Microfinance institutions play a crucial role in the economic development of rural India by providing small loans to those in need, helping to reduce poverty. These institutions, including NGOs like Self Help Groups, offer financial support to individuals who may not have access to traditional banking systems. The idea of microfinance was pioneered by Dr. Mohammad Yunus, who founded Grameen Bank in Bangladesh. Organizations like Kiva Microfunds also contribute to poverty alleviation by lending money to low-income individuals worldwide. Through microfinance, people can start or expand businesses and improve their financial situations.