Is Micro Finance a Profit Maximising Industry or a Social Business – Some Evidences from Recent Literature Survey

Abstract

Microfinance (MF) is a considered as a powerful tool for  poverty alleviation . It implies provision of financial services to poor and low-income people whose low economic standing excludes them from formal financial systems. From industry point of view also, access   to financial services by the poor and the deprived is highly important  for the success of market based and poverty alleviation programs. Access to services such as, credit, venture capital, savings, insurance, remittance is provided on a micro-scale enabling participation of those with severely limited financial means.   The poor and needy  household with no access to financial services, find it extremely difficult to take advantage of economic opportunities, build assets, finance their children’s education, and protect themselves against financial requirements and shocks thereby caught into a vicious circle of poverty. Building inclusive financial systems therefore, should be a central goal of policy makers and planners across the globe. In this regard, microfinance has been recognized worldwide as an important policy instrument. This is not the end of the problem. The unorganized and the informal sector is taking due advantage and minting money through high levels of lending rates in the name of poverty elevation, women upliftment and empowerment. In this paper an attempt has been made to study whether microfinance is able to  realize the true potential of its clients through social intermediation and ensure in building an inclusive society and eradication of poverty and working with a social cause.