The Effect Of Microfinance Institutions On Financial Inclusion And Poverty Alleviation: A Study In Tirunelveli District, Tamil Nadu

Abstract

In the Tamil Nadu district of Tirunelveli, this study examines the impact of microfinance institutions (MFIs) on financial inclusion and poverty alleviation. A mixed-methods approach was used to gather information from 300 respondents using in-person interviews and structured questionnaires. The purpose of the study is to assess the ways in which MFIs raise household incomes, increase financial literacy, and facilitate access to formal banking services. The majority of members have benefited from MFIs, according to key results, with increased financial inclusion, higher living standards, and greater economic empowerment. In particular, after interacting with MFIs, 70% of respondents said they had better access to banking services, and 60% said their household income had increased. Nonetheless, obstacles like regional limitations and legal concerns were noted as limiting the efficacy of microlending initiatives. The study emphasises how important MFIs are to promoting economic development and stresses the necessity of making strategic changes to overcome current challenges. These observations add to the continuing conversation on microfinance as a workable approach to reducing poverty and promoting financial inclusion in marginalised areas.