Savings-led Micro-finance to Bank the Unbankables: Sharing of Global Experience

Based on the 'Grameen Bank Model' evolved and developed in Bangladesh, several countries in Asia, including India, and elsewhere in the world have emulated, replicated and modified the original model of micro-finance to suit local conditions and enhance mass acceptability. In India, among various models tried and tested, the one evolved and successfully demonstrated by the National Bank for Agriculture and Rural Development (NABARD) and some leading non-governmental organizations (NGOs), is based on a 'linkage programme' linking self-help groups (SHGs) with banks and other financial institutions through the intermediation of NGOs. This article attempts to highlight the genesis and evolution of the micro-finance system, importance of self-help groups as central to micro-finance core activities, the distinctive role of banks (viz. commercial, private and cooperative) in credit mobilization and delivery systems and the role of NGOs intermediaries and facilitators, etc. Global experiences concerning the unique positioning perspective of micro-finance in banking the unbankables-both in the developing and underdeveloped economies in the world, with a focus on Asia, have also been highlighted to provide an insight into the potential of micro-finance in alleviating rural poverty at large and in improving employment opportunities to the non-bankables on a sustainable basis.