Issues and Challenges of Micro-Finance Institutions in India

Abstract

It has been observed that now, especially after demonetization; Microfinance is playing a crucial role in the development of
country at its own risk. This paper represents the microfinance different issues and challenges that are faced by poor people in
India as well as the positive and negative role played by the financial institutions against such poor people. The prime
objective of this study is to identify the problems associated with MFIs and micro-creditors or borrowers with special
reference to small loaning and also to identify various suggestive measures to tackle such challenges. The study is purely
based on descriptive research and it is supported with secondary data that has been collected from different sources such as
online journals, articles, newspaper etc. This paper tries to discovers the prevailing gaps in functioning of MFIs such as
practices in registration issues, promoters issues, management issues, dissatisfaction issues, recovery of loan issues and other
challenges like over indebtedness, higher rate of interest in comparison to mainstream banks and lack of enough awareness
against availability of such financial services across the country.