Asian Journal of Research in Banking and Finance
Year : 2012, Volume : 2, Issue : 7
First page : ( 62) Last page : ( 75)
Online ISSN : 2249-7323.

Role of financial institutions in promoting micro enterprises-an analysis

Dr. Dhiman Pawan Kumar, Associate Professor

EDP, Sant Longowal Institute of Engineering & Technology, Longowal, Punjab, India

Online published on 10 July, 2012.

Abstract

The financial system of any country consists of specialized and non-specialized financial institutions of organized and unorganized financial markets, financial instruments and services which facilitate transfer of funds. These institutions are business organizations that act as mobilizes and depositors of saving and purveyors of credit to the community and also act as the miracle cure for eradication of poverty with focus on rural development. Rural development has always been an important issue in all discussions pertaining to economic development, especially of developing countries, throughout the world. In the developing countries and some formerly communist societies, rural mass comprise a substantial majority of the population. Over 3.5 billion people live in the Asia and Pacific region and some 63% of them in rural areas. Although millions of rural people have escaped poverty as a result of rural development in many Asian countries, a large majority of rural people continue to suffer from persistent poverty due to paucity of funds. The socio-economic disparities between rural and urban areas are widening and creating tremendous pressure on the social and economic fabric of many developing Asian economies. These factors, among many others, tend to highlight the importance of credit in the rural development. Traditionally, rural India is capital starved; only meager proportion of the rural people has abundance funds. As a result rural economy presented a deserted scene even today after many a Five year Plans. This underlines the importance of advancing and proper utilization of funds for the potential strength of the individuals in the development of rural economy. In the present paper an attempt has been made to find out the role of Khadi and village Industries Board Kangra (Himachal Pradesh) by providing financial assistance to entrepreneurs and it has been found that after sanctioning loan KVIB Kangra forward the cases to banks for advance and in the banks people faces a lot of difficulties.

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