Why Private Sector Led Financial Inclusion Cannot Work for Development?  Case of Micro Credit in India

Seema Sahai; Rupamanjari Sinha Ray; S K Tapasvi

doi:10.46281/ijfb.v4i1.482

Seema Sahai Research Fellow, Public Policy, Management Development Institute, Gurgaon, India
Rupamanjari Sinha Ray Assistant Professor, Economics Area, Management Development Institute, Gurgaon, India
S K Tapasvi Professor, Public Policy, Management Development Institute, Gurgaon, India

DOI: https://doi.org/10.46281/ijfb.v4i1.482

Keywords: Microfinance, Financial Inclusion, Impact of Microfinance, Microenterprises.

Abstract

This paper analyzes the potential of the private sector-led micro-credit business to impact poverty. Despite the financial and policy support by donor agencies and multilateral agencies microcredit has not been able to create a positive impact on household income. The study concludes that the credit policy of private sector providers is not designed to create a substantial impact. Microcredit is a business model for doing business with the poor. All aspects of a credit policy including selection criteria, appraisal process, and product offered, and loan amount serves the interest of the lender and not that of the client.

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