This document discusses the evolution and scope of microfinance in India. It provides details on the regulations for microfinance institutions (MFIs) set by the Reserve Bank of India, including limits on loan amounts and interest rates. It also discusses the growth of MFIs in India and some of the challenges they face, such as high interest rates, inability to generate sufficient funds, and financial illiteracy among customers. The document concludes by proposing some solutions to address the credit gaps and risk management challenges in microfinance, including promoting group lending and improving technology to increase financial inclusion.