ABSTRACT

Micro finance, as the name itself indicates, means lending micro or small sums of money. With the increased focus on the rural agriculture sector and small scale industries, the micro-finance activity is gaining prominence across the country.

INTRODUCTION: Micro finance is the provision of financial services to the poor, which includes not only loans, but also others services such as savings, micro insurance, and the other financial innovations. Micro credit is part of micro finance, which is extension of credit to poor who are not considered bankable due to lack of collateral, steady employment and a verifiable credit history and hence cannot meet even the minimal qualifications to gain access to traditional credit. The banking sector offers loans to persons satisfying the 3Cs of credit, capacity and capital. However, there are millions of people who live in miserable circumstances unable to provide collateral security to banks but can certainly flourish in life if given an opportunity to the poor and needy to uplift their standard of living. Many instances revealing the positive impact of micro finance on the lives of the poor are available. One such instance can be quoted from the life of Elleva, who was working as a daily laborer with her husband, unable to earn even to meet a bare subsistence of living. Elleva of Parvatpur in Andhra Pradesh stands as a glowing symbol of success story of micro finance. A loan of Rs. 5000 has transformed her life totally from a daily laborer to an entrepreneur. The joy in Elleva can be well judged from her own words- I am very happy to have gotten a loan. Now I have my own business, earn a regular income, and no longer have to work as a day laborer.

Micro finance defined: The provision of thrift, credit and other financial services and products in very small amounts to the poor for enabling them to raise their income levels and improve living standards.

Stages in Micro-Finance: Micro-finance programs and their needs for funds can be considered in three stages of their growth. They are; Start up stage. Scaling up stage and

Sustainable stage.

Micro-Finance NABARDs Vision and mission: VISION: Empowerment of rural poor by improving their access to the formal credit system through various micro- finance innovations in a cost effective and sustainable manner. MISSION: to extend financial services to one third of Indias unreached rural poor numbering nearly 100 million through one million Self help group (SHGs) with focus on women during a ten year period through various micro finance interventions.