<b>Critical Analysis of Financial Crisis on Micro Finance in Reference with India</b> In a country like India where 70 percent of its population lives in rural area and 60 percent depend on agriculture according to the World Bank reports , micro finance can play a vital role in providing financial services to the poor and low income individuals. Microfinance is the form of a broad range of financial services such as deposits, loans, payment services, money transfers, insurance, savings, micro credit etc. to the low and poor individual income. The importance of micro finance in the developing economies like India cannot be undermined, microfinance refers to small savings, credit and insurance services extended to socially and economically disadvantaged segments of society. It is emerging as a powerful tool for poverty alleviation in India. There are two broad approaches that characterize the microfinance sector in India is Self Help Groups SHGs Bank linkage programme and Microfinance Institution MFIs .This paper tries to outline the prevailing condition of the Microfinance in India in the light of its emergence till now. Microfinance, SHG, MFI, Poverty Issue-2 Volume-1 Kajal J. Savaliya