About the Book: Micro Finance and Indias Rural Economy
After achieving independence in 1947, the government of India and the Reserve
Bank of India have made concerted efforts to provide the poor with access to
credit. Despite the phenomenal increase in the physical outreach of formal
credit institutions in the past several decades, Indias rural poor continue to
depend on informal sources of credit. Institutions have also faced difficulties
in dealing effectively with a large number of small borrowers, whose credit
needs are small and frequent, and their ability to offer collaterals is limited.
Cumbersome procedures and risk perceptions of the banks leave a gap in serving
the