After the Grameen Bank of Bangladesh pioneered and
succeeded in the concept of Micro-Finance,many NGOs and other organizations
across the globe implementing it in
their nations The waves of this occurred in India too.In
Micro-Finance, loans of lower denominations (Rs. 500, Rs. 1000 etc.) are given
to people for a short term (3 months, 6 months, 1 year etc.) and the payment
frequency is typically in weeks. These loans have an astounding repayment rate
of more than 98% which even front-line banks aren’t able to match. Such loans
are similar to the normal village lending we see in local markets and sabji-mandis.
A
lot of organizations in India work towards giving micro-credits to rural
entrepreneurs. Vikram Akula's SKS Micro-Finance has made its niche in the
Indian sub-continent and has shown a phenomenal growth rate, changing lives of
millions. A lot of NGOs are also in the foray. While there are criticisms
against Micro-finance saying that it will take the rural entrepreneur to a
perpetual debt trap, the interest rates charged are very high etc., the
positives of Micro-finance can’t be ignored. It gives a villager the money he
requires at the time when he wants for
starting his own small business. Some banks are even giving micro-loans to
rural entrepreneurs considering it as part of CSR (Corporate Social
Responsibility).This is indeed a commendable effort.
India,
as a developing nation, needs to up-bring people in the rural areas. This is
because, though India is growing at an amazing growth rate of 9% and about to
touch a two digit one, the facts remain that more than 65% of the population
lives in villages, depending primarily on agriculture, and the growth rate
shown by agricultural sector is very less compared to other sectors.The growth
rate of India is majorily contributed by Services and Manufacturing sectors and
this suppresses the insufficient growth rate of agricultural sector and the
huge majority depending on that from coming to the limelight. This is
definitely not a good situation. Because, a nation can be considered to be
‘developed’ only when it’s entire population achieves economic stability, not
just the urban population or just lone sectors! Let’s hope that these small
efforts done by Micro-finance institutions and banks would mark the beginning
of a new economic revolution in India.
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