The typical micro finance clients are self-employed, household-based entrepreneurs & low-income persons that do not have access to formal financial institutions and suffers lack of business skill. Micro entrepreneurs face many hurdles in getting startup financing, and they sometimes lack the skills necessary to manage the financial aspect of their business. They are unable to choose business line and in large number of cases they indulge in particular business by default. As a result, many micro entrepreneurs cannot grow and develop their business beyond a micro enterprise, while even few fail to earn their livelihood. The paper discuss, importance of capacity development as part of professional activity of Micro Finance Institute along with extending micro credit, and argues that for overall growth of client, MFIs and a nation the strategy is sine-qua-non.
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Keywords: Micro Finance, Capacity Devlopment
JEL Classification: P34