Asia Pacific Journal of Research Vol I Issue XV, July 2014.pdfVIP

Asia Pacific Journal of Research Vol: I Issue XV, July 2014 ISSN: 2320-5504, E-ISSN-2347-4793 MICRO FINANCE AND POVERTY REDUCTION IN INDIA:-ISSUES AND CHALLENGES Dr. G. Srinivasa Rao, Professor Principal, Aditya Institute of P G Studies, Kakinada –533003 G. Ramesh, Assistant Professor, Dept. of Management Studies, Samata College, Visakhapatnam-17 Introduction Poverty and Unemployment are the major problems of underdeveloped countries to which India is no exception. India suffers from substantial poverty. The Planning Commission has estimated that 27.5% of the population was living below the poverty line in the year 2004-2005. The criteria used were monthly per capita consumption expenditure below Rs. 356.35 for rural areas and below 538.60 for urban areas. About 71 percent of the poor are in rural areas and most of them are daily wage earners, self-employed, households and landless labourers. The impact and implication of this position possesses a great challenge for the country to overcome poverty and to have an equality distribution of National Income. Key Words: Micro Finance, Poverty Reduction, Self Help Groups, Women Empowerment, Joint Liability Groups In this scenario microfinance has emerged as a cost-effective and efficient way for reducing poverty. Microfinance has proven to be an effective and powerful tool for poverty alleviation. The term Microfinance refers to the provision of financial services to lower income groups, which also include self- employed people. Grameen Bank in Bangladesh introduced the concept of microfinance and now it is a worldwide movement as it was replicated in many countries. This