Pioneered by Bangladesh's visionary Economist and Banker, microfinance leads the fight against poverty. In a fitting tribute to the relevance of bringing about peace with poverty alleviation, the Noble committee awarded the peace prize to Muhammad Yunus.
Wikipedia defines Microfinance as a term used to refer to the activity of provision of financial services to clients who are excluded from the traditional financial system on account of their lower economic status . It is specially relevant to India because of its huge poor population.
In India, banks lend microcredit through self help groups (SHG). There are more than a million SHGs and it is the biggest program in the world with total loan of more than Rs 7000 crore benefitting 2.42 crore families ( Source: TOI, Mumbai, 14.10.2006)
Grameen Foundation, an international group of people inspired by the work of Grameen Bank, Bangladesh has the mission is to empower the world's poorest people to lift themselves out of poverty with dignity through access to financial services and to information. Their global network of microfinance partners reaches 2.2 million families in 22 countries.
In Insurance, LIC has entered into an MoU with the Confederation of NGOs in Rural India which would implement a microinsurance scheme with its network of more than 3,000 NGOs/SHGs. The scheme, named Jeevan Madhur, is a modest savings-linked life insurance plan where one might disburse premiums regularly at weekly, fortnightly, monthly, quarterly, half-yearly or yearly intervals over the term of the policy with minimum and maximum sum assured of Rs 5,000 and Rs 30,000.