Financial Inclusion - Microfinance a Sustainable Model

Discussing the potential of NBFC-MFI model to lead financial inclusion in India
Download 9 pages
This paper examines the feasibility of banks in achieving financial inclusion. It discusses different delivery models and states that low penetration levels of bank branches in rural India, high cost of operations, poor product design and suitability etc. are key challenges to financial inclusion. The paper proposes non-banking finance companies – microfinance institutions (NBFC-MFIs) as the most suitable model to address these challenges. The following topics are discussed in the paper:
  • Introduction to the concepts of financial inclusion and microfinance;
  • Models of microfinance delivery in India;
  • Comparison of the bank led model with the NBFC-MFIs model with a focus on why the bank led model may not be as effective in achieving financial inclusion.

About this Publication

By Subramanian, R.