Synopsis Micro-credit has assumed a special significance in the context of increased emphasis on rural development. The noble peace prize to Muhammad Yunus for his work on micro-finance in Bangladesh will not only boost the sector but also inspire governments, banks, voluntary agencies and individuals to strengthen and expand the micro-finance sector. In India, the micro-finance sector has grown form a few self-help groups (SHGs) promoted by NGOs in the mid-1980s to over 29 lakh SHGs at present. The SHG-bank linkage programme of NABARD accelerated the growth of the sector. The Government of India and RBI have laid greater focus on the micro-finance sector to increase the access of the poor to financial services. In time to come, the micro-finance sector is expected to growth further in term of reaching out to more families and would include more services for the poor. To provide an enabling environment for realizing the potential of micro-finance in India, a close scrutiny of issues that are constraining the growth of the sector is required and a strategy needs to be prepared for strong and consistent growth so that a majority of the poor have access to institutional financial services