A Review Study on the Impact of Microfinance on Entrepreneurship Development in India
“From each according to one’s ability to each according to one’s needs”(Marx,1964) ,accentuates the desideratum of economic justice. Financial inclusion is a facet of economic justice that makes growth inclusive and entitles economic agents to make long term consumption and investment decisions and contribute towards economic growth. In a country like India where most of the rural population is deprived of financial security it is important to provide security to them as well as extend the facilities of the organised sector to effectuate financial inclusion Also, financial inclusion enables them to cope up with unexpected financial shocks. The augmentation of microfinance however does not reveal that whether the very aim self sustainability by fostering entrepreneurship has been achieved or not. it is quite perceptible that microfinance ameliorates consumption smoothening or dealing with financial shocks but whether or not it has emerged as a significant tool in establishing new enterprises is a major issue .The significance of the study lies in the fact that there still exists evidences where microfinance notably microcredit has failed in various aspects. It is important to study such aspects as credit might be taken for other purposes which might worsen the situation of the poor. Instances where microfinance has not helped in self sustainability of the poor need to be analysed as even a single action taken in such arena might severely affect the lives of the poor people. The paper deals with an analysis of the impact of microfinance on the establishment of new businesses by poor people. The study is also important as it paves the path for understanding how the impact differs in various situation and the underlying reasons behind it. This also indicates that it is important for the MFIs to assess the situation of the borrower and proceed accordingly.
Keywords - Microfinance, Self-Sustainability, MFI, Entrepreneurship