The growth of MFIs in India is a well-documented matter. The success of microfinance is such that it is one of the largest growing sectors in the country, with recent reports finding that microfinance has shown a 64 percent growth over the last three years. And this change is best demonstrated in eastern India, with West Bengal leading the charge, along with Bihar and Jharkhand, besides North-Eastern states such as Assam and Meghalaya. In fact, microfinance has grown by 26 percent over the last fiscal year, with maximum growth being seen in West Bengal, Assam and Jharkhand, as 2018 report by KPMG reveals.

With a large part of rural India remaining out of the purview of formal banking, MFIs have been playing an enhanced role in financial inclusion and financial literacy. Even though many in the formal banking sector had thought microfinance to be moving towards market saturation, ground realities reveal that this growth will continue to sustain over the next two years. Since the presence of formal banking is low in rural areas, the somewhat overwhelming presence of MFIs will remain a groundbreaking factor for microfinance.

It has become apparent that MFIs have not only worked hard but have also emerged the bets channel for bridging a crucial gap between formal banking channels and financial inclusion in far-flung rural areas. VFS is an important showcase of how MFIs have managed the break apprehension that rural India had about the normal banking system. It is a fact on record that MFIs have been showing strong forward-moving motion and by 2020 these are likely to cover most of rural India.

KPMG predicts that projected growth rate will remain between 25 and 30 percent over the next five years in the region. It is imperative that MFIs continue to remain on this journey of transformation, with the help of digital technology so that they can keep adding to the long term sustainable development of Eastern India’s economy.