Microfinance, today, has become one of the most debated and documented topics but is still a very much confused buzzword in the banking sector. In the most simplistic way, it can be explained as `banking for the poor'. As the name implies, most transactions under `microfinance' involve small amounts of money. The term actually has a much wider meaning. It is claimed to be a powerful tool, which can be used effectively to address poverty, empower the socially marginalized poor and strengthen the social fabric. And when it is directed at women, the benefits accruing out of the microfinancing activities are expected to multiply manifold. That is why it is supposed to be changing lives of those associated with it. Today, microfinancing is considered a more pragmatic way of providing financial assistance to the less privileged.

In India, microfinance has been defined as provision of thrift, credit and other financial services and products of very small amounts to the poor in rural semi-urban or urban areas for enabling them to raise their income levels and improve living standards.

Professional Banker Magazine, Microfinance, Banking Sector, Financial Services, Financial Products, Credit Disbursement Mechanism, Indian Banking Industry, Non-Government Organizations, NGOs, Commercial Banks, Banking System, Rural Credit Markets, Rural Development, Agricultural Development, Financial Liberation.