Which of the following Institutions are providing microfinance services to the poor?

A. Conventional weaker section lending banks.
B. Microfinance Institution.
C. Self Help Group-bank linkage programme.
D. EXIM banks.

Choose the correct answer from the options given below:

Correct option is D

Microfinance services are aimed at providing financial assistance to low-income individuals or groups, particularly those who lack access to traditional banking services. The institutions providing such services include:

1. Conventional weaker section lending banks (A):
   Many conventional banks have specialized schemes or priority lending programs targeted toward weaker sections of society, offering microfinance loans to small borrowers.

2. Microfinance Institutions (B):
   These are specialized financial institutions dedicated to providing small loans, savings products, and other financial services to low-income groups. Examples include Grameen Bank and SKS Microfinance.

3. Self Help Group (SHG)-bank linkage programme (C):
   A collaborative model where Self Help Groups are formed, and banks extend credit to them. SHG-bank linkage is a critical initiative in microfinance aimed at empowering rural poor, particularly women.

4. EXIM Banks (D):
   These banks specialize in trade finance and are not involved in microfinance services for the poor.

Information Booster

Microfinance Services: Microfinance plays a crucial role in poverty alleviation by enabling the poor to start businesses, improve their livelihoods, and achieve financial independence. Microfinance institutions and SHG-bank linkage programs are central to delivering these services, especially in rural and underserved areas.

Key objectives:

• Promote financial inclusion.
• Empower women and marginalized communities.
• Encourage entrepreneurship and self-employment.

Additional Knowledge

EXIM Banks specialize in international trade finance, providing loans, guarantees, and credit to exporters and importers. Their focus is on large-scale projects, export credit, and supporting businesses in global trade, rather than catering to small-scale borrowers or low-income individuals. Thus, EXIM Banks do not provide microfinance services, as their mandate is entirely different.