TO STUDY THE IMPACT OF MICROFINANCE INSTITUTIONS ON THE BELOW POVERTY LINE FAMILIES
Microfinance was known since mid of 1800s when the theorist Lysander Spooner wrote about the benefits of small credits to farmers and other rural poor. He also studied about poverty alleviation of farmers.
Today use of the microfinance term has roots in the 1976, when Grameen Bank of Bangladesh took birth with the foresightedness of Mohammad Yunus. He understood the financial need of rural population in Bangladesh and shaped this Microfinance Industry.
The main problem with poor population was that, they do not have any collateral for the loan, so Mohammad Yunus designed a group model. Groups were made on the basis of mutual trust and for repayment, peer help and pressure was used. His effort brought social and economic development. Microfinance, these days has been adopted by many developing and under developed countries for poverty eradication.