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The role of microfinance in
expanding the delivery of financial services, especially to the poor,
has been widely discussed and the discussion continues in this 'Year
of Microcredit'. Although expectations of poverty reduction and
women's empowerment are widespread, key questions about who
microfinance reaches and what it can achieve are still open.
This study of 20 Microfinance
Institutions reviews these questions in the 'maturing' Indian
microfinance industry. Of interest for policy-makers, donors,
microfinance practitioners and researchers, the findings highlight the
provision of financial services by MFIs as beginning to fill the gap
between the banks (low interest rates on credit, but limited access
and high transaction costs) and informal moneylenders (higher interest
rates, but accessible and fast). The challenges remain of extending
provision of microfinance to underserved and poorer areas, and
adapting services to cater to the varied financial needs of the poor.
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