Microfinance as a way of Financial Inclusion: A Study of Cooch Behar District of West Bengal

As a financial intermediary, banks contribute to the economic growth of the country by identifying the entrepreneurs with the best chances of successfully initiating new commercial activities and allocating credit to them. However, it is disheartening to note that the number of people with access to the products and services offered by the banking system continues to be very limited even after introduction of inclusive banking initiatives in the country through measures such as the cooperative movement, nationalisation of banks, creational of regional banks, etc. Against this backdrop, we can think about microfinance programme which plays an important role towards financial inclusion. People’s participation in credit delivery, recovery and linking of formal credit institutions to borrowers through the intermediation of self-help Groups (SHGs) have been recognised as a supplementary mechanism for providing credit support to the rural poor. The basic objective of the study is to analyse the role of SHGs towards financial inclusion of the rural poor in Cooch Behar District of West Bengal. From the discussion it is found that after joining the SHGs, 1,37,978 rural poor have been able to connect with the formal financial institutions in the district of Cooch Behar. Thus the microfinance programme in the form of SHG-Bank linkage model has played an important role towards financial inclusion of the rural poor in this district.