International Journal of Trend in Scientific Research and Development (IJTSRD) Volume 4 Issue 4, June 2020 Available Online: www.ijtsrd.com e-ISSN: 2456 – 6470 @ IJTSRD | Unique Paper ID – IJTSRD31385 | Volume – 4 | Issue – 4 | May-June 2020 Page 1088 The Relationship between Microfinance Institutions and Group Lending Model in Uttar Pradesh, India Reshu Goel 1 , Dr. Megha Aggarwal 2 1 Research Scholar, 2 Assistant Professor, 1,2 FMS-WISDOM, Banasthali Vidyapith, Vanasthali, Rajasthan, India ABSTRACT Microfinance is a mechanism for the development of the country with especially focusing on poor women in rural areas. Micro Finance has had several successful initiatives, including the range of outreach, as well as the development of innovative products and local institutions that reach out to marginalized communities. Micro-finance has been accepted at the national policy level for poverty reduction. The present paper purports to examine the role of JLGs in microfinance in India. The paper is based on mainly primary data. The research design is descriptive. The data for the present study is based on a major research study on microfinance in the state of Uttar Pradesh conducted in 2019 by the researcher. Chi-square test is used to know the level of significance. While many studies relate to microfinance, only a few studies have been conducted so far to assess the effect of JLGs. Against this backdrop, the present paper purports to examine the Relationship between microfinance institutions and group lending model in Uttar Pradesh, India. KEYWORDS: Empowerment; JLG; Microfinance institution; Microfinance model; Microfinance and Poverty How to cite this paper: Reshu Goel | Dr. Megha Aggarwal "The Relationship between Microfinance Institutions and Group Lending Model in Uttar Pradesh, India" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456- 6470, Volume-4 | Issue-4, June 2020, pp.1088-1094, URL: www.ijtsrd.com/papers/ijtsrd31385.pdf Copyright © 2020 by author(s) and International Journal of Trend in Scientific Research and Development Journal. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (CC BY 4.0) (http://creativecommons.org/licenses/by /4.0) I. INTRODUCTION In the last decade, everyone was unfamiliar with the concept of microfinance which is now used as the most essential tool to fight from the poverty issue. Microfinance is being known as one of the cost-effective and complementary instruments of the rural credit disbursement system economically and effectively and without too much legal framework to prompt institutional credit to the poor and facilitates timely availability, the manner of promotional work, SHGs and SHG- banks linkage. Micro-finance outreach familiar worldwide by an effective means to relieve poverty and recovery from the social and economic situations of the rural poor. Microfinance noticeable in its efforts to reduce poverty and make it possible for the provincial poor in India. India since independence and co-operatives were strengthened to provide credit to the poor. To increase the credit flow in the banking sector and credit fair was organized. However, credit access to the poor from formal financial institutions is still limited and the poor depend on non-formal agencies for their credit needs. Micro Finance Institutions (MFIs) are foundations other than banks dynamic in providing the open to the money related offices. The three kinds of the lending process- 1. Documentation and security-based traditional procedure, which is existed in all banks, 2. Group-lending process, that is available in different sizes and forms and has its benefits, and 3. The individual lending option where microfinance institutions need to take great care in measuring the repaying ability of the borrowers. These techniques have been focused on microfinance through SHG, although there has been a tremendous increase in credit access to the poor through SHG, and recovery has been relatively high. The microfinance institutions started lending at a very small size and gradually they expend their business size very rapidly. Now, most of the microfinance institution converts into small finance institutions. This is a good example of the outcome of capturing the microfinance area which was neglected by banks. II. REVIEW OF LITERATURE Microfinance generally refers to a program used to provide loans to very poor individuals, including loans and specialized assistance for voluntary work and other associated money and administration. IJTSRD31385