International Journal of Commerce and Management Research

Authors
Aanchal Singhal, Dr. Bindu Arora

Abstract
Microfinance is “the provision of financial services to low-income poor and very poor self-employed people”. Microfinance has a very important role to play in development according to proponents of microfinance. UNCDF (2004) states, studies have shown that microfinance plays three key roles in development. It helps very poor households meet basic needs and protects against risks, is associated with improvements in household economic welfare, helps to empower women by supporting economic participation and so promotes gender equity. Microfinance programmes like the Self Help Groups (SHGs) in India, are playing a vital role in extending micro-finance to the rural poor. SHGs have been increasingly promoted for their positive social and economic impact and their role in the empowerment of rural poor. A number of studies have been undertaken regarding the relationship between microfinance and socio-economic development of poor. The present paper constitutes an environmental scan in order to get an overview of the delivery models of microfinance and models which are prevailing in India to empower the rural poor. It was decided to undertake a literature scan through the internet and collect secondary data, wherever possible, of published and unpublished reports/research studies brought out by the state, NGOs as well as by research institutions. An attempt is made to collate the information that has been collected from these various sources. This paper contributes by putting forth the statement that microfinance can be a way out to empower poor socially and economically and enable them to become self-reliant. The main objective of the study is to know the delivery channels of microfinance for the socio-economic development of rural poor.