Cooperative banks: Pioneer leader in extending micro finance to tribal women

Financing to the rural poor through formal financial services failed to meet the credit requirements of the rural poor people. The main cause of failure was nonappearance of any recognized employment and hence absence of collateral with the poor. The high risk and the high transaction costs of banks associated with small loans and saving deposits are other factors which make them non-bankable. The lack of loans from formal institutions leaves the poor with no other option but to borrow money from local money-lenders on huge interest rates. In different countries including India, efforts have been made by their governments to deliver formal credit to rural areas by setting up special agricultural banks/rural banks or directing commercial banks to provide loans to rural borrowers. The study highlighted the role of cooperative banks to provide Micro finance in rural areas of India.