Microfinance has received worldwide acclaim, par- ticularly after Prof. Muhammad Yunus was awarded the Nobel Peace Prize in 2006. Microfinance is the provision of financial services to the poor in order to enable them to raise their living standards. It has strong poverty reduction and gender empowerment dimensions. The experience of microfinance in most developing countries, including India, has been encouraging. Self-Help Group (SHG)-Bank linkage program of India, spearheaded by the National Bank for Agriculture and Rural Development (Nabard), the apex development bank in the country, is the largest microfinance program in the world. Microfinance experiments began in South America and, later on, spread to Asia and Africa.

Microfinance is not new to India because government intervention in microfinance is fairly old. It started with the establishment of Primary Agricultural Credit Societies in 1904 and attained strength with nationalization of 14 major commercial banks in 1969 and establishment of Regional Rural Banks in 1975. However, the success of microfinance through Public Sector Banks (PSBs) has been mixed in India. The modern microfinance as a supplement to government-driven microfinance has been experimented in India also. The experimentation of SHG-bank linkage program began in India in early 1980s in Southern India with the collaboration of Non-Government Organizations (NGOs) and PSBs facilitated by Nabard.

Professional Banker Magazine, National Bank for Agriculture and Rural Development, NABARD, Self-Help Group, SHG, Primary Agricultural Credit Societies, Commercial Banks, Regional Rural Banks, Public Sector Banks, PSBs, Non-Government Organizations, NGOs, National Council of Applied Economic Research, NCAER, Swarn Jayanti Gram Swarojgar Yojana, SGSY, Non-Banking Financial Companies, NBFCs.