ROLE OF MICRO-FINANCE THROUGH SELFHELP GROUP-BANK LINKAGE PROGRAMME IN POVERTY ALLEVIATION OF RURAL AREAS IN INDIA

Poverty is widespread in India although it has become a part of the global economy in 1990s through the Structural Adjustment Programme. India‟s economy is booming at a faster rate but the benefits of it are not equally distributed in the country. The period from 1999-2000 to 2004-2005 saw rapid growth in the country‟s economy but it has not successful to eradicate the problem of unemployment. However, a great step towards the poverty alleviation was taken in 1992 with the introduction of the institution of Microfinance through the Self-Help Groups-Bank linkage programme introduced by National Bank for Agriculture and Rural Development (NABARD). The microfinance programme by NABARD has initially started in 13 identified priority states which accounts 70% of rural poor population. The popular model in Indian micro finance context is the SHG-Bank linkage model. The study found that the microfinance programme not only helped in eradication of poverty but also in economic empowerment of rural women. It has resulted in savings, creation of more productive assets and increased employment. But it has svereal problems such as high rate of interest, transaction costs, lack of skill, variation in implementation etc.