THE ROLE OF MICROFINANCE IN POVERTY REDUCTION: AN ANALYSIS USING STATISTICAL TOOLS

This study looks at how microfinance helps to reduce poverty in India. It focuses on two key financial indicators: the amount of the loans disbursed to self-help groups (SHGs) and the savings these groups have with banks. Using the official data from NABARD for the year 2022-23, the research analyzes how these two numbers are connected. The findings show a strong link between higher microfinance loan amounts and increased savings among the end users, suggesting that microfinance can help people earn more and become financially stronger. However, the results also show that not everyone benefits equally. Some regions and groups do much better than others, and long-term poverty reduction depends on many other factors like training, support systems, and proper use of loans. The study recommends improving financial literacy, tracking loans use more carefully, and offering more than just credit – like savings, insurance, and business support. Microfinance has real potential, but to truly reduce poverty, it needs to be part of a bigger, more supportive system. Keywords: Microfinance, Poverty Reduction, India, Self-Help Groups, SHG Savings, NABARD, Financial Inclusion, Income Generation, Regional Disparities, Over-Indebtedness, Financial Literacy.