Microcredit Delivery Models in India

Abstract

Over the past few decades, several informal and innovative systems to finance the poor in a sustainable manner have been experimented with in several developing countries. India, however, has no clear winner in this regard. Microcredit is a small loan given to poor people to encourage self-employment projects that generate income and raise their standard of living. Microcredit has been defined by the Microcredit Summit, 1997, as a "programme that provides credit for self-employment and other financial business service (including saving and technical assistance) to very poor persons." Microcredit is based on the premise that skills among the poor largely remain unutilised or underutilised.