Though microfinance is a strong tool for poverty alleviation, it is not exploited adequately due to shortcomings in regulation and delivery. Microfinance is provision of thrift, credit and other financial services of very small amounts to the poor in rural, semi-urban and urban areas to help them raise their income levels. This type of finance has been recognised as an effective tool for poverty alleviation, particularly since 70 per cent of Indians live in rural areas. In fact, almost 27.09 per cent of the rural population and more than 23.62 per cent of the urban population are below the national poverty line.