Microfinance refers to the provision of various financial services like savings, credit, money transfers, insurance etc. in small doses for the poor to enable them to raise their income levels and improve living. Microfinance and microcredit playing an important role in developing the rural areas by providing loans to people at lower interest. It has been recognized world over as one of the new development paradigms for alleviating poverty through social and economic empowerment of the poor particularly women. The present research paper describes the role of Microfinance sector in uplifting the conditions of people who are living in rural areas. The study as well, focuses on the major challenges that microfinance is facing in the NER of India. A number of agencies- Government as well as Non-Government Organizations-(NGOs) are, today involved in micro-finance development initiatives. The microfinance-SHGs have a great bearing on women empowerment.
