CASIRJ Volume 5 Issue 12 [Year - 2014] ISSN 2319 – 9202 International Research Journal of Commerce Arts and Science http://www.casirj.com Page 99 ROLE OF MICRO FINANCE INSTITUTIONS (MFIs) IN RURAL DEVELOPMENT THROUGH SHG-BANK LINKAGE PROGRAMMES (SBLP) RAMESH CHANDRA Ph.D. Research Scholar, Department of Applied Economics, University of Lucknow, Lucknow Uttar Pradesh-India E-mail- Chandra.iiml@gmail.com Abstract Today, micro finance has garnered significant worldwide attention as being a successful tool in poverty reduction .One such form of micro finance has been the development of the self –help movement which has culminated in a practice of small groups of people have formed into groups of ten to twenty and operate a savings- first business model whereby the embers savings are used to funds loans. Above half of the Indian population still doesn’t have savings bank account and they are deprived of all banking service. Poor also need financial services to fulfill their needs like consumption, building of assets and security of life. Microfinance institutions serve as a supplement to banks and in some sense a better one too. These institutions not only offer micro credit but they also provide other financial service like savings, insurance, remittance and non financial services like individual counseling , training and support to start own business According to the research done by the World Bank, India is home to almost one third of the worlds poor. Though many Central Government and State Government poverty alleviation programs are currently active in India, microfinance plays a major contributor to financial inclusion. In the past few decades it has helped out remarkably in eradicating poverty. One of the principal challenges of microcredit is providing small loans at an affordable cost. The global average interest and fee rate is estimated at 37%, with rates reaching as high as 70% in some markets. In this study also attempt to find that the microfinance have been able to increase their income and hence the standard of living of women with the help of SHGs. INTRODUCTION: Microfinance is a broad category of services, which includes microcredit . Microcredit is a part of microfinance , which provides a wider range of financial services, especially savings accounts, to the poor. Microcredit is provision of credit services to poor clients. Modern microcredit is generally considered to have originated with the Grameen Bank founded in Bangladesh in 1983.