Microfinance
in India, like in many other parts of the world, is not just a tool for
financial inclusion, as has been noticed through thousands of case studies.
Even though the mission started off as one to include those people who are not
serviced by commercial banking channels by providing them with unsecured loans,
over time MFIs have turned out to be a conduit for social change, particularly
in a country like India, where a large percentage of the population live in
poverty.
At
the policy level, MFIs have emerged as more legitimate with the government in
terms of being an important platform that provides financial inclusion and
spreads financial literacy. While this has found reflection in MFIs getting
more mention in important policy documents, MFIs have also achieved success in
initiating a form of social engineering that is not always noticed.
Keeping
in mind that in India, still only around 26 percent women are employed, even
till a few years back a large number of women from rural areas hardly ever
stepped out of the house, the thought of starting their own business being a
far cry.
MFIs
have substantially changed the situation, with 99 percent of loans having gone
to women. A number of surveys, conducted by leading firms such as PWC, have
revealed that over 90 percent borrowers recorded improved financial condition,
not just for them but also for their families, particularly for their children.
The
money these borrowers earned through their MFI-backed enterprises led them to
not just significantly higher income but also better decision making processes.
Nearly 60 percent borrowers got access to proper toilet and sanitation facilities
at home, along with other modern day amenities like ceiling fans, cell phones,
television sets and refrigerators. Almost all the women also admitted to having
increasedtheir confidence after getting associated with MFIs, besides showing
an increase in their standing within the family.
Micro-loans do not just help create a livelihood
for the whole family of a borrower but the impact of the decision is reflected
even in other aspects of their lives. Almost all women who started businesses
with loan from MFIs also admitted to having access to better healthcare for
their families and better education for their children, with the latter helping
to substantially bring down underage marriages for girls, whose mothers have
been associated with MFIs. 
