International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421 Volume 2, No. 4, April 2013 i-Xplore International Research Journal Consortium www.irjcjournals.org 70 Micro Credit for Sustainable Development: Role of NGOs Manmohan Mall, Siksha O Anusandhan University, Bhubaneswar P K Mishra, Central University of Jharkhand, Brambe, Ranchi ABSTRACT Microcredit has spread rapidly since its beginning in the late 1970s, but whether and how much it helps the poor is the subject of intense debate. As the history suggests rural credit, poverty alleviation, and micro finance are inextricably interwoven. Any effort to understand one without the reference to other can give fragmented results. The Non-Governmental Organisations (NGOs) are regarded as ‘outside’ actors perceived to work in the interests of the poor, and in the absence of the state, many NGOs have played a vital role in the provision of basic services to the poor. The present paper seeks to delineate the role of NGOs in microfinance and banking inclusion in the remote rural areas. Keywords Microfinance, Sustainable Development, NGOs I. INTRODUCTION Poverty is one of the biggest challenges to the development of a developing country like India where a major population is living in rural and semi-urban areas. Poverty leads to hunger, malnutrition, illiteracy and social misdeeds. The main reason may be lack of ample employment opportunities in the country. Since employability of human resource is a key to sustainable development, creating self-employment opportunities is one way of alleviating poverty and solving the consequential problems of unemployment. There are over 24 crores people anyhow sustaining below the poverty line in the country. The Scheme of Micro-Credit has been found as an effective instrument for lifting the perished poor above the level of poverty by providing them adequate self-employment opportunities and making them credit worthy. In the context of the contemporary social empowerment, self realizations and self initiatives are the bases for the formation of Self-Help Groups (SHGs). This has motivated NGOs to form SHGs in rural areas to empower them through developing their inherent skills. Thus, SHG movement among the rural poor in different parts of the country has emerged as a very reliable and efficient mode for technology transfer. Chanakya’s philosophical statement has transformed into the SHGs with the help of NGOs and their efforts. Microfinance is the tool to empower the rural poor and also tool against human deprivation. Microfinance is motivating sustainable development through the supportive NGOs. The growth of microfinance in India has been in response to the failure of institutional initiatives of rural credit system and involvement of informal credit system – rural credits especially rural cooperatives. This has led to establishment of microfinance institutions under the guidelines of NABARD. Micro-credit programme works through NGOs/SHGs and the merit lies in weekly monitoring and refund of installments. II. GROWTH OF MICROFINANCE IN INDIA During the 1960s and 1970s the key issue in agriculture and rural development was agricultural production. Apart from improved seeds and seedlings, fertilizer, pesticides, tools and machines agricultural credit was an input for improved agricultural production. The target groups were farmers and the issue was how to disburse agricultural credit to farmers. The funds were provided by governments and donors. Disbursement mattered, not repayment. The main disbursement channels were agricultural development banks and projects. Agricultural credit was a service, not a business. The strategy had much to show: the green revolution, driven by technology, financed on credit, with subsidized interest rates. The produce was purchased by government at guaranteed prices. So green revolution succeeded thereby ignoring the business of the financial services. But when farmers didn’t repay their loans, the banks didn’t cover their costs and the governments ran out of money to finance the subsidies, the banking business finally failed, and so did the service. Meanwhile, with the rapidly growing population, increasing numbers of rural people could not live on agriculture alone. To survive they had to engage in numerous activities such as on-farm, off-farm and non- farm activities. Rural households and rural economies got increasingly diversified. Access to finance was the limiting factor. Agricultural credit had been exclusive. It excluded all those who didn’t own and cultivate the land. In addition to this, labourers, small and micro- entrepreneurs, traders, women and large numbers of small- holders were too poor to pay the bribes, and also too uneducated to do the paperwork. The unsatisfied demand prepared the ground for a revolution on the supply side and microfinance took its birth. Perhaps this might have