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

Microfinance is providing financial assistance in terms of small loans where the amount is generally less than 1 lakh. * Poverty and unemployment together form a vicious cycle where by one leads to other - Poverty → lack access → lack skilling ↑ ↓ poor income, No employment unemployment opportunities These above interconnected challenges can be addressed by microfinance as - 1) Access to education & Healthcare - small education loans can enable an individual to pursue higher education after free completing education till class 8 FTC. Also small loans can help address health emergencies. 2) Skill opportunity - microfinance

can help individual to enroll oneself for various vocational courses and learn market relevant skills as - A person can learn skills needed to be an electrician, plumber etc 3) Create job opportunities - with market relevant skills an individual can easily start jobs as electricians. 4) Promote entrepreneurship - A person with access to soft loans can develop risk taking attitude they investing in new business ideas as - grocery shop 5) Other associated challenges it can address as with economic betterment it will bring social cohesion and harmony. Laws and other situated will improve. However, there is further need to enhance access to MCF, state incentivized awareness, more microfinance teams, planning in SHG etc

— Utkarsh Pathak · AIR 179