Microfinance is Bridge the Gap Regional Disparities in Banking Service in North-East India

Author(s): Sheikh Lutfor Rahman

Abstract:

The banking industry is very important to the development of the country. To achieve the goal of financial inclusion, organizations ranging from regional to global levels have taken steps over the years to bring unbanked populations into the banking system. Regulators regularly ask banks and financial institutions to strengthen their banking offerings. According to international statistics and country-level data, a significant portion of the population is still not eligible for banking services. This study examines geographic differences in bank performance assessments across regions in relation to increased bank coverage in this context. The northeastern and northern regions lag far behind in terms of the expansion of banking services between regions. Due to the low bank penetration, the statistics also show a stronger growth trend in the northeast region. Many advanced credit delivery technologies have been developed to provide loans to rural areas. The microfinance program has made impressive progress, but the uneven expansion of microfinance is worrisome as it appears that most of the progress has been made in the south and west of the country. According to the study, microfinance performance is essentially a seven-dimensional trait. First and foremost is related to “Microfinance spillover”, followed by “Microfinance depth”, “Saving behavior”, “SHPIs performance”, “Corporate-microfinance performance”, “Performance of financial institutions” and “SGSY financial enhancement”. It is SGSY that provides loans and grants to apply for a micro business.

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