Voices of People on Financial Inclusion of Micro Finance in rural areas of India

Abstract

India is an emerging economy and has witnessed many financial reforms and changes in the system. The majority of the population in India lives in rural areas which are approximately 70% (World Bank Report, 2021). Microfinance is viewed as a promising instrument for socio-economic upliftment in a developing country such as India. It is expected to have poverty alleviation and basic necessities to be addressed for the people who are living in rural areas with the help of microfinance initiatives (Mohd, 2018). The emphasis of the present paper qualitatively with the help of semi-structured interviews with the microfinance institutions explores the role of microfinance in financial inclusion and what could be the grey areas where the institutions should work better to solve the issues faced by people in rural areas. The results show the majority of people in rural areas have bank accounts and take MF loans from banks. However, there is a need for awareness and strategic initiatives by the banks to uplift microfinance in the rural parts of the county. The empirical results also disclose the suggestions by these microfinance institutions to the government for increasing initiatives in the country. Keywords: Microfinance institutions, Indian MFIs, Regulatory framework, MF Efficiency

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