Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
3) Despite the Microcredit system that has a great scope in alleviating socio-economic problems, existing systems requires restructuring in several areas to allow for long lasting benefits. Comment.(250 words)
Why this question:
The article explains the current conditions of Microcredit and its scope to alleviate socio-economic problems and in what way these conditions alone can not fix all the economic problems.
Key demand of the question:
The answer must evaluate the impact of micro credit systems and the need for restructuring existing systems for better economic conditions in the country.
Comment– here we have to express our knowledge and understanding of the issue and form an overall opinion thereupon.
Structure of the answer:
Begin with what you understand by microcredit systems – Microcredit refers to the granting of very small loans to impoverished borrowers, with the aim of enabling the borrowers to use that capital to become self-employed and strengthen their businesses. Loans given as microcredit are often given to people who may lack collateral, credit history, or a steady source of income.
Discussion should include the following:
Explain first in what way microcredit has gained much traction as a tool for ensuring the welfare of the most impoverished in the society but there are certain flaws in the model.
Discuss what is the core idea of microcredit, how has it helped improve the socio-economic conditions of the poor in the country.
Explain what more restructuring is envisaged or required to better the conditions of economy apart from microcredits.
Conclude with way forward.