Microfinance is increasingly playing an important role in meeting the financial needs of the poor in developing nations. This form of financing has received a lot of attention over the last few years around the world. India, being a predominantly agricultural society, could benefit tremendously in terms of poverty alleviation, improvement in standards of living of the poor etc. The interest in micro-finance has burgeoned during the last two decades: multilateral lending agencies, bilateral donor agencies, developing and developed country governments, and non -governmental organizations (NGOs) all support the development of micro-finance. A variety of private banking institutions has also joined this group in recent years. As a result, micro-finance services have grown rapidly during the last decade, although from an initial low level, and have come to the forefront of development discussions concerning poverty reduction.