.identifierhttp://documents.worldbank.org/curated/en/2005/06/5866236/scaling-up-microfinance-indias-rural-poor
dc.identifierhttps://hdl.handle.net/10986/8311
dc.identifierhttps://doi.org/10.1596/1813-9450-3646
dc.identifier.urihttp://hdl.handle.net/123456789/417618
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relationPolicy Research Working Paper; No. 3646
dc.rightsCC BY 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by/3.0/igo/
dc.rightsWorld Bank
dc.subjectACCOUNTING
dc.subjectAFFILIATE
dc.subjectAGRICULTURAL CREDIT
dc.subjectBALANCE SHEET
dc.subjectBALANCE SHEETS
dc.subjectBANK ACCOUNTS
dc.subjectBANK BRANCHES
dc.subjectBANK LENDING
dc.subjectBANK NATIONALIZATION
dc.subjectBANKING SECTOR
dc.subjectBANKS
dc.subjectBONDS
dc.subjectBORROWING
dc.subjectBORROWING COSTS
dc.subjectCAPITAL ADEQUACY
dc.subjectCAPITAL REQUIREMENT
dc.subjectCAPITALIZATION
dc.subjectCOMMERCIAL BANKS
dc.subjectCOOPERATIVE BANKS
dc.subjectCREDIT RATINGS
dc.subjectCREDIT RATIONING
dc.subjectCROWDING OUT
dc.subjectDEBT
dc.subjectDEBT FINANCING
dc.subjectDEFAULT RISK
dc.subjectDEPOSITS
dc.subjectDEREGULATION
dc.subjectEMERGING ECONOMIES
dc.subjectEMERGING MARKETS
dc.subjectEMPLOYMENT
dc.subjectEQUITY CAPITAL
dc.subjectEXPENDITURES
dc.subjectFINANCIAL ASSETS
dc.subjectFINANCIAL DISTRESS
dc.subjectFINANCIAL INSTITUTIONS
dc.subjectFINANCIAL INTERMEDIATION
dc.subjectFINANCIAL MARKETS
dc.subjectFINANCIAL SERVICES
dc.subjectFISCAL DEFICITS
dc.subjectGOVERNMENT
dc.subjectGOVERNMENT SECURITIES
dc.subjectHOUSEHOLD DEBT
dc.subjectINCOME LEVELS
dc.subjectINSURANCE
dc.subjectINTEREST INCOME
dc.subjectINTEREST RATES
dc.subjectINTERNAL CONTROLS
dc.subjectLENDING RATES
dc.subjectLIQUIDITY
dc.subjectLIQUIDITY RATIO
dc.subjectMARKET VALUE
dc.subjectMICROFINANCE
dc.subjectNET PROFIT
dc.subjectPORTFOLIOS
dc.subjectPRIVATE SECTOR
dc.subjectPROFITABILITY
dc.subjectPUBLIC SECTOR
dc.subjectRATING AGENCIES
dc.subjectREGIONAL RURAL BANKS
dc.subjectREGULATORY FRAMEWORK
dc.subjectRESERVE BANK OF INDIA
dc.subjectRISK MANAGEMENT
dc.subjectSAVINGS
dc.subjectSECURITIES
dc.subjectSECURITIZATION
dc.subjectSTREAMS
dc.subjectTAX
dc.subjectTRADING
dc.subjectTRANSACTION COSTS
dc.subjectVULNERABILITY
dc.subjectWAGES
dc.titleScaling-up Microfinance for India’s Rural Poor

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