"Concept of self help group" is the most exciting discovery in the context of Microfinance. Explain the terms and features of microfinance.

NABARD has defined microfinance as "provision of thrift, credit and other financial services and products of very small amounts to the poor in rural, semi-urban and urban areas provided to customers to meet their financial needs; with only qualification that (1) transactions value is small and (2) customers are poor." Microfinance provides financial services to those whose income is small and unstable. These people are in need of credit facilities for several reasons, some of which are listed below: (a) their needs are small and arise suddenly. (b) the institutional providers of finance, namely, the banks demand collateral security which they cannot provide. (c) most of the time, they are in urgent need of funds to meet their consumption demands, for example, to meet expenses related to education, illness, funerals, weddings for which it is difficult to obtain institution finance. (d) For purpose of investment in income generating activities. Concept of Self Help Groups (SHGs) is the most exciting discovery in the context of microfinance. The Indian microfinance scene is dominated by SHGs and their linkage with banks. This has helped in empowerment of women and eradication of poverty among people with low income. Microfinance provides a greater menu of options whereby the small loan can be garnered not just from the external sources but also through self-mobilization, by way of saving and sale of assets. The biggest flexibility in the case of microfinance is the lack of any physical collateral, even in case of loan from the bank.