The impact of microfinance on socio economic upliftment of economically weaker section of Ranchi District

Over the last two decades microfinance has emerged as a powerful tool to combat poverty.A number of past studies have reiterated the fact that the poor are credit worthy. They have exceptional talent, integrity and are assiduous in any livelihood activities which they undertake. However the major constraint faced by them is financial awareness, financial literacy and provision of hassle free credit. Provision of credit through the SHG bank linkage programme aims to address these issues. Jharkhand has a majority of tribal population and is one of the most backward states in the country. Population of Jharkhand has registered an increase of around 60 lakhs in ten years i.e. from 2001-2011[1] and with this trend of increase in population around another 300 lakhs will be added in next 50 years. Creation of white collared jobs to absorb such population would be challenging. Self-employment is the only way out to make the vulnerable people self-dependent, who otherwise resort to violence and terrorism in absence of employment.Most of the government credit programs have a ‘stillbirth’ and availing bank finance becomes a herculean task for the unbanked.The marginalized should be provided with avenues and opportunities to set up micro enterprises. While a considerable number of studies on microfinance have been done in other parts of the country, merely a few quantitative studies have been done in the state of Jharkhand. This also justifies the low impact of the programin this state compared to its southern counterparts. This paper aims to study the impact of microfinance on the socio economic upliftment of the poor in Ranchi district of Jharkhand state. It also aims to diagnose the problems and suggest suitable remedial actions to all stakeholders involved.