MICRO FINANCE

Micro finace is nothing but small financial assistance provided to small entrepreneurs for undetaking productive activities.The task force on micro finace set up by NBARD has given the following definition of micro finace.
''Micro finance is provision of thrift,credit and other financial services and products of very small amounts to the poor in rural,semi-urban and urban areas for enabling them to raise their income levels and for improving living standards.''
Micro finance can be an effective tool for poverty alleviation in rural semiurban and even urban areas.It can be a tool for promoting entrepreneurship and expanding productive activities.
The micro credit concept got evolved in the eighties with the birth of NABARD.Almost all banks are participating in micro credit delivery.These banks are commercial balks,co-operative banks, and regional rural banks.Finacing can be under any one of the models.Under model-Ibanks provide micro finance to non-governmental organisations[NGOs]for the purpose of on-lending to self-help groupsand ultimately to small entrepreneurs.Under model-II banks provide direct finance for on-lending to small entrepreneurs.Under model-III banks banks finance directly to SHGsfor on-lending to small entrepreneurs with the intervention of NGOs and social organisations.
Micro credit has the potential to become an effective weapon for eradication of poverty.It is a potent weapon of development.Innovative and hard working entrepreneurs can start their own business ventures or other productive activities and earn decent income.They can enjoy better life,food shelter and also better health care.Micro finance is capable of playing a catalyst role in empowering women by organising them in to self help groups.The cardinal principles for the success of micro finance are hard work,education,health care etc.
MICRO CREDIT FOR HOUSING
The National Housing Bank has launched an all India scheme for extending micro credit to ruarl poor to build houses.The scheme was recently launched by Union Finance Ministewr sri P.Chidambaram in Sivaganga,Tamil Nadu.This was launched for the benefit of members of self help groups in Sivaganga,Pudukottal,and Nilgiris in Tamil Nadu.The scheme would be launched in Karnataka and Andhra Pradesh shortly .
The scheme will be extended in stages to other states.Under the scheme beneficiaries will get loans between Rs 50,000 to Rs 100000for buiding houses.The beneficiary must have his own plot of land for building house.Borrowers need not bring any margin money.Repayment will commence after one year.The loan will be guarnteed by self help groups and will have to be cleared in 84 months.As indicated by Finance Minister Sri Chidambaram it is proposed to construct 15 lakh houses in rural areas under the scheme.