Impact of Microfinance on Rural Development through Joint Liability Groups

Abstract

Microfinance stands out as a crucial financial inclusion mechanism, addressing the needs of individuals who find themselves excluded from the formal financial system. By breaking down barriers, microfinance ensures that even the most excluded individuals have the opportunity to benefit from a range of financial services, fostering economic empowerment and inclusion. The present study examines the role of microfinance on rural development through Joint Liability Groups (JLGs) with special reference to Kerala. The study also examined the trend of loans distributed to the southern region of India through JLGs for the last five years. The study used a descriptive research design and collected data from 385 beneficiaries through a purposive sampling method. The study revealed that microfinance has a positive influence on the rural development of Kerala. The researcher identified five predictors such as social development, economic development, financial development, employment generation and financial inclusion and dependent variable is rural development. The result shows that 99.6% attributed to microfinance on rural development in Kerala.