unorganized sector played a key role in the provision of liquidity. On the whole, chaotic One of the greatest challenges before Indian subconditions prevailed in the system. continent which accommodates more than one-third of its population living below poverty line. This paper With the adoption of the theory of mixed economy, examines the impact of microfinance on income and the development of the financial system took a employment on socially disadvantage group in different turn so as to

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... ll the socio-economic particular. The study primarily based on the field survey and political objectives. The government started conducted by the author in various district of creating new financial institutions to supply Uttarakhand. Both participants and non-participants finance both for agricultural and industrial are taken into consideration for better understanding of development and it also progressively started the impact of microfinance. Comparison of member and nationalizing some important financial non-members socio-economic condition is reported and institutions so that the flow of finance might be in it was found that non-participants are the most the right direction. vulnerable and are at a disadvantage position than their 1. History of Micro Finance In India counterparts. Probity-model is applied to examine the Microfinance means provisions of small-scale household specific factors explaining participation in financial products and services to the poor. the program. Microfinance is one ancient origin in India. Traders Keywords and moneylenders have traditionally provided Below-poverty line, Socio-economic, Probity-model. microcredit to the rural poor but charged Below-poverty line, Socio-economic, Probity-model. exorbitant rates of interest, which led to 1. Development Of Financial System In considerable hardship and impoverishment of India borrowers; and later this resulted into debt trap, Some serious attention was paid to the bonded labor, and illegal and forced transfer of development of a sound financial system in India entitlement on properties. What we refer to as only after the launching of the planning era in the microfinance today does not include such country. At the time of independence of the exploitative practices; rather it refers to "lending to country in 1947, there was no strong financial the poor at reasonable but sustainable rate from institutional mechanism in the country. There was Government and private institutional sources." absence of issuing institutions and non-Social banking has been prevailing in India since participation of intermediary institutions. The long. Institutional credit was perceived as a industrial sectors also have no access to the savings strategy for rural development and poverty of the community. The capital market was very alleviation by enhancing rural production and primitive and shy. The private as well as productivity in independent India. Increasing