Citation:

Anoushka Singh, Dr. K.L. Maurya. "Microfinance through Self Help Groups and Rural Development- A Short Review Article" International Research Journal of Economics and Management Studies, Vol. 5, No. 7, pp. 139-146, 2026. Crossref. http://doi.org/10.56472/25835238/IRJEMS-V5I7P118

Abstract:

Since the introduction of national plans, subsequent governments in independent India have emphasized the correlation between enhancing financial access and alleviating poverty, a position that has exerted global influence. The necessity to enhance financial accessibility for India's impoverished population, predominantly situated in rural regions, prompted the development of innovative microfinance strategies. This includes a nationwide initiative, initially led by non-governmental organizations (NGOs) and currently endorsed by the government, aimed at establishing connections among commercial banks, NGOs, and informal local entities known as 'self-help groups' (SHGs). Commonly referred to as 'SHG Bank Linkage', this methodology has experienced significant growth over the previous decades. Microfinance has become one of the most successful interventions for the economic empowerment of the poor in the development paradigm. It has developed as a need-based program for poverty reduction and empowerment of the previously overlooked target groups (women, poor, underprivileged, etc.). Experience in India and other nations has demonstrated that microfinance has a strong potential to integrate with development challenges, greatly improving the lives of the impoverished. This paper provides a brief overview of literature of microfinance, SHG delivery model of microfinance, and its role in rural development. Researchers studying SHG and microfinance will benefit from this paper's careful analysis of the numerous empirical studies conducted in India and abroad.

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Keywords:

Microfinance, SHG, Financial Inclusion, Rural Development.