Microfinance in India and attainment of sustainable development goals

Microfinance plays a critical role in alleviating poverty and promoting global economic and social development. This was emphasized in the 2030 Agenda for Development. In fact, one of the Sustainable Development Goals (SDGs) is to improve access to financial services. They also emphasize the importance of women’s access to financial possibilities, as well as comprehensive access to financial services for everybody. The concept of microfinance has been promoted with the goal of providing funds to people who were considered to be at the bottom of the socio-economic pyramid so that they might run modest household businesses, but it has now expanded as a means of assisting poor people in improving their socio standards. India is the world’s second-most populous country, with more than 60% of the country’s people living in rural areas. More than half of this rural population depend on agriculture or related occupations for living which leads to chronic underemployment and poor per capita income. Poor people have limited access to formalized credit from commercial banks. As a result, they are compelled to rely on informal sources of credit, which exploit them by charging high-interest rates, resulting in their long-term indebtedness. In India, microfinance is critical to the nation’s development. It serves as an anti-poverty vaccine for rural residents by providing basic financial services to the underserved at low costs. The present study aims to highlight the role of microfinance in achieving the SDGs and its challenges and their solution in the Indian context.