Micro finance – role of banking intermediaries in inclusive economic growth

Micro finance is most challenging financial act of modern banks in India. It is a scaleable anti-poverty solution to rural credit barriers. The main objective of this study is to conceptualize the operational methodologies for formal microfinance institutions in rural India. The study reflects the supply of customized financial products that are offered by public and private sector banks in India. The study explains the different initiatives of banks product and approach differentiation towards micro finance. The study analyses the banks product design and customization of microfinance procedures and attempts to understand the concepts behind the credit customization. Under this study, microfinance product structure and innovations of banking institutions were reviewed. The success or failures of funding structure, product mix and product innovation were discussed. The study also reveals the success of SHG revolution and the degree of success contributed by product substitution and product innovation in banking Microfinance in rural India. It also reveals the challenges for banking institution in offering financial services for rural India.