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MICRO FINANCING THROUGH WOMEN SELF- HELP GROUPS AND ITS SOCIO-ECONOMIC IMPACT- A CASE STUDY OF KONKAN REGION OF MAHARASTRA

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MICRO FINANCING THROUGH WOMEN SELF- HELP GROUPS AND ITS SOCIO-ECONOMIC IMPACT- A CASE STUDY OF KONKAN REGION OF MAHARASTRA ABSTRACT MURLIDHAR A. LOKHANDE* *Professor, Dr. Babasaheb Ambedkar Marathwada
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MICRO FINANCING THROUGH WOMEN SELF- HELP GROUPS AND ITS SOCIO-ECONOMIC IMPACT- A CASE STUDY OF KONKAN REGION OF MAHARASTRA ABSTRACT MURLIDHAR A. LOKHANDE* *Professor, Dr. Babasaheb Ambedkar Marathwada University, Aurangabad, Maharashtra, India. Micro finance programmes have been receiving a considerable attention world over for their potential to generate income and employment and alleviate poverty. The experience shows that the micro finance programme has a high degree of out reach to women i.e per cent of the aggregate clients in India in 2010, 73 per cent in Latin America, 70 per cent in Africa and 88 per cent in Asia. In India, National Bank for Agriculture and Rural Development (NABARD) sponsored SHG-Bank linkage programme is the fastly growing micro finance programme in the world covering 97 million poor households as on 31st March, Pinnacle Research Journals 16 The research paper was focused to find out whether micro finance really contributed to the socioeconomic empowerment of group members? To what extent, micro financing through women groups benefited the members? Out of 350 Women groups promoted by Sadbhav Foundation (33 groups), Raigarh district, Manav Sadhan Vikas (25 groups), Kudal, Sindhudurga district and Matru Mandir (19 groups), Ratnagiri district (Maharashtra state, India) 77 (22 per cent) were selected. Two members from each group (i.e.154 members) were selected deliberately. After joining the groups, the monthly average income and savings of the respondents had shown increase by per cent and per cent respectively. The confidence level of the respondents had increased to a great extent. They had reported active participation in socio economic activities. Overall personality index had shown growth of per cent. It was inferred that micro financing through women self help groups had brought a positive change in the lives of the members. The study concluded that poor, discriminated and underprivileged women if join the groups, can come out of poverty. KEYWORDS: Micro finance, warm money, social security, empowerment. INTRODUCTION LITERATURE SURVEY Access to financial services has got significance in the context of empowering the poor households and achieving Millennium Development goals. A few research studies have attempted to investigate the impact of Micro financing on women empowerment. According to a survey (World Survey on Women Development, 1999) more than 86 per cent women workers are in agriculture sector in India. In micro enterprises owned by women, they work for more hours but get less remuneration compared to men. It can be observed that women have been excluded from the formal financial services on the ground of their property less status, castes and discriminatory practices. In order to empower them micro financing to women micro enterprises could be a successful strategy. A study (Reddy, 2005) of 400 women SHGs in Andhra Pradesh observed that loan repayment rates were high. No post linkage follows up by bankers and NGOs. The default rate (loan) was as high as 12 per cent. Banker s attitude was found negative. Financial management of women SHGs had been weak. There was lack of coordinated activities. Because of this, fund management i.e. inflow and outflow of funds was found improper which resulted in to delay in repayment of loan (internal/external) and idle funds. It was also found the most of the members were not aware about legal aspects of group financing, accounting rules, transparency and accountability. So, the governance of SHGs was poor. There is need of evolving better governance in every organisations i.e. SHGs, SHPIs, MFIs and NGOs as all these are components of a massive programme. As far as human resources with the groups were concerned, the staff was less educated, unskilled and untrained. Focusing on the need of women empowerment, another study (Bipin Kumar,2009) inferred that most of the Rural women are not part of decision making process and hardly have the control over resources. So there is need of empowering them. The study by Patra S (2008) observed (75 groups) that interest charged on micro credit was 36% p.a. Around 70 per cent loans are used for consumption and 30 per cent for micro enterprises. However, the members were not found aware about financial skills. Pinnacle Research Journals 17 Micro financing through women self help groups for promotion of micro enterprises has become an effective strategy for alleviation of poverty and empowerment of poorest of the poor. Its significance is felt mostly in developing countries like India. Recently, the incidence of poverty in India ( ) was estimated to be 37.2 per cent according to Tendulkar Committee Report. Adjusting the inflation, it was estimated to be 32 per cent during Self help groups have brought about dramatic changes in the lives of lakhs of women. Besides financial services women got their voice, identity and empowerment (Jay ram Ramesh, 2007) The study conducted by Raya & Rajendra (2011) in 20 blocks of Vellore district covering 450 respondents from 90 women SHGs, observed that the NGOs is the largest motivating factor for majority of the respondents to join SHGs. The study inferred that after joining SHGs, they participated actively in gram sabhas, family decisions and they feel politically and socially empowered. Active women can undertake economic activities and upgrade their standard of living. A researcher (Reheman, 1986) inferred that active women in the groups had the say in family decision making process and also they had higher consumption standards in comparison with the inactive group members. Under Grameen Bank Project (Bangla Desh) poor women have been working as Village Telephone Ladies to facilitate communication in rural areas. The bank has provided micro loans to 90,000 beggars for micro trading. Dr. Mohammad Yunus opines that all the men have seeds of entrepreneurship and it is needed to give proper space to flourish them. Policy for the Empowerment of Women (2001) aims at creating conducive environment for women development, equality in political, economic, social and cultural spheres, and elimination of all types of discrimination against women. The World Bank Report (2001) women empowerment is the process of increasing the capacity of individual woman or groups of women to make choices and to transform choices into desired actions and outcomes. Central to this process are actions which both build individual and collective assets and improve the efficiency and fairness of the organizational and institutional which governs the use of these funds. DATA ANALYSIS AND DISCUSSION The study was based on the data collected from three districts of Konkan Region of Maharashtra state (India) during March 2010 to February 2011 with main aim of understanding the impact of micro financing through women self help groups on the lives of members. SOCIO-ECONOMIC PROFILE OF THE RESPONDENTS Age wise distribution of the respondents indicated that majority of the respondents i.e. 86 per cent were in the age group years. Young and dynamic members of the groups were instrumental in leading their groups in right direction. Of course, adults guided the members properly. Pinnacle Research Journals 18 As regards to marital status of the respondents, it was found that per cent of the respondents were married and 9.74 per cent respondents were unmarried. It was noteworthy that 5.84 per cent and 4.55 per cent of the respondents, being widows and divorcees respectively, were well supported by the groups. Of 154 group members, per cent members were from open category whereas per cent group members belonged to reserve category i.e. OBCs, SC/ST and VJNT-DNT. No discrimination was observed in working of the groups on the basis of caste or religion. Women self help groups are instrumental in evolving social engineering and integration. With regard to literacy level, the study disclosed that majority of the respondents i.e per cent were literate whereas 9.09 per cent respondents were illiterate. However, just 3.90 per cent respondents were post graduates and 8.44 per cent had completed graduation. The respondents educated up to primary, secondary and higher secondary level accounted per cent per cent and per cent respectively. It was observed that majority of the respondents i.e per cent were agriculture labor and per cent respondents were marginal farmers. It was noticed that the earnings of these respondents were uncertain and irregular. Of 154 women respondents, just 5.84 per cent were engaged in services like Anganwadi sevikas and Arogya sevikas in villages. Houses in rural areas of Konkan region are simply constructed mud walls or brick walls and covered with roofing tiles. More than 40 per cent of the respondents had Pakka houses and around 60 per cent had kaccha houses. TABLE-1 SOCIO-ECONOMIC PROFILE OF RESPONDENTS Pinnacle Research Journals 19 Socio-economic aspects No. of respondents Percentage to total Age 21 years years years years Marital status Unmarried Married Divorcee Widow Category General OBC SC/ST VJNT/ DNT Literacy level Illiterate Primary Secondary Higher secondary Graduation Post Graduation Occupation Agriculture Agriculture labour Service Housing facility Pakka house Kaccha house Monthly income Before joining groups Rs Rs Rs Rs Monthly saving Rs Rs Rs Source: Field survey, The data analysis indicated that income of the respondents ranged between Rs per month before joining the groups. On an average, daily income ranged from Rs to Rs per respondent. Considering the inflation rate ranging from 7-11 per cent during the study period, the per capita income was inadequate to meet the needs. Majority of the respondents i.e. 63 per cent of the respondents had daily earning less than Rs.50. As regards saving of the respondents before joining the groups, it ranged from Rs.50 to Rs.100 each per month. Of 154 respondents, per cent and per cent respondents had been saving Rs.50 each and Rs. 75 each per month respectively USE OF FUNDS FOR VARIOUS PURPOSES The group members have two sources of Funds available to meet their needs the funds generated directly by the members i.e. cold funds and the loan funds or grant funds obtained from outsiders i.e. warm funds. It was observed that more than 91 per cent of the respondents had used funds for business activities, per cent had used funds for marriages and more than 60 per cent of the respondents had used funds for other purposes such as, meeting emergency needs, repaying the debts and religious purposes. TABLE-2 USE OF FUNDS BY THE RESPONDENTS (N=154) Pinnacle Research Journals 20 Purpose No. of respondents Business activities 140 (91.00) Domestic needs 65 (42.21) Child education 75 (48.70) Family Health care 84 (54.54) Marriage 97 (62.99) Other, if any 95 (61.69) Source: Field survey, Note : Figures in parenthesis refer to percentage to total 154 respondents ECONOMIC ACTIVITIES STARTED BY GROUP MEMBERS After joining the groups, the members were encouraged to start their own ventures. Out of 154 members, 140 (91 per cent respondents) had started own activities. However, 9 per cent respondents had not started any activities. Initial aggregate investment and income generated amounted to Rs.35,35,797 and Rs.4,71,000 (p.m.) respectively. Pinnacle Research Journals 21 TABLE -3 ECONOMIC ACTIVITIES STARTED AFTER JOINING SELF HELP GROUPS Activity Nos. Initial investment (Rs.) Income generated (Rs.) Employment generated (Nos.) Pavbhaji center 5 97,500 17, Patravali making 3 36,750 6,735 3 Dairy 7 1,24,565 15, Cloth center 5 2,17,535 21,895 8 Chiken center 3 55,275 12,563 6 Goat rearing 14 2,46,777 31, Vegetable vending 13 1,65,399 43, Bangle shop 5 64,850 14,800 7 Floriculture 4 84,452 10,052 6 Saree center 7 3,79,218 35, Papad/pickles 15 2,22,867 52, Xerox center 3 2,17,767 17,900 6 Grocery shop 7 4,21,841 33, Utensils shop 9 2,98,611 32, Beauty parlor 5 2,42,855 24,079 8 Tea stall 5 75,300 13,768 5 Broom making 3 37,987 8,790 5 Tailoring 17 3,32,189 49, Thresher 3 87,611 12,300 6 Poultry 7 1,26,448 15, Total ,35,797 4,71, Average per activity 25, , Defunct group 14 members (9.09%) Source: Field survey, The aggregate employment generated by these activities was 216 jobs. On an average, the investment and income per activity was Rs.25, and Rs.3, respectively. Most of the activities started by the respondents were traditional and labor intensive Before joining the groups, the respondents were found collecting saving amounts varying from Rs.50 to Rs.100 per month. However, savings was voluntary and irregular activity in case of majority of the members. But after joining the groups, saving activity became compulsory, disciplined and regular. On an average, the monthly saving amount before joining the group was Rs per respondent, which rose to Rs per respondent after joining the group, registering the growth by per cent (table-3). Monthly Savings Before joining SHGs TABLE- 4 MONTHLY SAVINGS OF THE RESPONDENTS SHGS No. of respondents Total Savings Monthly Savings after joining SHGs No. of respondents Total Savings Rs Rs.3950 Rs Rs Rs Rs.3225 Rs Rs Rs Rs.2400 Rs Rs Total 154 Rs.9575 Total 154 Rs Average member per Source: Field survey, Rs Average per member Rs It was observed that the average monthly income of the respondents before joining the groups was Rs.1, per respondent. There was significant growth in average monthly income of the respondents by per cent after joining the groups and starting their own economic activities (table-4). TABLE-5 MONTHLY INCOME OF THE RESPONDENTS Pinnacle Research Journals 22 Average Monthly income before joining groups (Rs.) No. of respondents Total income (Rs.) Average Monthly income after joining groups (Rs.) No. of respondents Total income (Rs.) ,250 2, ,98, ,500 3, ,67, ,250 4, , ,500 5, ,750 Total 154 2,04,500 Total 154 5,05,698 Average monthly income Average monthly income Source:- Field survey, It was noticed that the groups were instrumental and effective in confidence building, self respect, decision making and problem solving capacity of the members. After joining the groups, per cent and per cent of the respondents had reported increased confidence to speak with family members and general public. TABLE-6 CHANGES IN PERSONALITY OF GROUP MEMBERS (N-154) Impact factor Before joining SHG After joining SHG Percentage Change Speaking confidently 23 (14.93) 102 (66.23)* with family members Speaking confidently 24 (15.58) 88 (57.14) with outsiders Speaking confidently 21 (13.64) 94 (61.04) in public Feel self respected 18 (11.69) 117 (95.97) Feel self relied 25 (16.23) 109 (70.78) Feel self secured 22 (14.28) 115 (74.67) Decisions in family 20 (12.99) 98 (63.64) matters Buying/selling 29 (18.83) 97 (62.99) decisions Decisions in financial 30 (19.48) 103 (66.88) matters Started own venture 24 (15.58) 140 (90.91) Risk taking attitude 21 (13.64) 112 (72.73) Problem solving 26 (16.88) 113 (73.38) capacity Source: Field survey Note: * figures in parentheses indicate percentage to total 154 respondents. It was noteworthy that after joining the groups, more than 80 per cent of the respondents felt respected by family members and others and per cent respondents had expressed feeling more secured because of financial and social support extended by the groups. Pinnacle Research Journals 23 As far as decision making was concerned, after joining the groups, more than 50 per cent of the respondents had reported their major role in family decisions. More than 75 per cent of the respondents had started their own economic activities after joining the groups which indicated their risk taking attitude and problem solving capacity. It was also observed that there was scope for coverage of remaining members under personality development process. SOCIAL EMPOWERMENT It was observed that the participation of the respondents in various activities was negligible before joining the groups. There was good progress after joining the groups as the members were encouraged and enabled to participate in various social activities. After joining the groups, more than 50 per cent of the respondents had reported active participation in attending social meetings, participating anti dowry campaign, anti alcoholism campaign and organizing group marriages. TABLE-7 EMPOWERMENT ASPECTS (N-154) Sr. no. Empowerment Aspects No.of respondents. Social empowerment B* A* 1 Attending social meetings/ gatherings 21 (13.63) 79 (52.29) 2 Participating Anti dowry campaign 20 (12.99) 81 (52.60) 3 Participating Anti Alcoholism campaign 11 (7.14) 78 (50.65) 4 Participating Nirmal Gram programme 21 (13.64) 93 (60.39) 5 Organizing group marriages 23 (14.93) 83 (53.90) Political Empowerment 1 Attending political meetings 22 (14.29) 96 (62.34) 2 Election campaigning 23 (14.93) 90 (58.44) 3 Contesting election 16 (10.39) 38 (24.67) 4 Elected members of ZP, BC, VC 4 (2.60) 22 (14.28) Economic Empowerment 1 Average monthly income per member (Rs.) Average monthly saving per member (Rs.) No. of respondents borrowing from moneylenders 59 (38.31) 11 (7.14) Source: Compiled from questionnaire Note : Figures in parentheses indicate percentage to total 154 respondents *B stands for Before Joining the group and A for After Joining the group Nirmal Gram programme which is related to village cleanliness and hygiene, attracted more than 60 per cent of the respondents. However, the fact should be disclosed here that yet there were 50 per cent members as non participants in various social activities. So, in order to empower the women members in its true sense, there is need of creating conducive social environment and persuasion to increase active participation of all members in social activities. POLITICAL EMPOWERMENT Pinnacle Research Journals 24 The disclosure of the study was that women members were somewhat hesitative for joining political activities before joining the groups. As a result of awareness created by the groups, more than 62 per cent of the respondents had started attending political meetings, per cent of the respondents joined election campaigns. It was noticeable that per cent of the respondents had contested the elections and per cent group members got elected to various positions on Zilla Parishads, Panchayat Committees and Village Panchayats. ECONOMIC EMPOWERMENT It was disclosed that average monthly income was Rs.1, per member before joining the group which increased to Rs.3, per member after joining the groups registering an increase by per cent. After joining the groups, the average monthly saving increased to Rs per member from Rs per member earlier, posting an increase by per cent. AVERAGE MONTHLY SAVINGS It was also noticeable that the dependency of the respondents had reduced significantly after joining the groups. Before joining the groups, more than 38 per cent of the respondents used to borrow from moneylenders which reduced significantly to 7.14 per cent respondents after joining groups. The groups were instrumental in developing entrepreneurial skills and encouraging them to start own activities. Out of 154 members, 140 (91 per cent) started own economic activities. THE FOLLOWING WERE THE MAJOR FINDINGS OF THE STUDY Majority of the respondents i.e. 86 per cent were in the age group years per cent of the respondents were married per cent members were from open category whereas per cent group members belonged to reserve category i.e. OBCs, SC/ST and VJNT-DNT. More than 90 per cent of the respondents were literates. Most of the respondents i.e per cent were agriculture laborers and per cent respondents were marginal farmers. Majority of the respondents i.e. 63 per cent of the respondents had daily earning less than Rs.50. Pinnacle Research Journals 25 More than 91 per cent of the respondents had used funds for business activities. 60 per cent of the respondents had used funds for other purposes such as, meeting emergency needs, repaying the debts and religious purposes. After joini
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