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An investigation was carried out to study the Impact of microfinance on reduction of poverty in Raina block of Burdwan district in West Bengal. The survey was conducted during the season of 20112012. Through purposive random sampling method two villages were selected; one nearer and the other away from the block head quarter. Adopting random sampling without replacement SHG members of the sample villages were selected and enquired about different aspects of microfinance and its role for alleviation of poverty. SHG Bank NGO model was operating in the study area. Since employment opportunities were available in village2, the SHG members of the sample village were not very keen to operate SHG in a successful and sustainable manner. The differential average annual income in village1 was attributed to SHG financed dairy enterprise. There was also marked difference in consumption expenditure across the villages. However, there were some lapses in repayment of loan in scheduled period by the SHG members in general. Both the NGO and banks should work in unison to motivate and influence the behavior of the SHG members, so that financial exclusion in the remote area could be avoided.
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