A Theoretical Evaluation of the Microfinance and its impact on Living Standards and Poverty Reduction in India

Abstract

One definition of microfinance is "any activity that includes the provision of economic services like loans, saving, and coverage to low-wage earners who are slightly over the nationally defined shortfall line and to poor people who are below that shortage line with the aim of fostering public value." Microfinance can also be defined as "any activity that includes the provision of economic services like loans, saving, and coverage to low-wage earners who are slightly over the nationally defined short In this study, an attempt is made to conduct a theoretical evaluation of the impact that microfinance has had on living standards and the reduction of poverty in India. In order to produce an assessment of the influence of microfinance on living standards and the reduction of poverty in India, secondary reports are analysed and evaluated. Research in the natural world is qualitative and descriptive. According to a recently published study, microcredit and microfinance have gained widespread acceptance as a strategy for reducing poverty and increasing economic autonomy. Microfinance is a strategy that may be used to combat poverty, particularly in rural regions, which are home to the majority of the world's poorest people. Give individuals with low incomes the opportunity to start their own small businesses by extending them modest sums of financing at reasonable interest rates. Numerous studies show that despite their socioeconomic status, impoverished individuals have greater rates of loan payback than other types of borrowers.