Role of Microfinance and SHG-Bank Linkage Programme in Rural Economic Development and Poverty Alleviation
DOI:
https://doi.org/10.69996/fmep.2026018Keywords:
Microfinance, SHG-Bank Linkage Programme, Rural Development, Poverty Alleviation, Financial Inclusion, Women Empowerment, Sustainable LivelihoodAbstract
Microfinance and Self-Help Group (SHG)-Bank Linkage Programmes have become important instruments for rural economic development, poverty alleviation, financial inclusion, and social empowerment in India. The SHG-Bank Linkage Programme introduced by NABARD has significantly improved the socioeconomic conditions of rural households by providing access to institutional finance, entrepreneurial opportunities, and income-generating activities. The present study critically examines the role of SHGs and microfinance in rural development with special reference to poverty reduction, employment generation, financial literacy, savings practices, repayment systems, and women empowerment. The research is based on primary data collected from SHG members and analyzed through statistical tools including reliability analysis, factor analysis, ANOVA, and regression analysis. The findings indicate that SHGs significantly contribute to economic stability, entrepreneurial growth, social awareness, and sustainable livelihood opportunities. The paper concludes that microfinance and SHG-bank linkage programmes have become powerful mechanisms for inclusive rural development and long-term socioeconomic transformation.
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