This paper attempts to analyze the contribution of Microfinance Institutions (MFIs) toward inclusive growth in India. This study also accounts for the growth made by MFIs toward financial inclusion, poverty alleviation, and women empowerment. By relying on secondary data collected from various governmental, financial, and research organizations, the paper seeks to understand the impact of MFIs on the marginalized sections of society—especially in the rural areas of India. It will also analyze some of the other problems which MFIs face such as over-indebtedness, regulatory challenges, and sustainability of their operations. The paper integrates all these as recent trends and relates them with earlier studies toward accomplishing a holistic view regarding the effect of MFIs to India.