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Microfinance: A tool for Reverse Migration?

So far a little effort has been done to mitigate the rural poverty within India and around the World as well. Since inception of the developed world and market, the main thrust of the labour pool has been channelized to the cities from the semi urban and rural areas. Some governments have done significant amount of business to lessen the burden of the prime cities. This is specifically true for the developing nations. At the same time local NGOs, and other NBFCs have invested considerable amount ($25 billion) to the local Microfinance Institutions to raise the people from the abject poverty. This has motivated the funding agencies and private equity investors to invest more probably in geometric progressive fashion in to the MFIs (need $250 billion). However some loopholes do exists in terms of the repayment of the loan taken. In fact it is quite obvious that one loan has been meeting up by taking another. So it could be a vicious cycle of interest burden.

The approach could be think of in a different manner. If we can teach the cycle as to how the people should sell out the products with the technical and financial assistances, we really can shift the poverty gear. Also it is true that once the system starts to work, according to the trickle down theory, development of the rural society is possible and thus ‘reverse migration’ starts. In this regard steps of government is crucial in a sense that once reverse migration starts (according to data), govt. should take necessary steps in building social asset in to the rural areas to keep the process continue.

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