Micro Credit Scheme or MCS is a loan scheme that is offered by micro financial institutions (MFIs). The scheme is primarily offered for micro enterprise activities such as agricultural activities, artisan activities, and so on.
Micro Credit Scheme (MCS) refers to a loan scheme that is primarily provided by micro financial institutions (MFIs). These financial schemes are offered chiefly for micro enterprise activities such as agricultural activities, artisan activities, etc.
These schemes assist low-income individuals to engage themselves in income-generating activities for a sustainable livelihood.
Micro credit schemes are provided to self-help groups as well in order to enable them to set up ventures and earn incomes. These schemes are helpful to tribal people as well.
In the past, there were many fallacies that poor individuals did not have proper knowledge to take care of the finances carefully. Some of the common misconceptions included:
These misconceptions led to the false idea that poor people in rural and urban areas are not eligible to avail regular banking services. In order to address these misconceptions, micro credit schemes were introduced to offer affordable financial assistance without the involvement of conventional banks.
In many rural as well as urban areas, poor women are not provided with access to financial assistance due to discrimination from men. These micro credit schemes serve as a great boon to women as they help them to be financially independent.
The functioning of self-help groups has shown that low-income individuals, especially women, have the ability to handle finances proficiently.
Micro credit schemes are provided exclusively to help out people who live below poverty line (BPL) by offering them credit to start small business ventures in multiple sectors for earning incomes. Some of the most common types of activities that are sponsored by micro credit schemes include:
The micro credit sector has been existent in India from a very long time. It started to gain excellent modifications during the 1990s. Many alterations were made to the micro credit system and its policies in order to make the whole system more organised and efficient. One of the main organisations that worked towards developing the MCS is the Small Industries Development Bank of India (SIDBI).
The Micro Credit Scheme was officially launched in the year 1994. The SIDBI has a great credit delivery system that works towards offering credit schemes to the weaker sections of the society at a micro level.
Micro credit schemes are offered to individuals, micro units, self-help groups, small industries, etc. through various channels.
In India, there are mainly 4 types of bodies that offer micro credit schemes to individuals and self-help groups and they are:
Some of the organisations that have taken up the responsibility of providing micro credit schemes to beneficiaries include:
Micro credit schemes come with great benefits that assist low-income individuals to be financially secure and independent. Some of the characteristics of micro credit schemes are:
With the help of micro credit, even people belonging to the economically underprivileged sections of the society can start to gain and sustain economic self-sufficiency.
Credit Card:
Credit Score:
Personal Loan:
Home Loan:
Fixed Deposit:
Copyright © 2025 BankBazaar.com.