Microfinance service is a tool for providing financial services to the low-income population, which do not have access to the mainstream financial services. Micro finance will serve a range of financial service including credit, savings, insurance, money transfer and other financial products provided by different service providers, targeted at poor and low-income group. This paper emphasises on role of microfinance in improving the rural poor with reference to Bangalore rural. Micro-finances plays a major role in financing micro entrepreneurs, cottage industries, small scale industries etc. and also the State Government initiated Microfinance Service are made available under different Self Help Groups, Non-Governmental Organizations, Grameen Banks etc. The study is made by the Direct Interview Method. The study reveals there is lack of awareness amidst the 21% rural population to avail the schemes initiated by the Government. The rest availing the facilities has been not utilized optimally for new ventures but for personal use. The microfinance can contribute to solve the problems of inadequate housing and urban services as an integral part of poverty alleviation programs. Collaborative models between banks, NGOs, MFIs and Women’s Organizations are furthest advanced and would lead in uplifting the standard of living for rural population.
