MICRO-CREDIT AND RURAL POVERTY
Massive poverty and obscene inequality are such terrible scourges of our time — times in which the world boasts breathtaking advances in science, technology, industry, and wealth accumulation — that they have to rank alongside slavery and apartheid as social evils. Nelson Mandela, former President, Republic of South Africa
“If we can come up with a system which allows everybody access to credit while ensuring excellent repayment-I can give us a guarantee that poverty will not last long”-Muhammad Yunus (1994) Approximately 400 million people in India living below or close to the poverty line, could be roughly translated into 75 million households out of which around 60 million are rural household. So poverty in India has predominantly a rural character. While there are several structural dimensions to the rural poverty it is generally accepted that it arises due to the lack of capital or lack of surplus. The rural poor is perpetuating poverty and is the victims of the “vicious cycle of poverty” Credit is important in the lives of the rural poor in a developing economy. As the distribution of land in the countryside remains skewed, the majority of the rural population is left with an inadequate resource base for production. Faced with a weak social security system to fall back upon, this section of landless or near-landless rural population is forced to depend upon credit for its livelihood. It was this understanding that led