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<ul><li><p>*Assistant professor, Department of Business management IGNTU Amerkantak MP. </p><p>**Research Scholar, Department of Business management IGNTU Amerkantak MP. </p><p>Copyright Universal Multidisciplinary Research Institute Pvt Ltd </p><p>130 </p><p>South -Asian Journal of Multidisciplinary Studies (SAJMS) ISSN:2349-7858:SJIF:2.246:Volume 3 Issue 5 </p><p>Role of Microfinance and Entrepreneurship Development in India </p><p>Dr. Sushil K. singh* </p><p>Ram Pravesh** </p><p> Abstract </p><p> The entrepreneurship development in any country leads to the employment generation and </p><p>poverty eradication. Thats why every country continuously tries to speed up the </p><p>entrepreneurship. In the scenario of India small entrepreneurs need small fund to boost up the </p><p>small business but government sector financial lending institutions are now failed to do it. </p><p>Therefore this creates the dependency of micro entrepreneur on microfinance lending institution. </p><p>It is seeing in structure of micro enterprise lending. Bangladesh is a pertinent example of, role of </p><p>microfinance in economic development after that Bangladesh became a model of economic </p><p>development through micro finance, now developing country applying this modal for economic </p><p>development. In the same line India is also applying and experimenting the flourish outcome of </p><p>microfinance. microfinance playing a vital role in economic development by entrepreneurship </p><p>development in India. The success of small business in India depends upon the accessibility of </p><p>working capital. It is only possible by microfinance lending. This paper is prepared by use of </p><p>secondary data. The researcher used internet as source of collection of secondary data. Tables </p><p>and simple percentage were use in data presentation. For analysis the two broad variables keep in </p><p>center in the study. First is entrepreneurship development as a dependent variable and second is </p><p>microfinance as an independent variable. The research paper is divided in three sections. First </p><p>section reveals the success of microfinance in different region across the country for </p><p>entrepreneurship development. The second section discloses the relationship between </p><p>microfinance and entrepreneurship development in the country. The third section concludes the </p><p>result of the research that is there is positive impact of microfinance institution lending on </p><p>entrepreneurship development in India. </p><p>Keywords- Entrepreneurship, Microfinance, Lending, Development, Financial Institution etc </p></li><li><p>*Assistant professor, Department of Business management IGNTU Amerkantak MP. </p><p>**Research Scholar, Department of Business management IGNTU Amerkantak MP. </p><p>Copyright Universal Multidisciplinary Research Institute Pvt Ltd </p><p>131 </p><p>South -Asian Journal of Multidisciplinary Studies (SAJMS) ISSN:2349-7858:SJIF:2.246:Volume 3 Issue 5 </p><p>Introduction </p><p> The process of industrialization of India was start in second five year plan with the </p><p>objective of employment generation and to fulfill the hope demand of individuals. Although it </p><p>was centralized to only a group of industry that why a mass of Indian remain excluded by </p><p>entrepreneurial orientation because of they have not any idea to do something even does not have </p><p>finance to initiate. About 90 percent of people in developing countries lack access of financial </p><p>services from institution either in form of credit or saving ( Robinson et all 2002). Therefore so </p><p>many rural people migrate to big city for employment. After globalization so many multinational </p><p>companies spread their business in India at rural level but rural people remain unemployed. It is </p><p>sure that our success of development since independence is not satisfactory. Unemployment, </p><p>poverty, low living of standard, satisfaction level even our happiness level is very low in rural </p><p>region. Poverty and mass unemployment is very big challenge for us irrespective of immense </p><p>opportunity of entrepreneurship in agriculture and rural non- form sector. It is well known that </p><p>institutional financing system to poor in India is unable to fulfill their credit needs in response of </p><p>that micro finance is growing. Microfinance is playing a instrumental role in improving the </p><p>quality of life and eradication of poverty by meeting the needs of credit of rural poor. </p><p>microfinance has already made a positive impact on quality of life of millions of poor people </p><p>by providing greater access to credit, saving, insurance, transfer remittances, and other financial </p><p>services which would otherwise be untouchable. 1 Success of microfinance in Bangladesh to </p><p>provide livelihood opportunity to rural people have been became an instrument in several less </p><p>developed countries like Uganda, Bangladesh, Nigeria, and so on for sustainable </p><p>entrepreneurship development. In India rural people have low capacity to finance their </p><p>enterprise so productivity is limited, income is low, respectively domestic saving remain low and </p><p>again any increase in productivity is impossible. Skewed distribution of microfinance institution </p><p>in India is also breaking the rural people to engage in new entrepreneurial activity, hinder </p><p>economic growth, which inhibit the sustainability of entrepreneurial activity. Anyhow </p><p>microfinance acts as a tool to empower the rural people. Therefore now we have to focus on, to </p><p>what extent microfinance empowers the entrepreneurship in rural people? And what is its </p><p>contribution to economic development? The economic development is the process of </p><p>improving the quality of all human lives (Todaro 1994). So the economic development consider </p><p>three characteristic namely growth in income and consumption, speeding self-esteem by </p><p>institution that enhance human pride, and increasing freedom of people. So it considers the all </p><p>aspects of human development that is possible by only microfinance, if we talk about poor </p><p>people. When the income of poor people rise then they improve their nutrition and send their </p><p>children to school (Robinson 2002). Guy Vincent says it is fundamental to economic </p><p>development, but also financial services help the poor to expand their economic activities and </p><p>increase their income and assets, their self-confidence grow simultaneously </p><p>iInternational journal of college science, 3: 2 July 2009, Tiyas Biswas and P. P. Sengupta </p></li><li><p>*Assistant professor, Department of Business management IGNTU Amerkantak MP. </p><p>**Research Scholar, Department of Business management IGNTU Amerkantak MP. </p><p>Copyright Universal Multidisciplinary Research Institute Pvt Ltd </p><p>132 </p><p>South -Asian Journal of Multidisciplinary Studies (SAJMS) ISSN:2349-7858:SJIF:2.246:Volume 3 Issue 5 </p><p>Objective </p><p>1. To analyze the development of micro financing in India. </p><p>2. To analyze the entrepreneurship development in the context of microfinance. </p><p> Context of micro finance in India </p><p> From past to present microfinance sector of India reveal the cash-cow growth pattern. It is </p><p>fact that 8 MFI have approval to open small finance bank by reserve bank of India and one MFI </p><p>has already worked as bank. The MFI in India generally covered those areas which are not now </p><p>covered by main stream financial institution and for those it playing a vital role for financial </p><p>inclusion. Now microfinance program have the take up the world wide campaign to provide </p><p>credit to poor by designing product and channels that fulfills the needs of the poor. The </p><p>economic situation and increasing earning of microfinance institution reveal that poor had great </p><p>repayment potential and also reveal by extension of its credit to women. at the end of March </p><p>2015 478 MFI were functioning in 33 state including Union Territory and 568 District in India </p><p>and has been reach to 33 million clients with 490 billion credit portfolio among them 40 percent </p><p>functioning in southern region and 25 percent in eastern region. The contribution of NBFC-MFI </p><p>is 85 percent of the total clients and 88 percent of the outstanding portfolio further remains </p><p>contributed by NGO-MFI. The 97 percent of the client of MFI is women and 67 percent is urban </p><p>at the end of 2015 March. </p><p>Region wise Selp-Help Group across the country </p><p> According to report of status of microfinance in India 2014-15 ( NABARD) there are every </p><p>region of India except southern region have good potential to open SHGs because huge range of </p><p>village are not covered by existing SHGs in that region. In the northern region of the country </p><p>360858 SHGs is currently functioning but several village was not covered by them and and </p><p>potential of the region to formation of new SHGs is around 680628. The north eastern region of </p><p>the India has also good potential of new SHGs formation around 162643. Present time 333981 </p><p>SHGs is functioning in this region. The number of functioning SHGs in eastern region of the </p><p>country is 1524614. Here it is notable that it covering only half of total need of SHGs in the </p><p>region. The region has great potential to new SHGs formation around 1450466 that is second </p><p>biggest potential to open new SHGs. This region has major market for SHGs across all regions in </p><p>the country. The central region of the country has 817251 SHGs. That cap only small portion of </p><p>the potential of the region. The region has biggest potential of new SHGs formation across the </p><p>entire region of the country, which is number of 1793117. The western region of the country has </p><p>second greater number of SHGs. Now 941144 SHGs is working in this region. The potential of </p></li><li><p>*Assistant professor, Department of Business management IGNTU Amerkantak MP. </p><p>**Research Scholar, Department of Business management IGNTU Amerkantak MP. </p><p>Copyright Universal Multidisciplinary Research Institute Pvt Ltd </p><p>133 </p><p>South -Asian Journal of Multidisciplinary Studies (SAJMS) ISSN:2349-7858:SJIF:2.246:Volume 3 Issue 5 </p><p>formation of new SHGs in the region is 246033. The region has second lowest potential for new </p><p>SHGs formation across entire the region of the country. The southern region of the country is </p><p>rich and enough by number SHGs. The region has 3719621 SHGs as on 31 March 2015. Number </p><p>of SHGs in the region is more greator than scenario of SHGs among all the region of the country. </p><p>It is only one region of the country which has enough number of SHGs by number of population. </p><p>The region has zero potential for new SHGs formation. </p><p>Table-1: Region wise context o f SHGs in India: </p><p>Sl. No. Region No. of SHGs Potential for SHGs formation </p><p>1 Northern region 360858 680628 </p><p>2 North eastern region 333981 162643 </p><p>3 Eastern region 1524614 1450466 </p><p>4 Central region 817251 1793117 </p><p>5 Western region 941144 246033 </p><p>6 Southern region 3719621 0 </p><p>7 Total 7697469 4332887 </p><p>Source NABARD (2014-15) status of microfinance in India </p><p>Progress of Micro Finance Program </p><p>5%4%</p><p>20%</p><p>11%</p><p>12%</p><p>48%</p><p>No. of SHGs Northern region</p><p>North eastern </p><p>region</p><p>Eastern </p><p>region</p><p>Central </p><p>region </p><p>Western </p><p>region</p><p>Southern </p><p>region</p><p>16%4%</p><p>33%</p><p>41%</p><p>6%</p><p>0%</p><p>Potential of SHG Northern region</p><p>North </p><p>eastern </p><p>regionEastern </p><p>region</p><p>Central </p><p>region </p><p>Western </p><p>region</p><p>Southern </p><p>region</p></li><li><p>*Assistant professor, Department of Business management IGNTU Amerkantak MP. </p><p>**Research Scholar, Department of Business management IGNTU Amerkantak MP. </p><p>Copyright Universal Multidisciplinary Research Institute Pvt Ltd </p><p>134 </p><p>South -Asian Journal of Multidisciplinary Studies (SAJMS) ISSN:2349-7858:SJIF:2.246:Volume 3 Issue 5 </p><p> The National Bank of agricultural and Rural Development (NABARD) still continues to </p><p>extend credit to NGOs, RRBs, district central Cooperative Bank and Individual Rural Volunteers </p><p>(IRV) for accelerating and fostering the SHGs. The NABARD sanctioned 88.36 crore to these </p><p>institutions during 2014-25 in the form of financial assistance. A 339.83 crore cumulative grant </p><p>sanctioned to various agencies to promote the 7.19 Lakh SHG until the end of March 2015. As </p><p>on 31 March At the end of March 2015 93.77 crore grant sanctioned to 4.85 newly formed </p><p>SHGs. The Non-Government Organization (NGO) worked as most dominant player to promote </p><p>SHGs. NABARD is helping them to train and enhance the capacity of the stakeholders by </p><p>various microfinance programs. It has conduct 4402 training programs to train around 1.61 Lakh </p><p>individuals, stakeholders during 2014-15. As on 31 March 2015 around 33.28 individuals was </p><p>trained that playing as a strong back up group for execution of the program. It is impressive that </p><p>around 1087 training program with 31073 participants were conducted by the assistance of </p><p>Women Selp-Help Group (WSHG) fund. Although, government and Reserve Bank of India is </p><p>continue to emphasizing to to promote SHGs-BLP for financial inclusion like Prime Ministers </p><p>Jan Dhan Yojana. Despite of that all, the government of India continue all poverty eradication </p><p>programs by means. </p><p> Table 2: Growth of Bank Linkage SHGs: </p><p> S </p><p>.No. </p><p>Year No. of Selp- Help Group Linked to </p><p>bank </p><p>Growth rate </p><p>1 1998-99 18678 ----------- </p><p>2 1999-00 81780 337.84 </p><p>3 2000-01 149050 82.5 </p><p>4 2001-02 197653 32.60 </p><p>5 2002-03 255882 29.46 </p><p>6 2003-04 361731 41.36 </p><p>7 2004-05 539365 49.10 </p><p>8 2005-06 620109 14.97 </p><p>9 2006-07 1105749 78.31 </p><p>10 2007-08 1227770 11.03 </p><p>11 2008-09 1609586 31.09 </p><p>12 2009-10 1586822 -1.41 </p><p>13 2010-11 1196134 -24.62 </p><p>14 2011-12 1147878 -4.03 </p><p>15 2012-13 1219821 6.26 </p><p>16 2013-14 1366421 12.01 </p><p>17 2014-15 1141208 16.48 </p><p>Average 1107443.35 44.55 </p></li><li><p>*Assistant professor, Department of Business management IGNTU Amerkantak MP. </p><p>**Research Scholar, Department of Business management IGNTU Amerkantak MP. </p><p>Copyright Universal Multidisciplinary Research Institute Pvt Ltd </p><p>135 </p><p>South -Asian Journal of Multidisciplinary Studies (SAJMS) ISSN:2349-7858:SJIF:2.246:Volume 3 Issue 5 </p><p> The table-2 reveals that the growth rate of Bank linkage SHGs is 337.84 in 1990 and 16.48 in </p><p>2015 with the average of 44.55. The progress of microfinance in the context of selp-help group </p><p>with Bank Linkage Program is the good indicator of progress of microfinance. Under the selp </p><p>help group bank linkage program 13839954 SHGs had linked at the end of 31 March 2015 and </p><p>they had loaned by Rs. 11575.98 billion during the year even they refinanced by Rs. 312.66 </p><p>billion as on 31 March 2015. The huge amount of lending by microfinance institution to SHG </p><p>and again refinance them if they had need show that there is immense opportunity to expand the </p><p>field of microfinance market in the country. The Selp- Help Group Bank Linkage Program </p><p>(SHG-BLP) was first initiated on pilot scale in 1992 has expanded significantly. At the end of </p><p>March 2014 it reached to 74.30 Lakh saving linked SHG that cover over 9.7 crore poor </p><p>households with the saving of 9897.42 crore. 41.97 Lakh credit linked with SHG under the </p><p>program. Table 3: Growth of Bank Loan to SHGS </p><p> (Amount in Billion) </p><p>S . No. Year Bank Loan to SHGs </p><p> (in billions) </p><p>Growth rate </p><p>1 1998-99 .33 ------------- 2 1999-00 1.36 312.12 3...</p></li></ul>

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