Financial Inclusion through Microfinance Health Insurance
India is home to the largest population of poor in the world. Microfinance in India has emerged as a powerful tool for financial inclusion. The ‘SHG – Bank Linkage’ programme plays a predominant role in the financial inclusion of poor. The programme is coming up well and being implemented widely across the country. But there is a need to strengthen the SHG-Bank Linkage Programme to fully mainstream it with the commercial banking system. The programme is scaling up at a rapid pace in South India, while the progress in other regions is slow. The variations in performance across the regions, both in terms of reach and quality needs immediate attention.
Lack of knowledge and understanding of services and its attendant policy and processes among the poor population are important factors that impediment their financial inclusion. In other words, financial literacy is critical for financial inclusion. The vulnerable situation faced by the poor like irregular employment, unemployment, seasonality, illiteracy and growing tren...