The effectiveness of microfinance is important for reducing the poverty index of the country. Today, we are facing a problem of unemployment along with the increase in population. Migration happens from rural to urban for the search of employment. Around 60 to 75 million households in India live below the poverty line. There are various financial institutes along with the help of a financial corporation, cooperative sector, cooperative bank, NGOs, commercial and nationalizes bank is supporting credit service. Micro finance improves the financial need of rural Indian people. Microfinance helps to implement the development policies of the government with the help of state government, NGOs, NABARD and many other institutes. Micro finance improving the awareness about the saving pattern and accountability with the help of formation of Self Help Group (SHG).