Question

Critically appraise the micro-credit programmes in rural India.

Hint:

Micro-credit helps rural poor access small loans, but needs better coverage and terms for large-scale impact.

Answer 1

Micro-credit programmes in rural India have played an important role in providing small loans to rural households, especially women and self-help groups, without collateral. Key points:
Positive Impact: They promote financial inclusion, empower women, support small businesses, and help reduce poverty.
Limitations: The loan amounts are often too small to support substantial business ventures. Interest rates can also be high in some cases, limiting their benefits.
Conclusion: While micro-credit programmes have empowered many rural poor and fostered entrepreneurship, their scale, coverage, and credit terms need improvement to make a significant long-term impact.