Micro-finance institutions
Banks and financial bodies do the basic job of saving deposits and lending them. They have to however abide by stringent regulations as they are ever under auditing eyes. They cannot be partial to a certain section on grounds of poverty. Thus, a sizeable chunk remains un-helped financially, and with no light.
That is when they become victims of irregular and even illegal debt provision with sky-high rates. What the Government has done is to look at the issue at grass root level and create macro-finance institutions for the same. They operate in villages, small districts and offer loans or aids on a circulatory mode with agreeable rates of interest. Certain NGOs affiliated to the governments also lend their part in this.
Credible banks help these macro-institutes in bestowing the poor with monetary help. This way, the intermediaries help banks in doing some beneficial job. In case of defaults, the government soaks up the economic pressure.
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