Development of self-employment and micro-enterprises, with the support of microcredit, makes it possible to transform the poor into wealth creators. Microfinance institutions know that their primary mandate is to raise the unbanked poor out of the depths of poverty. But what we normally do not talk of when discussing the effect of microfinance is that the work of MFIs also helps lower the unemployment numbers. This happens in many ways.
• Employment opportunities created directly in the NBFC-MFIs, banks, small finance banks and NBFCs;
• Self-employment opportunities through microcredit disbursements as a part of the primary business model;
• Jobs in the microenterprises as they grow;
• Self-employment and jobs created in the supply chain of the microenterprises.

In the last financial year, the NBFC-MFIs reported a staff headcount growth of 34% over the previous year. The quality of skills also improved as digital technologies opened up career growth opportunities for MFI employees.

The number of loans disbursed grew by 28%, indicating that self-employment through microenterprise initiatives is increasing. What is more encouraging is that the total loan amount disbursed increased by 44%. This indicates that the microenterprises are individually growing in their operations and what was primarily a family-run operation, may have to start employing from outside the family.

Lastly, but not to be ignored, are the businesses that sprout to supply raw materials to the MFIs’ customers and become their logistics providers. This has traditionally been a virgin market as it was always assumed that rural products would reach their consumers through a complicated network of distribution.

However, with online marketplaces opening up a direct sales channel for micro businesses, the need for organized supply chain providers has increased steadily—and so have the employment opportunities.

Going by the data, we can find microfinance outgrowing its primary mandate of poverty alleviation through self-employment and is graduating into a job creator.