Rural Development and Microfinance

Rural development occupies a central place in the literature on development for a number of reasons. The concept of rural development relates to improvements in the countryside or nonurban sections of a country, with "an emphasis on agriculture as the chief economic component" A significant realization in recent years has been the emergence of microfinance as a potent tool for development and its management. "Microfinance is a methodology for providing financial services to poor or financially underserved populations or both". Rural development and microfinance have important implications for development management. The rural context dominates the political, social, and economic activities in developing countries. Integrated rural development, which met with limited sustainable success, was undermined by national policies throughout the developing world that de-scaled the role of the state. The success of rural development hinges, to a great extent, on the key issues of livelihood and social protection.