– Microfinance institutions (MFIs) provide financial services to low-income individuals and small businesses. – They play a crucial role in fostering financial inclusion and economic growth.
Why Microfinance is Thriving in India
– Rising demand for small-ticket loans in rural and semi-urban areas. – Government support and digital transformation drive growth.
Top-Performing Microfinance Companies
– Bandhan Bank: Transitioned from an MFI to a universal bank with a strong rural focus. Ujjivan Small Finance Bank: Known for its affordable credit offerings to underserved segments.
Opportunities and Challenges
– Opportunities: Rising credit demand and focus on women-led businesses. Challenges: Vulnerability to economic shocks and high operational costs in remote areas.
The Future of Microfinance in India
– Increased adoption of digital tools for loan disbursement and collection. – Expanding into allied services like insurance and savings products.