8. MFIs and NBFCs Contributions Towards Financial Inclusion and Circular Economy

The role of microfinance institutions and non-banking financial companies is to evolve as a means of financial inclusion and a circular economy that is accessible and affordable for the excluded groups/regions. It can help to loosen the grip of informal sources of finance and bring the excluded sections permanently into the ambit of formal finance. Financial literacy can empower women to develop a financial identity even with their household savings and help them get access to formal credit for gainful occupation, giving them economic freedom and power. In the global world, the micro-credit movement has to be viewed from a long-term perspective under the Self Help Groups (SHGs) framework. There is a need for an innovative and diversified microfinance sector which will contribute to women’s empowerment. Government policymakers should focus on the importance of small savings and loan provisions for consumption and group formation. The Government policy can support the Self-help groups (SHGs) in rural areas through public investment in infrastructural development, including education and health care. They should enact policies to regulate the quality of SHGs and could help in the financial management of SHGs for responsible and sustainable growth.