ISSN: (Online) 2321 -4155
ISSN: (Print) 2320 -7000

JOURNAL OF INDIAN RESEARCH
YEAR : 2013, VOLUME : 1, ISSUE : 2
 
AN EMPIRICAL TESTING OF RELATIONSHIP BETWEEN MICROFINANCE AND ECONOMIC GROWTH IN INDIA
Dr. G.L. Sharma , Himanshu Puri
 
ABSTRACT
Microfnance is the provision of a broad range of fnancial services such as deposits, loans, payment services, money transfers and insurance to poor & low-income households and micro enterprises. Microfnance sector in India has grown manifolds from its inception. This has given a great opportunity to the rural poor to attain reasonable economic, social and cultural empowerment, leading to better living standard and quality of life for participating households. Microfnance has been a panacea for poverty reduction in India and thus it is profoundly promoted by our fnancial system throughout the economy. Moreover the phenomenon has a two way linkage with economic growth. The present study intends to look into various aspect and try to derive the inter relationship between these two factors. Two variables, i.e. GDP and Micro loans to Self Help Groups (SHG), have been taken for the study. Their annual data from the fnancial year 2006-07 to 2011-12 have been taken for analysis. The tools like coeffcient of correlation and regression have been used to get an insight into the relationship of the selected variables. The result shows a very high level of correlation, i.e. 0.96, between the variables and a signifcant impact of Microloans on GDP.
 
KEYWORD
Correlation, Economic Growth, GDP, Microfnance, Micro Loans, Regression, Self Help Groups (SHG)
 
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