Empowerment of women through micro finance: A boon for development of economy

Microfinance sector has traversed a long journey from micro savings to micro credit and then to micro enterprises and now entered the field of micro insurance, micro remittance and micro pension. There is growing interest in microfinance as one of the avenues to enable low income population to access financial services. India with a population of around 300 million poor people has emerged as a large potential opportunity for the microfinance sector. With only 48% of the Population accessing financial services, expanding the microfinance sector is also important from the perspective of financial inclusion (World Bank, 2008). Since 2004, the Reserve Bank of India (RBI) has emphasised financial inclusion as an important goal. Microfinance is emerging as a powerful instrument for poverty alleviation in the new economy. In India, Microfinance scene is dominated by Self Help Group (SHGs)-Bank Linkage Programme as a cost effective mechanism for providing financial services to the “Unreached Poor” which has been successful not only in meeting financial needs of the rural poor women but also strengthen collective self help capacities of the poor,leading to their empowerment. Rapid progress in SHG formation has now turned into an empowerment movement among women across the country. Empowerment is the state of feelings of self-empowered to take control of one's own destiny. Empowering women puts the spotlight on education and employment which are an essential element to sustainable development. The paper looks at the impact of Micro finance with respect to poverty alleviation and socioeconomic empowerment of rural women. An effort is also made to suggest the ways to increase women empowerment.