A Study of the Impact on the Banking Sector on Microfinance in Amravati City
Pushkar Prakash Shirbhate
Student of Master of Business Administration
Sant Gadge Baba Amravati University, Amravati
Abstract
Microfinance has emerged as one of the most effective tools for achieving financial inclusion and promoting socio-economic development among low income and marginalized populations. It provides access to essential financial services such as small loans, savings, insurance, and remittance facilities to individuals who are traditionally excluded from the formal banking system. In developing countries like India, microfinance plays a crucial role in poverty alleviation, employment generation, and women empowerment. Over the years, the microfinance sector has evolved from informal lending mechanisms to more structured institutional frameworks involving Self-Help Groups (SHGs), Microfinance Institutions (MFIs), Non-Governmental Organizations (NGOs), and formal banking institutions.
In recent years, the banking sector has increasingly entered the microfinance domain due to regulatory support, government initiatives, and priority sector lending requirements. This has significantly transformed the microfinance landscape by improving credit availability, affordability, and institutional sustainability. The present study examines the impact of the banking sector on microfinance in Amravati City, Maharashtra. Amravati is a semi-urban city with a large informal workforce, making it a suitable area for analyzing the interaction between banks and microfinance institutions.
The study uses both primary and secondary data to assess accessibility, borrower satisfaction, repayment behaviour, and operational challenges. The findings reveal that banking sector participation has positively influenced the growth and outreach of microfinance in Amravati City. However, procedural complexity, documentation requirements, and limited financial literacy remain major challenges. The study concludes that a collaborative approach between banks and microfinance institutions, supported by financial education and simplified procedures, is essential for strengthening inclusive finance.
Keywords: Microfinance, Banking Sector, Financial Inclusion, SHGs, MFIs, Amravati City.
