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Any discipline when it gets some popularity also becomes the subject of a constant review and even critical assessment. This can be positive sign of its growth and potentiality. It draws more attention. Pressure starts mounting up for ongoing improvements within its own framework. If it cannot keep it up with the pressure that energy will be diverted to development of alternatives. This is very natural. Now Microfinance is also going through this. It has become one of the important components of development initiatives. Over time microfinance has become very successful. At the same time, it has also generated some challenges.

Broadly the challenges of microfinance can be categorized into three areas-outreach, effectiveness, and diversification of delivery methodology. However al} of these are also interrelated. One can be the cause or the result of the other. Therefore; a good microfinance program should try to address issues related to all three challenges