Critically assess the role of microfinance in satisfactorily addressing the interconnected challenges of poverty and unemployment.

Microfinance tools are the emerging ways of finance where small amounts are given as loans, generally not backed by collateral. Microfinance addressing poverty + unemployment: Microfinance >> Entrepreneurship >> Job creation & Employment generation Repayment Out of poverty cycle << Savings << Microfinance tools are used to bring vulnerable sections from out of poverty iv SHG - bank linkage program PM Jivandhi - street vendors credit boost operation.

Challenges to microfinance: (1) Identification of beneficiary is difficult as many do not have required documents (2) Delay in financing due to KYC-taping (3) Lack of collateral - in many cases finance is turning into Non Performing asset for banks ↑ NPAs interest = ↓ access in their interest for microfinance (4) Self employment - in many cases finance is not used for self employment but for consumption expenditure. In order to address these challenges having bank search model and banks giving small EMIs can help boost the fullers of microfinance.