An Empirical Study of the Current Microfinance Landscape in Rural Financial Systems

The rural sector is quite important in the Indian economy, and it has either directly or indirectly affected all economic activity of the country.Despite the crucial role of rural sectors, it faces many challenges such as poverty, illiteracy, and poor health, which are all more prevalent in rural areas.Thus, the present research paper emphasizes on the current microfinance landscape in rural financial systems and approach of beneficiaries towards the access of microfinance.Present research work primarily covered rural areas across Western Maharashtra i.e.Kolhapur, Sangli, Satara, Solapur and Pune.Overall, the survey covered 1020 households (HH) across 102 villages spread over 17 tehsils from 5 districts.Out of 1020 households, 237 households have received loan from microfinance institutions.Study finds that, loans received from microfinance institutions stands fifth position among the different sources of rural finance.Females are ahead towards taking loan from microfinance, educational background of beneficiaries is less than 10th standard, majorly housewife's and agriculturists and low annual income respondents are taking loans, and other than general category respondents are the key beneficiaries of microfinance.Less documents required, early availability and immediate disbursement, no need of mortgage and easily available of loan are the key attracting reasons while approaching towards the microfinance.