the role of microfinance in empowerment:...
TRANSCRIPT
Volume 4, Number 3, July – September’ 2015
ISSN (Print):2279-0934, (Online):2279-0942
PEZZOTTAITE JOURNALS SJIF (2012): 3.735, SJIF (2013): 5.020, SJIF (2014): 5.996
International Journal of Retailing & Rural Business Perspectives © Pezzottaite Journals. 1822 |P a g e
THE ROLE OF MICROFINANCE IN EMPOWERMENT:
THE CASE STUDY AT HALDHARU REGION, BARDOLI
Dhara Patel41
ABSTRACT
To understand microfinance as a supporting tool for empowerment. To promote self-sufficiency and development among the
people. Increased asset creation and savings, higher employment and improved social lives of members. To provide a range of
quality financial services through the empowerment. By going through this study I came to know that the indicator of “power”
element in which ability to challenge societal power relation ranks first followed by sub-indicator of the ability to take
decision at the household while ability to control source of power ranks the third. In indicator of building of awareness and
capacity in which legal and political awareness ranks the first followed by the sub-indicator of action to bring gender equality
and ability to participated in non-family group ranks third while the ability to manage productive resources ranks fourth and
so on. Overall microfinance plays important role in empowerment.
KEYWORDS
Microfinance, Empowerment, Building Awareness etc.
INTRODUCTION
The history of micro financing can be traced back as far as the middle of the 1800s, when the theorist Lysander Spooner was
writing about the benefits of small credits to entrepreneurs and farmers as a way of getting the people out of poverty.
Independently of Spooner, Friedrich Wilhelm Raiffeisen founded the first cooperative lending banks to support farmers in rural
Germany. The modern use of the expression "micro financing" has roots in the 1970s when organizations, such as grameen Bank
of Bangladesh with the microfinance pioneer Muhammad Yunus, were starting and shaping the modern industry of micro
financing. Another pioneer in this sector is Akhtar Hameed Khan. According to oxford dictionary, microfinance is defined as ―A
world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality
financial services, including not just credit but also savings, insurance, and fund transfers.‖
The idea behind the microfinance is generated appropriate change in financial systems all over the world. As the traditional
financial system provided benefits and safety to the rich segment of the society, the main object of microfinance is to lift the poor
segment of the society from the circle of poverty and able them to contribute and participate in the economic activities and
development.
Microfinance in India
The Indian microfinance industry would cross 11crore borrowers and Rs 1, 35,000crore ($30 billion) in loan portfolio by 2014
and will require a huge capital inflow in both debt and equity. They have put the total estimated demand for micro-credit in India
at $ 51.4 billion (Rs. 2, 40,000crore). There is a huge demand for Microfinance in India. The poor continue to lack access to
formal credit and are mainly relying upon informal sources to meet their needs. Microfinance Institutions (MFIs) are trying to
bridge the gap between demand and supply. The Indian states, including Bihar, Uttar Pradesh and West Bengal, have 421 million
―poor‖ people, the study found. This is more than 410 million poor in the poorest African countries, it said. Thus, the demand for
microfinance services – savings, credit and insurance – is apparently insatiable in India. In that sense, India is perhaps the largest
emerging market for microfinance services. Improvement in GDP has become essential for Indian economy for survival purpose
and in this case, the best answer would be the MFIs, which serve the purpose with the best intention. ―SEWA‖ in Gujarat, SHARE
and BASIX in Southern India have convinced to the public at mass that with such institution real services reaches to the Indian
economy for upliftment and for betterment. NABARD‘s SHG- Bank linkage program also provides the ―largest microfinance
network in the world‖. Many politicians also give emphasis that with such MFIs eradication of poverty has become possible.
Andhra Pradesh CM Shri Chandrababu Naidu also favours it and adopts it in its political agenda.
Empowerment
Empowerment literally means making someone powerful; facilitating the weak to strength, enabling someone to confront injustice
and oppression. Empowerment is a process, which makes the powerless to acquire and control over power through awareness,
41Assistant Professor, Uka Tarsadia University, Gujarat, India, [email protected]
Volume 4, Number 3, July – September’ 2015
ISSN (Print):2279-0934, (Online):2279-0942
PEZZOTTAITE JOURNALS SJIF (2012): 3.735, SJIF (2013): 5.020, SJIF (2014): 5.996
International Journal of Retailing & Rural Business Perspectives © Pezzottaite Journals. 1823 |P a g e
capacity building, participation in decision-making, acquiring information, attaining confidence and self-employment. In this
study, some indicators were measure, which is given below:
Table-1
Sources: Authors Compilation
LITERATURE REVIEW
Ana Marr (2002) studied that group dynamics have been largely neglected when the impacts of microfinance on poverty reduction
are assessed. The study presents an analytical framework in which the study of group dynamics was central, and new channels of
impact effects on the individuals participating in microfinance schemes, their households, enterprises and communities are
assessed. Four potential outcomes of this fresh approach to the analysis of poverty impacts were argued; they may have dramatic
implications for the way we look at the effectiveness of microfinance today.
Anjugam M. & Ramasany C. (2007) studied that microfinance has brought considerable improvement in decision making skills
among women, gave them confidence in managing the financial crisis of the family, decision making capacity in household
matters and assertiveness in protesting against social evils like drinking water problem, dowry and gambling etc.
Sengupta R. & Aubuchon C. (2008) had focused on achievement made by Prof. Muhammad Yunus and the Grameen Bank for
their efforts to create economic and social development from below. Their article was intended as a non-technical overview on the
growth and development of microcredit and microfinance. The Grameen bank and its achievement were reviewed. Paper also
emphasized on the group-lending mode of granting microfinance and it is benefit. Paper also reviewed the microfinance in
different economies and its future.
S. No. Indicators of
Empowerment
Sub-indicators of Empowerment
A
Indicators of
Power elements
Ability to take decision at the household
Savings decision level.
Reduction in expenses.
Invest more in Children‘s education decision.
Able to deal with financial crisis of the family.
Ability to control source of power
Complete ownership of resources.
Able to work together as women without the difference of caste & religion.
Ability to challenge societal power relation
Moving independently.
Able to discuss freely with bankers.
Involvement with society function.
B
Indicators
of building
of awareness
and capability
Ability to participated in non-family group
Resolution of inter and intra household conflict.
Expression of views in family.
Action to bring gender equality
Moving independently.
Participation in activities outside home.
Interaction with bankers, Govt. officers and non-Governmental Organizations.
Husband cooking during emergency.
Legal and political awareness
Women‘s participated in gram sabha meeting.
Participated in voting.
Knowledge diffusion on basic civil rights and their protection.
Mobilization on local issues.
Participated in local government electorate.
Participation in election as contestants.
Ability to manage Productive resources
Mobility of female labor.
Increase female employment in non- traditional activity.
Exchange of market information & ideas through women.
Volume 4, Number 3, July – September’ 2015
ISSN (Print):2279-0934, (Online):2279-0942
PEZZOTTAITE JOURNALS SJIF (2012): 3.735, SJIF (2013): 5.020, SJIF (2014): 5.996
International Journal of Retailing & Rural Business Perspectives © Pezzottaite Journals. 1824 |P a g e
Mummidi T. (2009) discussed in her paper that women should entitled the work with the utilization of resources through MFI.
Along with this, how efficiently they utilize resources has also been discussed. The paper suggests that a better understanding of
the diversity of women‘s livelihood and a better understanding of the range of constraints, motivations, skills and capabilities of
women through the livelihood framework might help to understand the impact of microfinance. The limitation, however, lies in
the broad scope of this framework making it difficult to operationalise. This paper was a narrow demonstration of this difficult
possibility.
METHODOLOGY OF RESEARCH
Problem Statement
The study was undertaken in Haldharu to assess the role of microfinance Empowerment.
Research Design
Descriptive research design because when the researcher is interested in knowing the characteristics of certain group such as age,
sex, education, level or income.
Research Objective
Primary Objective: The role of microfinance in empowerment: The case study of bank of Baroda at Haldharu region.
Secondary Objectives
To increase the growth of people through microfinance empowerment.
To understand microfinance as a supporting tool for empowerment.
To understand why people to be targeted as potential clients for microfinance and how is influencing.
To promote self-sufficiency and economic development among people.
They help the poor to gain economic and social empowerment. Increased asset creation and savings, higher employment and
improved social lives of members are the benefits to the members.
To provide a range of quality, affordable financial services in a sustainable manner to the low income families through Self Help
Groups, for their socio-economic empowerment.
Data Collection Method
It is a term used to describe a process of preparing and collecting data. There are two sources of data collection method:
Primary data through survey in Haldharu region.
Secondary data from Bank of Baroda, which is situated in Haldharu.
Sample Size: A sample of 50 respondents from the different location is taken from Haldharu.
Analysis of data: Mean, Standard deviation, Liker scales are used the analysis of data.
LIMITATIONS OF STUDY
To inadequate measures of variables, loss or lake of participant, small sample size, errors in measurement and other
factor typically related to data collection and analysis.
The extra ordinary rate of illiteracy in community was a major problem for the research.
Lake of cooperation from the people as well as the microfinance institution because of competition.
Lack of security in holding and storing money.
Making the choice of business difficult.
Lack of financial literacy among members - with respect to timely repayment.
Volume 4, Number 3, July – September’ 2015
ISSN (Print):2279-0934, (Online):2279-0942
PEZZOTTAITE JOURNALS SJIF (2012): 3.735, SJIF (2013): 5.020, SJIF (2014): 5.996
International Journal of Retailing & Rural Business Perspectives © Pezzottaite Journals. 1825 |P a g e
DATA ANALYSIS AND INTERPRETATION
Indicator of Power Element
Table-2
Sources: Authors Compilation
Indicator of Building of Awareness and Capability
Table-3
Sources: Authors Compilation
Findings: From the analysis following mean findings are drawn:
Section A: Indicators of Power Element
Table-4
No. Indicators Mean
1 Ability to take decision at a household 2.24
2 Ability to control source of power 2.22
3 Ability to control source of power 2.63
Sources: Authors Compilation
S. No. Empowerment Variables Mean Std. Dev. Rank
Indictors
of Power
Elements
(A) Ability to take decision at the household 2.24 2
Savings decision level. 2.24 1.286666
Reduction in expenses. 2.32 1.236189
Invest more in Children‘s Education decision. 2.46 1.417241
Able to deal with financial Crisis of the family. 1.94 0.977502
(B) Ability to control source of power 2.22 3
Complete ownership of the resources. 2.46 1.486813
Able to work together as women without the different
of the caste & religion.
1.98 1.059264
(C) Ability to challenge societal power relation 2.63 1
Moving independently. 2.46 1.296935
Able to discuss freely with bankers. 3.18 1.100835
Indicators
of Building
of Awareness
and
Capability
(A) Ability to Participated in Non-Family Group 2.15 3
Resolution of inter and intra household conflict. 1.74 0.664247
Expression of views in family. 2.56 1.248019
(B) Action to bring gender equality 2.45 2
Moving independently. 2.46 1.312577
Participation in activities outside home. 2.5 1.297564
Interaction with bankers, government officers and non-
governmental organizations.
3.34
0.871546
Husband cooking during Emergency. 1.48 1.728985
(C) Legal and political Awareness 2.47 1
Women‘s participated in Gram sabha meeting. 2.82 1.480347
Participated in voting. 1.28 0.496518
Knowledge diffusion on basic civil rights and their protection. 2.36 1.453497
Mobilization on local Issues. 2.18 1.521144
Participated in local Government electorate. 2.76 1.546028
Participation in election As contestants. 3.44 1.402039
(D) Ability to manage Productive resources 1.94 4
Mobility of female labor. 1.6 1.010153
Increase female Employment in non-Traditional activity. 1.8 0.968904
Exchange of market Information & ideas Through women. 2.42 1.566095
Volume 4, Number 3, July – September’ 2015
ISSN (Print):2279-0934, (Online):2279-0942
PEZZOTTAITE JOURNALS SJIF (2012): 3.735, SJIF (2013): 5.020, SJIF (2014): 5.996
International Journal of Retailing & Rural Business Perspectives © Pezzottaite Journals. 1826 |P a g e
It is observed from the above table, it is seen that indicators of ―power‖ element includes the variables of ability to take decision at
household, Ability to control source of power and ability to challenge societal power relation in which the third variable ability to
challenge societal power relation ranks first followed by indicators of power element. So it is more impact on ability to challenge
societal power relation indicators and less impact on ability to take decision at the household variables. However, impacts on the
different variables are self-explanatory from their individual mean.
Section B: Indicators of Building of Awareness and Capability
Table-5
No. Indicators Mean
1 Ability to participated in non-family group 2.15
2 Action to bring gender equality 2.45
3 Legal and political awareness 2.47
4 Ability to manage Productive resources 1.94
Sources: Authors Compilation
It is observed from the above table it is seen that indicators of building of awareness and capability element includes the variables
of ability to participated in non-family group, action to bring gender equality, legal and political awareness and ability to manage
productive resources in which third variables legal and political awareness ranks first followed by indicators of building of
awareness and capability element. Therefore, it is more impact on legal and political awareness variable and less impact on ability
to manage productive resources. However, impacts on the different variables are self-explanatory from their individual mean.
CONCLUSION
It is observed from the above table, it is seen that indicators of ―power‖ element includes the variables of ability to take decision at
household, Ability to control source of power and ability to challenge societal power relation in which the third variable ability to
challenge societal power relation ranks first followed by indicators of power element. Therefore, it is more impact on ability to
challenge societal power relation indicators and less impact on ability to take decision at the household variables. However,
impacts on the different variables are self-explanatory from their individual mean and standard deviation. It is observed from the
above table it is seen that indicators of building of awareness and capability element includes the variables of ability to
participated in non-family group, action to bring gender equality, legal and political awareness and ability to manage productive
resources in which third variables legal and political awareness ranks first followed by indicators of building of awareness and
capability element. Therefore, it is more impact on legal and political awareness variable and less impact on ability to manage
productive resources. However, impacts on the different variables are self-explanatory from their individual mean and standard
deviation.
RECOMMENDATIONS
Considering the findings of the study and if the quality of the SHGs is taken into care, the role of SHGs towards empowerment
will undoubtedly improve. The following suggestions are prescribed in this connection:
Training in legal literacy, rights and gender awareness are important complements to micro-credit for the empowerment
of women. The members should be given necessary training and guidance for the successful operation of the group.
Meetings and Seminars may be organized where the members will get a chance to exchange their views and be able to
develop their group strength by interactions.
Steps needs to be ensured that the promoter and donor must come forwarded to provide skill development and training
to the members. Constant monitoring and collection of feedback from member SHGs is quite necessary.
Federation and joint liability groups of SHG functioning needs to promote.
The members of the SHG should be more active, enthusiastic and dynamic to mobilize their savings by group actions.
In this process, NGOs should act as a facilitator and motivator.
Marketing facilities for the sale of products of SHG may be created.
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Volume 4, Number 3, July – September’ 2015
ISSN (Print):2279-0934, (Online):2279-0942
PEZZOTTAITE JOURNALS SJIF (2012): 3.735, SJIF (2013): 5.020, SJIF (2014): 5.996
International Journal of Retailing & Rural Business Perspectives © Pezzottaite Journals. 1827 |P a g e
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