Micro Finance Complete Project Vijay

The Role Of Microfinance In Women Empowerment
Institute of management studies shankarghatta Page 1

CHAPTER-1

INTRODUCTION & RESEARCH DESIGN



Introduction & Research Design
INTRODUCTION
Micro finance is a broad term that includes deposits, loans payment services and
insurance to poor people in rural area. In general this concept is understood as providing
poor families with small loans to help them to engage in productive activities or expand
their tiny business. Microfinance programmers in India are become very powerful
instrument in poverty alleviation and women empowerment
Women constitute half of the world`s population, perform nearly two thirds of its
work hours but receive only one-tenth of income and own one-hundredth of property.
They are vital part of the Indian economy, constituting one third of the national labor
force and forming a major contributor to the survival of family. About 89% of total
female labor is involved in agriculture and allied sectors. Women have extensive work
load with dual responsibility of farming in general and house hold production in
particular in areas.
Microfinance is a broad term that includes deposits, loans, payment services and
insurance to poor. In general this concept is understood as providing poor families with
small loans to help them to engage in productive activities or expand their tiny business.
Microfinance programmes in India are becoming a powerful instrument in poverty
alleviation and SHGs women empowerment. It has empowered both socially and
economically. These microfinance interventions helped the poor women in maintaining
and improving their live hood.
Among various schemes and projects of government the financial assistance by
microfinance institutions has been considered as a potential means of alleviating scale
unemployment, especially in rural areas. And also the main objective of microfinance
institutions is support for poor women entrepreneur and also to provide assistance for the
development of the new women entrepreneurs. An attempt is made in this project to
analysis the role of microfinance by MFIs in the empowerment of SHGs women.


Empowerment of rural has emerged as an important issue in recent times. The
economic empowerment of rural is being regarded these days as a Sine-quo-non of
progress for a country; hence, the issue of economic empowerment of rural is of
paramount importance to political thinkers, social scientists and reformers. The Self Help
Groups (SHGs) have paved the way for economic independence of rural. The members of
SHGs are involved in Micro Entrepreneurships. Through that, they are becoming
economically independent and providing employment opportunities to others. Economic
empowerment of rural leads to development of family and community. This statement is
proved by a collective Micro Entrepreneurship in rural place through development.
Statement of the Problem:
A significant development in recent years has been the mushrooming of
community based organizations as SHGs and initiatives at the local level for women.
Reports indicates that MFIs programmes, often in the form of savings and credit or
microfinance schemes have successes in changing the lives of poor women in SHGs,
enhancing incomes and generating positive externalities such as increased self help
group self-esteem. But still these programs are not reaching the women up to the mark
therefore the present study is focused on finding out the advantages and challenges faced
by the women as well as the SHGs in reaching them.
Objectives of the study:
1. To study the role of SHGs in empowering women
2. To study the economic gains derived by the members after joining the SHGs
3. To study and examine the social benefits derived from the members
4. To study the satisfaction of the women from the performance of SHGs
5. To offer suitable suggestions to the problems encountered during the study



Scope of study:
The study is restricted to bring facts of microfinance helps in the SHGs in
shivamogga district. The study is focused only on selected SHGs like
Methodology of Data Collection
Primary data:
Primary data presumes to be original in character. In this study the primary
data is collected from rural small entrepreneurs with the help of simple structured
questionnaire.
Secondary data:
Secondary data are already recorded by someone, in this study the secondary
data is collected from various MFIs publishments, CRISIL reports, books from the library
and E-sources.
Sampling:
Random sampling has been used in this survey. Sample size of 50 was taken.
The respondents were given various questions to answer in the form of Questionnaires.
Sampling population:
In this study the population is the rural people`s, who were assistance taken by
MFIs.
Sampling unit:
The sampling units is the rural population who taken assistance by MFIs of
shivamogga that may be different parts of the shivamogga district.



Sample size:
The population being carried out among 50 respondents. They were the rural
area people of shivamogga.
Statistical tools used for data analysis:
Data were collected from the respondents by way of administering questionnaire.
A Structured questionnaire, with a set of 21 questions, was prepared for eliciting
Information from the respondents, and Hypothesis chi-square test has been used
generally means a proportion or a set of propositions set forth as an Explanation of
the project report. In this report to interpret chi-square test has been used.
Limitations of Study
Because of time constraint the present study has not covered all the
members of SHGs. And also the study is only considered 4 SHGs
operating in Shivamogga city.



Chapter scheme
Chapter-1
The first chapter is the introduction chapter. It contains Introduction,
Statement of the problem, Objectives of the study, Need and Scope of the
study, and Data Collection and Chapter scheme, limitations of the study.
Chapter-2
The second chapter gives insights into the micro finance Industry
profile.
Chapter-3
The third chapter gives insights into the micro finance and
empowerment literature review.
Chapter-4
The fifth chapter states the Analysis and interpretation of data. In
this chapter the collected data are analyzed with the help of hypothetical
and statistical tools and interpretations are made.
Chapter-5
The sixth chapter contains findings, suggestions and conclusion
inferred from the study.



CHAPTER-2

MICROFINANCE INDUSTRY IN INDIA



Chapter-2
Microfinance industry in India
Introduction
DEFNITION OF MICROFINANCE

Microfinance is the supply of small loans and other financial services to people
with a low income that would otherwise have no access to credit from traditional banks
and financial institutions. Microfinance is seen by some as a viable solution to reduce
poverty, enabling those at the Bottom of the Pyramid to reshape their destiny.

Microfinance basically consists of offering small loans to poor working people of
developing countries, who carrying out their daily business activities, are able to repay
their debts at the end of a fixed period, usually a day or a week. The value of the loans
generally ranges from 1$ to a maximum of 200$. The money is lent from local
organizations, so called Microfinance Institutions (MFI), when certain conditions are
met. The concept of microfinance when applied to insurance services takes the name
of Micro insurance.

Origin of microfinance, brief history

The history of microfinance goes back to 1974 when Professor of Economics at
University of Chittagong, Dr. Muhammad Yunus, with the intent of finding a practical
solution to poverty, experienced the first microfinance attempt himself. During a visit to a
rural village in Bangladesh, he lent 27$ to a community of 42 people who were otherwise
unable to make out a living.



The result was that those people were able to invest that amount in their small
woodwork business, sell their products, buy food and other basic stuff and give to the
money back to the professor with interest. Inspired by his successful experience and after
in-depth studies on the topic, he started a professional micro-financial activity and in
1983 he created the Grameen Rural Bank, the first Microfinance Institution that today
accounts for 1 billion $ in loans spread to over 7 millions borrowers. In 2006 professor
Yunus has been awarded a Nobel Peace Prize for his brilliant methodology.

During the 80s and the 90s, after many researches and experiments proving the
business viability and profitability of Yunus' concept, microfinance institutions grew
constantly in number till topping 3000 in 2006. Most microfinance institutions started
their business as non-profit organizations sustained by grants and subsidies, and have
been able to turn into for-profit corporations attracting investors globally.

Major banks, attracted by high growth rates, started instituting funds focused on
microfinance that allow investors from all over the world to invest in this new industry,
movement or Microfinance Channel, as it has been defined by management scholars.
THE MICROFINANCE CONCEPT IN MORE DETAIL

The concept of microfinance is based on a primary principle holding that most
human beings will do their best to be well off, provided they have the required tools. This
is one of the reasons, combined with a strict selection of borrowers, why microcredit has
the highest repayment rate if compared to all other form of loans issued by traditional
banks. Unfortunately, studies demonstrated that microfinance cannot work everywhere
and not everybody is a good candidate for microcredit. In order to be useful and
successful for the borrower while viable and profitable for an institution, the
following microfinance conditions must be met.



1. Developing or third world economies. Microfinance is characterized by low-
amount financial services and that is why it finds application in developing or
third world economies. Poor people living in industrialized countries cannot
leverage 10$ to grow their small business.

2. A socio-economical environment that offers market opportunities for small
craft businesses. The vast majority of microcredit is issued to borrowers who
have environmental-friendly craftiness of any sort, such as woodworks, sewing,
agriculture, etcthat perfectly fit sustainable development of local small
communities. Regions with extremely low density, very poor infrastructures, lack
of law and order, or having a large portion of the population affected by diseases
are better of with grants or investments in infrastructure and education. In some
parts of Africa the economic system is so weak that people would have nothing to
do with a small amount of money, especially where barter is still the most
common form of trade.

3. The mentality to honestly escape poverty. Values and mentality matter: it is
fundamental that borrowers are members of a community that commit to honestly
escape poverty. Many studies demonstrated that women, who are currently the
largest and most preferred category of microcredit clients, are better loans payers
than men because of the care they have for their families well being.
Moreover, community pressure put forth by people living in small local
communities, such as in villages located in India or Guatemala, helps borrowers
to maintain a high level of commitment to repay their debts. If a borrower
couldnt pay an installment the other villagers would probably help her. If she
would be unwilling to meet her obligations the pressure exerted on her from the
other villagers (happy with microcredit) would be too high.



What is empowerment?
Empowerment is defined as the processes by which women take control and
ownership of their lives through expansion of their choices. Thus, it is the process of
acquiring the ability to make strategic life choices in a context where this ability has
previously been denied.
The core elements of empowerment have been defined as agency (the ability to
define ones goals and act upon them), awareness of gendered power structures, self-
esteem and self-confidence (Kabeer 2001). Empowerment can take place at a hierarchy
of different levels individual, household, community and societal and is facilitated by
providing encouraging factors (e.g., exposure to new activities, which can build
capacities) and removing inhibiting factors (e.g., lack of resources and skills).
Two vital processes have been identified as important for empowerment. The first
is social mobilization and collective agency, as poor Women often lack the basic
capabilities and self-confidence to counter and challenge existing disparities and barriers
against them. Often, change agents are needed to catalyze social mobilization
consciously. Second, the process of social mobilization needs to be accompanied and
complemented by economic security. As long as the disadvantaged suffer from economic
Deprivation and livelihood insecurity, they will not be in a position to mobilize (UNDP
2001).
Three types of empowerment
Economic empowerment
Womens access to savings and credit gives them a greater economic role in
decision-making through their decision about savings and credit. When women control
decisions regarding credit and savings, they will optimize their own and the household's
welfare. The investment in women's economic activities will improve employment
opportunities for women and thus have a 'trickle down and out' effect. The financial
sustainability and feminist empowerment paradigms emphasize women's own income-


generating activities. In the poverty alleviation paradigm, the emphasis is more on
increasing incomes at the household level and the use of loans for consumption. In the
feminist empowerment paradigm, individual economic empowerment is seen as
dependent on social and political empowerment.
Increased well-being
Access to savings and credit facilities and women's decision about what is being
done with savings and credit strengthens women's say in economic decisions of the
household. This enables women to increase expenditure on the well-being of themselves
and their children. This is the main concern in the poverty alleviation paradigm. Women's
control over decision-making is also seen as benefiting men through preventing leakage
of household income to unproductive and harmful. Other welfare.
Interventions are advocated in addition to micro-finance, typically nutrition, and
health and literacy campaigns to further decrease vulnerability and improve women's
skills. In the financial self-sustainability and feminist empowerment paradigms, improved
well-being is an assumed outcome from increasing women's economic activities and
incomes.
Social and political empowerment
A combination of women's increased economic activity and control over income
resulting from access to micro-finance with improved women's skills, mobility, access to
knowledge and support networks. Status within the community is also enhanced. These
changes are reinforced by group formation, leading to wider movements for social and
political change. The financial self-sustainability paradigm and the poverty alleviation
paradigm assume that social and political empowerment will occur without specific
interventions to change gender relations at the household, community or macro-levels.
By contrast, the feminist empowerment paradigm advocates explicit strategies for
supporting women's ability to protect their individual and collective gender interests at
the household, community and macro-levels.


Brief profile of MFIs
Asmitha Microfinance LTD.
Asmitha Microfinance Ltd. (AML), an NBFC, began its microfinance operations
in 2002; it is one of the top five microfinance institutions (MFIs) in India. In terms of
loans outstanding. AML lends to five-members groups of women under the Grameen
Bank model, at a flat interest rate of 12.5 percent to 15 percent, and charges an upfront
one-time processing fee of 1.15 to 2.50 percent of the loan amount.
AML has a strong rural presence. Most of the loans are given for income-
generation activities; trading and animal husbandry account for about two-thirds of
AMLs loans. As of march 31, 2008, AML was present in Orissa, Andhra Pradesh,
Karnataka, and Maharashtra: it has ventured into nine more state during the first half of
2008-2009 (refers to financial year, April 1 to march 31).
Grameen Financial Services Pvt. Ltd.
Grameen financial services pvt.ltd. (GFSPL) was incorporated in 1991 as sanni
collection pvt, ltd: it was acquired by its current management in 2007, GFSPL took over
the microfinance programme of T. Muniswappa Trust (TMT, popularly known as
grameen koota) grameen koota started its microfinance programme in 1999, with seed
capital support from grameen trust Bangladesh.
GFSPL lends to ten-member groups under the grameen bank model of lending and
offers three different loan product is a 50-week loan with a flat interest rate of 12percent.
The MFI charges an upfront fee of 1to3 percent of the loan amount, depending upon the
borrower profile (new or repeat) and the loan product. The company also provides health
insurance and cattle insurance to its borrowers through tie-ups with reference the
insurance companies. As on the September 2008, the MFI had a borrower base of more
than 150,000 borrowers across 17 districts of Karnataka. During second half of 2008-09
(refers to financial year, April 1 to march 31), the MFI has expanded its operations to


Maharashtra and has piloted individual loans in two urban branches at Bangalore and
Tumkur.
Shri kshetra Dharmasthala Rural Development project
Established in 1982 by Dr. D Veerendra Heggade, a trustee of the Shri Kshetra
Dharmasthala, Shri Kshetra Dharmasthala Rural Development Project (SKDRDP) is a
charitable trust. SKDRDP offers structured products with a focus on livelihood support
and asset creation; loans are disbursed to SHGs at an interest rate of 15 percent per
annum on a declining method basis. The loan tenure ranges between three and 10 years.
Borrowers also have to pay 1 percent of the loan amount towards service charges.
As on September 30, 2008, SKDRDP had 22 branches, covering 4,739 villages;
764,351 members (of which 612,482 were borrowers) from 76,662 SHGs. The
microfinance institution has operations in six districts of Karnataka- Udipi, Dakshina
Kannada, Shimoga, Chickmagalur, Koorg, and Uttar Kannada. The MFI, which is a non-
governmental organization (NGO), intends to consolidate its operations and plans to
attain 1million members by 2010.
SKS Microfinance Ltd.
SKS Microfinance Ltd. (SKSMPL) is Indias largest Microfinance Institution with
a member base of 3 million borrowers as on September 30, 2008. It was incorporated as
a private limited company in 2003 for taking over the microfinance activities of Swayam
krishi Sangam (SKS), a society that was registered in 1997 and began operations in 1998.
After obtaining the non-banking financial company (NBFC) license from the Reserve
Bank of India in January 2006, SKSMPL took over the operations of SKS. The
companys microfinance operations are spread over 15 states and one union territory as
on September 30, 2008.
The company follows the group-lending model, which closely resembles
Bangladesh-based Grameen Bankss model. While group loans have tenure of 50 weeks,
individual loans bear a term of 12 to 24 months. SKSMPL charges an interest rate of


23.6 per cent on a declining method basis in Andhra Pradesh and Karnataka and 28
percent in other states.
The poor, like the rest of society, need financial products and services to build
assets, stabilize consumption and protect themselves against risks microfinance serves as
the last-mile bridge to the low-income population excluded from the traditional financial
services system and seeks to fill this gap and alleviate poverty.
Microfinance loans serve the low income population in multiple ways by:
1) Providing working capital to build business;
2) Infusing credit to smooth cash flow and mitigate irregularity in accessing food,
cloth, shelter , or education; and
3) Cushioning the economic impact of shocks such as illness, theft, or natural disasters.
Moreover, by providing an alternative to the loan offered by the local moneylender
period they priced 60% to 100% annual interest, 2 Microfinance prevents the borrower
from remaining trapped in a debt trap which exacerbates poverty. Microfinance loans in
India range in size from $ 100 to $ 500 per loan with interest rates typically between 25%
and 35% annually. The Microfinance model is designed specifically to help the income
population overcome typical challenges such as illiteracy, lack of financial knowledge
and deficiency of collateralizable assets. At the same time, the model takes advantage of
existing community support systems and networks to encourage financial discipline and
ensure high repayment rates.
Microfinance in India an overview
The Indian Microfinance sector presents a strong growth story. Its growth
performance was impressively sustained through the liquidity crunch and continued at
an increased rate in the second half of 2009.as of March 2009, the MFIs in India reported
a client base of 22.6 million with an outstanding portfolio of more than $2billio0n. 7 over
the past five years, the sector has delivered a CAGR of 86% in the number of borrowers
and 96% in portfolio outstanding. In the 12 months from march 2008 to march 2009 , the


Microfinance industry experienced a 59% growth in its client base from 14.2 million to
22.6 million and 52% growth in its portfolio outstanding which increased from $1.5
billion to 2.3 billion. 8 this reflects a 14% of increased in the absolute growth in portfolio
outstanding and 33% increase in the absolute growth in the number of borrowers from
2008 to 2009.
Source: Microfinance India state of the sector report 2009
These numbers demonstrate the fundamental strength of the industry and the
potential it still has to expand. Nonetheless, as presented by the table, the year-on-year
growth rate has been declining, illustrating the increasing maturity of the sector. Though
decreasing, the growth rate is still high and is reflective of the industry approaching
more sustainable rate of expansion rather than a reversal of the trend observed thus far.
As the industry matures, it is also nearing an inflexion point and is considering more
sophisticated growth strategies through diversifying product offerings, client targeting
and creative financial and non financial solution, which will allow the sector to grow at a
continuous pace while preserving its solid performance and abiding by its social mission.

Year ending
31
st
march
2004 2005 2006 2007 2008 2009
Outstanding
portfolio ($
millions )
$80 $252 $496 $824 $1,535 $2,346
Growth rate -- 215.00% 96.80% 66.10% 86.30% 52.80%
Borrowers
(millions)
1 2.3 4.9 7.9 14.2 22.6
Growth rate ------- 130.00% 113.00% 61.20% 79.80% 59.20%


The Karnataka issue
In the first half of 2010-2011, part of Karnataka was swept by a large number of
defaults. The defaults were triggered by a transport strike which hampered the local
economy and thus the borrowers ability to repay their existing debts. The repayment
problem, which was limited in scale, was escalated into a more widespread and urgent
issue by some Muslim community leaders who urged group defaults by citing communal
factor. In Mysore, two bouts of communal rioting forced some of the borrowers to
temporarily migrate out of the area leading to defaults which eventually escalated into
group defaults.
While the issues were in fact escalated by communal leaders, there were some
underlying issues related to over-lending which were present in each of the area affected.
The issue highlights the need for lending and expansion strategies that are more
cognizant of the client true financial capacities and risk profiles. From an operational
viewpoint, this entails that MFIs expand over variety of geographies and tap varied client
profiles. One of the critical ways to achieve greater inclusion is by serving a large
segment of the disenfranchised, from the perspective of geographies and client profiles. A
more inclusive approach will help MFIs diversity their risk, cushion negative impacts
from future crises and ameliorate unhealthy competition in a single area. Moreover,
reaching out to untapped markets will limit over-lending to clients in microfinance
saturated areas, in turn better serving the MFIs social mission over long run.
MFIs coming out of the crisis, have written off their losses. The four to five major
MFIs operating in Karnataka are collectively addressing the situation and working even
more closely with local administration and the community leaders to resolve the issue.
MFIs are making individual efforts at the field level to influence the clients repay. It has
been observed that the clients are now being selective and trying to repay to the MFIs
who have managed to develop better and strong client relationships.



Product offering
Thus far, microfinance institutions have largely limited their product and service
offering even within the confines of financial inclusion. In fact their product innovation
has been limited to credit which is intended to serve a variety of needs as shown by the
box below. The limited product innovation is understandable given the sector`s primary
focus has been on refining its business model and gaining scale to become financially
sustainable.
Despite following a single-product model, the sector has experienced remarkable
growth can only be expected to continue as product innovation and diversified service
offerings attract and retain greater number of customers with variety of needs.
Products and purpose

Existing products

1. Micro-enterprise /
small business
loan
2. Agricultural loan
3. Livestock loan
4. General
Working capital /business
start-up

Crop/Farm-related
Dairy /poultry
Consumption

New /Niche products

1. Education loan

2. Housing loan
Academic/vocational

Home improvement/ new
home

The very same clients that the sector currently serves have a plethora of alternate
needs for basic products services, financial and non-financial which can affect
sustainable, long-term achievements in their quality of life. Fortunately, reorganizing this
pent-up demand, mature MFIs are beginning to take concrete steps toward expanding
their product basket, at least within the context of financial services.


Along with credit, MFIs are heavily exploring the possibility of providing
savings/deposit services, micro-insurance and remittance services.
Savings
Access to a savings mechanism likes that which is available through
commercial banks, is usually held by the microfinance industry to be the most urgent
need to enhance the economic security of the poor. Due to RBI regulations, Non -banking
microfinance company (NBFC) MFIs cannot currently accept interest-bearing deposits,
unless they provide the service through a section 25 business correspondent conduit. This
structure prohibits the conduit from charging any fees to execute this function and limits
its reach within a limited radius of the bank branch. MFIs are lobbying the RBI to relax
these regulations to allow NBFCs to operate as business correspondents, Charge an extra
fee for the deposit-taking service and delimit the geographical reach of their operations.
These changes would not only make deposits a viable commercial product, but also allow
MFIs to offer it to a broader set of clients.
Insurance
While credit can serve to enhance a household`s income, insurance can serve to
cushion the negative economic impact in the event of an emergency. Without insurance, a
single incident can often impoverish a household, even without insurance; a single
incident can often impoverish a household, even with access to micro-credit, especially if
the emergency affects the main earning members. A number of MFIs already offer micro-
insurance products to their clients. The most basic products insure against health and
accidental death. Companies such as satin and BASIX usually tie the insurance products
to their credit products, which make the availability of credit contingent on the client
availing insurance. The rationale behind packaging the loan and insurance together is that
often clients do not understand the importance or benefit of insurance until they face an
emergency. From a commercial viewpoint, the MFI is in effect insuring its loan against a
crisis in the client`s household, since insurance hedges against total financial collapse and


thus ensures repayment of the loan, albeit in a delayed fashion. Similar to customers,
BASIX also links livestock loans to livestock insurance for a similar reason-it cushions
the financial blow and increases the likelihood of a successful loan recovery. We can
expect the number of insurance products available to increase as MFIs expand beyond
their core product and clients become more aware of the benefits of insurance.
Remittance
Domestic labor migration has a long history in India and is on the rise given
disparities in growth across statesmigrants need a fast, low-cost, convenient, safe and
widely accessible money transfer service. In India, remittance services can be enabled by
the provision of savings and thus need to be provided in tie-ups with banks and post
offices. In some cases, MFIs provide remittance services by establishing their presence in
a migrant destination to channel remittances back to the community in the migrants` area
or origin or by establishing a tie-up with another MFI, bank or money transfer company
in the area of origin. Going forward, the role of technology will become more important
in facilitating the development of alternative channels and payment mechanisms.
Non financial products
Within product offerings, MFIs are considering expanding their activities beyond
the realm of financial services since this can provide synergies linked to future expansion.
Microfinance client have myriads of unmet needs such as healthcare and education as
well as livelihood requirements which can enhances their income, employment potential
or quality of life. Given MFIs existing relationships with this population segment, they
would be an ideal channel to provide these services. While MFIs may not want to delve
into product lines that are fundamentally different from their core business, they could
easily act as conduits to allow other agents to deliver these services to their customers.
The microfinance industry as a whole is now experimenting with a wide variety of
potential models that could be based to deliver non-financial services.


For example, BASIX offers a host of alternative services to its clients. Beyond the basket
of credit and other financial products and services, BASIX also provides low income
customers with livelihood services, including agricultural and business development
consulting services, to help microfinance clients use their loans more effectively. BASIX
offers these alternative services to its clients through different entities housed less than
one umbrella. These groups have tremendous synergy and contributes to each other`s
growth and prosperity. The credit business enables customer acquisition, while the
insurance business mitigates risk, and agricultural and business development service
enables customer retention.
The consulting and IT business enhances BASIX`s revenues while the social
business enable research and development which contribute to BASIX`s strategy
development. In addition to livelihood services, several MFIs are examining the
feasibility of providing critical basic services to deliver low cost healthcare, education
and vocational training.
For example, Spandana is currently developing a comprehensive low cost healthcare
delivery model focused on the healthcare needs of women and children. BASIX has
launched a vocational training academy to impart education in rural development and
management to potential job seekers from low income communities. These participants
would be deployed in the rural/semi urban areas with BASIX or other organizations
offering financial services to the poor. In additional to being important avenues for
productive utilization of credit by MFI clients, these types of services have a strong
potential to reinforce long-term clients relationships. Most importantly, the evolving
delivery model for low cost education and healthcare has similar operational elements as
the highly successful microfinance model including efficient distribution, high
throughput and Para-skilling of low cost resources to address the last mile inclusion
challenge.



Investment climate
Today, microfinance is gaining prominence as a viable asset class globally,
particularly in India. MFIs in India have continued to attract large amounts of capital
despite the global economic recession. Currently, its reported that over 100 microfinance
investment vehicles (MIVs) exist global and India is a focus for many of them due to
its large market size, growth capacity, profitable business models and potential
development impact. Moreover, mainstream investors are beginning to participate in this
sector, pickup larger stakes than the social investors that have been dominant so far. The
entrance of mainstream investors is indicative of an industry that is maturing, but is still
expected to grow at a high rate.
Valuations in the microfinance sector reflect this expectation and surpass that of
traditional institutions in the financial services space. Moreover, Indian MFIs trade at
significant premia to MFIs in other parts of the world. MFIs across the world face an
equity valuation of 1.5 xs to 3.0x books value, whereas Indian MFIs face a valuation that
is 3.0xs to 4.0x book value. This premium is driven partly by the generous amounts debt
available to the industry to expand which in turn enables MFIs to achieve returns on
equity of approximately 20% to 30%. 16 these premium levels are also identical to the
premia to book value at which private sector banks and non-banks have traded in the
Indian capital markets which have averaged over 3.5x to 4.0x book value throughout
the last seven to ten years in the short run, as mainstream investors gain interest in the
Indian microfinance industry and infuse larger amounts of capital at higher prices, equity
will continue to trade at a premium.
A point to note here is that even though the microfinance industry is reaching
maturity, the large amounts of untapped geographical territory and client base combined
with the MFIs wide network create potential for enormous sustainable growth in the
future. As discussed earlier, MFIs and other service providers are beginning to realize the
significant value of the network that has been created by MFIs and efforts are underway
to utilize them to deliver both, financial and non-financial products and services.


These factors will continue to impact the supply of equity for Indian microfinance
and hence the equity valuations .furthermore, since this untapped demand is unlikely to
be satisfied in the short or medium term, while valuations will be tempered by cautious
investors, premia driven by fundamental growth expectations can be expected to prevail
through the short and medium term as MFIs re-engineer their strategies to take
advantages of the unsatisfied microloan demand.



CHAPTER-3

LITERATURE REVIEW



Literature Review
Women Empowerment Programs
S. Shiny Nair discussed in her one of the articles as about women
empowerment program in her below articles the empowerment of women is one of
the central issues in the process of development of countries all over the world. Tamil
Nadu has a glorious tradition of recognizing the importance of empowering women over
several centuries. The present paper is based on womens empowerment programs and its
implementation and utilizations. The paper concludes the details of womans
empowerment in some specific challenges faced by the women according to the effective
utilization of empowerment program.
Empowering women is a prerequisite for creating a good nation, when women
are empowered, society with stability is assured. Empowerment of women is essential as
their value systems lead to the development of a good family, good society and ultimately
good nation. - Dr.A.P.J. Abdul Kalam
Empowerment is the One of the key factors in determining the success of
development is the status and Position of women in the society. This means that the
neglect of women in the envelopment process of any country constitutes a human
resource waste. Therefore, should be that of moving steadily and firmly in the direction
of economic development by involving women. True development means the
development in the three categories of a woman. These are Individual, social, and
economic development. Individual development means increased skills and capability,
greater freedom, creativity, self-discipline, responsibility and material well being.
IN THIS article womens Understanding power is more when at the core of the
concept of empowerment is the idea of power. The possibility of empowerment depends
on two things. First, empowerment requires that power can change. If power cannot
change, if it is inherent in positions or people, then empowerment is not possible, nor is
empowerment conceivable in any meaningful way.


What is women's empowerment?
Women's empowerment is not a Northern concept. Women all over the world,
including countries in the South, have been challenging and changing gender inequalities
since the beginnings of history. Women's empowerment has five components: women's
sense of self-worth; their right to have and to determine choices; their right to have access
to opportunities and resources; their right to have the power to control their own lives,
both within and outside the home; And their ability to influence the direction of social
change to create a more just social and economic order, nationally and internationally.

Women Empowerment & Social development
This articles is presented by Mrs. Dr. Jelsy Joseph she analysis the women
empowerment & social development in India as per discussed in this articles India
has also ratified various international conventions and human rights instruments
committing to secure equal rights of women. He Constitution not only grants equality to
women, but also empowers the State to adopt measures of positive discrimination in
favor of women. Womens empowerment is an important agenda in the development
efforts. There has been significant shift in approach of the district administration towards
the development of women, especially the poor & the illiterate. When you train a woman,
you help the entire family, the village and the nation. The current paper focuses on
womens empowerment in the domestic sphere. So Empowerment of women that will
have lasting impacts must involve consciousness raising before the social construction of
gender, which subordinates women in the family, class, caste, religion, or society, can be
changed. The economic empowerment approach has relied on improving women's
control over economic resources and strengthening women's economic security.



EMPOWERMENT OF WOMEN
Empowerment is a multi-faceted, multi-dimensional and multi-layered concept.
Womens empowerment is a process in which women gain greater share of control over
resources - material, human and intellectual like knowledge, information, ideas and
financial resources like money - and access to money and control over decision-making
in the home, community, society and nation, and to gain `power'. According to the
Country Report of Government of India, "Empowerment means moving from a position
of enforced powerlessness to one of power".
EDUCATION OF WOMEN
Education to women is the most powerful instrument of changing their position
the society. Education also brings about reduction in inequalities and also acts as a means
to improve their status within the family. In order to encourage education of women at all
levels and so there is a provision and acquaintance of education, schools, colleges and
even universities were established exclusively for women. To bring more girl children,
especially from marginalized BPL families, into the main stream of education,
Government has been providing a package of concessions in the form of free supply of
books, uniform, boarding and lodging, clothing for hostilities, mid-day meals,
scholarships, free by-cycles and so on. Women can play a major role in conservation and
restoration of the environment. Rural women use unconventional and nature friendly
source of energy in the form of animal dung, crop waste and fuel wood.



Womens Empowerment
Raghavendra Bhatt in his article women`s empowerment that how they
empowered by themselves in India discussed that Women constitute almost 50% of
the world's population. As per as their social status is concerned, they are not treated as
equal to men in all the places. A person may said to be powerful when he/she has control
over a large portion of power resources in society. The extent of possession of various
resources such as personal wealth, such as land skills, education, information, knowledge,
social status, position held, leadership trains, capabilities of mobilization. It is now
widely believed that empowerment of women i.e., providing equal rights, opportunities
and responsibilities to women will go a long way in removing the existing gender
discrimination. Women empowerment in contemporary Indian society in forms of their
work, education, health and media images in the forms of their work, education, health
and media images in the context of lineage, rule of residence and household.
Before thinking about the empowerment of women, one needs to understand the
exact meaning of the word empowerment. According to Cambridge English Dictionary
empowerment means "to authorize". In the context of the people they have to be
authorized to have control over their lives. When applied in the context of development
the particular segment of population, the poor, the women, the vulnerable, the weak, the
oppressed and the discriminated have to be "empowered" to have control over their lives
to better their socioeconomic and political conditions,.
Women`s empowerment in contemporary India
Contemporary Indian society has been exposed to the broad processes of social
transformation, agricultural modernization and economic development, urbanization and
globalization. However, these processes have generated regional imbalances, sharpened
class inequalities and augmented the gender disparities. Hence, women have become
critical symbols of these growing imbalances. All these have affected adversely the
various aspects of women's empowerment in the contemporary Indian society. The


family and women's work is not enough to say that any society consists of men and
women.

Role of Microfinance for Promoting Integrated Rural Development and Poverty
Alleviation
Role of Microfinance for Promoting Integrated Rural Development and
Poverty Alleviation By Raja Shekar as In His Articles he discussed that The concept
and role of micro financing is well known for social upliftment as well as for the
development of rural and backward areas. Considerable efforts are being made at the
public and private sectors to bring in enough number of technologies in the rural areas for
their implementation and use through micro financing for the overall development.
However, support of micro financing agencies including banks is not reaching at the
grass route levels and therefore, most of the developmental programmers get diluted or
ineffective and many a times they dont even take off. In the rural areas people are not
much aware about the micro financial schemes and their benefits. Hence, in order to
provide sustainable rural development and progressive poverty alleviation the role of
micro financing agencies becomes an important in the context of current scenario. In the
present communication the whole mechanism of micro finance, its role to achieve
sustainable rural development and for social economic benefits are discussed in detail.
Economic Empowerment of women
Poverty Eradication
Since women comprise the majority of the population below the poverty line and
are very often in situations of extreme poverty, given the harsh realities of intra-
household and social discrimination, macroeconomic policies and poverty eradication
programmes will specifically address the needs and problems of such women.
Micro Credit
In order to enhance womens access to credit for consumption and production, the
establishment of new and strengthening of existing micro-credit mechanisms and micro-


finance institution will be undertaken so that the outreach of credit is enhanced. Other
supportive measures would be taken to ensure adequate flow of credit through extant
financial institutions and banks, so that all women below poverty line have easy access to
credit.
Young Women Empowerment Programmes 2008
The Youth Development Trust in its endeavor to respond to this plight has
extended its market due to one of its first 2006 Monitoring & Evaluation report finding,
which is lack of skills development training opportunities amongst deserving
disadvantaged Matriculates and Tertiary drop outs. As a result YDT in partnership with
the Embassy of Finland will be implementing programs in Gauteng and the North West
to 15 participants per province. YDT offers relevant programs to its constituency, hence
research is vital to design programs that directly respond to the challenges and identify
opportunities in that particular area or region.
Implication and Utilization of Government Programs
The empowerment of Rural Women is crucial for the development of the Rural
Bharat. Bringing women into the mainstream of development is a major concern for the
Government of India, which is why 2001 has been declared as the "Year of Women
Empowerment". The Ministry of Rural Development has special components for Women
in its programmes and funds are earmarked as "Women's Component" to ensure flow of
adequate resources for the same. The major Schemes, having Women's Component,
include the Swarnjayanti Gram Swarozgar Yojana (SGSY), the Jawahar Gram Samridhi
Yojana (JGSY), the Indira Awas Yojana (IAY), the National Social Assistance
Programme (NSAP), the Restructured Centrally Rural Sanitation Programme, the
Accelerated Rural Water Supply Programme, the (erstwhile) Integrated Rural
Development Programme (IRDP), the (erstwhile) Development of Women and Children
in Rural Areas (DWCRA) and the Jawahar Rozgar Yojana (JRY).



Indian Women: Natural Potential to be an Entrepreneur
Priya Dadhich has discussed that she had her analysis of the Indian
Women: Natural Potential to be an Entrepreneur in her whole articles It is general
belief in our society that role of women is restricted in four walls of home or you can say
women are involved in mainly household activities like cooking and reading. Economy
of any country can't boom without contributing women. The growing industrialization,
urbanization and social legislation and with the spread of education and awareness
women have shifted from kitchen to higher level of professional activities. Today's
women are taking more and more professional and technical degrees to cope up with
market need. The position of women and their status is any society is an index of its
civilization. Women are to be considered as equal partner in the process of development.
As technology speeds up lives women are as emerging economic force which cannot be
neglected by policy maker. The world's modern democratic economy depends on the
participation of both sexes.
In many developing countries including India women have much less access to
education, jobs, and income then men. Ever after five and half decade of planned
development Indian women have not achieved expected success in the mainstream of
life. Our country will be unable to have a competitive edge over others until and unless
the status and role of women is improved. In Indian context, National level Standing
Committee on Women Entrepreneur constituted by the Ministry of Industries The Govt.
of India(1984) notes women entrepreneur as "An enterprise owned and controlled by
women having a minimum financial interest of 51% of the capital and giving at least 51%
of employment generated in the enterprise to women.
Problems of women entrepreneurs
Women owned business are highly increasing in the economics of almost all
countries. The hidden entrepreneurial potential of women has gradually been changing
with the growing sensitivity to the role and economic status in the society. Skill,
knowledge & adoptability in the business are the main reason for women to emerge in to


business venture. Women entrepreneurs" is a person who accepts challenging role to
meet her personal needs and become economically independent, strong desire to do
something positive is an inbuilt quality of entrepreneurial women who is capable of
contributing values in both family and social life.

Microfinance in India empowering women
Rasheeda Bhagat has discussed in his articles about microfinance in India
empowering women that could be through microfinance in India Allowing his
organization to be very profitable are women like Asiya Begum and her colleagues. Or
Ananthamma, a 40-year-old Telugu-speaking maidservant in South Delhi, who was
unable to take care of her handicapped son after her husband died. Her father-in-law had
a spice business, which was doing well; she took an SKS loan and set up a similar spice
business. It flourished, and when it was time for a mid-term loan she bought trinkets and
put her son on the job of selling them door-to-door.
Now she has two businesses, her son is self-employed, and she has proved that
small sums of money can make a big difference to the poor when routed through
organized channels. Traditional development theories believed that a high growth rate of
the economy would benefit the poor through the so-called trickledown effect. This
suggests that, among the poor, both men and women would equally reap the fruits of high
economic growth rate. However, this has been belied by actual development and in spite
of the various development measures and constitutional legal guarantees women have
lagged behind in almost all sectors.
Micro Finance is emerging as a powerful instrument for poverty alleviation in the
new economy. Micro Finance refers to a collection of banking practices built around
providing small loans (typically without collateral) and accepting tiny deposits. In India,
micro finance scene is dominated by Self Help Groups (SHGs) Bank Linkage
Programme, aimed at providing a cost-effective mechanism for providing financial
services to the unreached poor. Based on the philosophy of peer pressure and group
savings as collateral substitute, the SHG programme has been successful in not only in


meeting the peculiar needs of the rural poor, but also in strengthening collective self-help
capacities of the poor at the local level, leading to their empowerment.
Micro finance for the poor and women has received extensive recognition as a
strategy for poverty reduction and for womens economic empowerment. There are good
reasons to target women. Gender equality turns out to be good for everybody.
Women's Micro-enterprises
Considering the entrepreneurial environment, women's activities are very
interesting as they offer a great source of knowledge and innovation. For example: there
is no single type of female micro-entrepreneur, they differ in social background,
educational level, experience and age. Another interesting factor is their strong social
coherence that allows them to maintain strong communications-channels at all levels.
One important element, and perhaps the only characteristic that men will never have, is
the possibility to transfer "motherhood skills" to job. These include fostering of other
people's development through guiding, monitoring, and sharing information. Women are
experienced in balancing claims, in organizing and pacing, and in handling difficulties.

Overview of Microfinance for Women in India
N. Kavitha had overview on the microfinance in India in her articles that
she mentioned that microfinance approach for women`s in India To most,
microfinance means providing very poor families with very small loans to help them
engage in productive activities or grow their very small businesses. Like us, many poor
people need and use financial services all the time. They save and borrow, invest in home
repairs and improvements and meet occasional and domestic expenses such as food and
school fees. However, there are some 500 million low income entrepreneurs in the world
and about 5% have access to financial services. Indeed, the financial services available to
the poor often have serious limitations in terms of cost, risk and convenience. As a result,
over time, microfinance has come to include a broader range of services (credit, savings,
insurance, etc.) as the industry has come to realize that the poor and the very poor that


lack access to traditional formal financial institutions require a variety of financial
products.
Microfinance approach
Microfinance approach is based on certain proven truths which are not always
recognized. These are:
That the poor are bankable; successful initiatives in micro finance demonstrate that there
need not be a tradeoff between reaching the poor and profitability - micro finance
constitutes a statement that the borrowers are not 'weaker sections' in need of charity, but
can be treated as responsible people on business terms for mutual profit That almost all
poor households need to save, have the inherent capacity to save small amounts regularly
and are willing to save provided they are motivated and facilitated to do so That easy
access to credit is more important than cheap subsidized credit which involves lengthy
bureaucratic procedures - (some institutions in India are already lending to groups or
SHGs at higher rates - this may prevent the groups from enjoying a sufficient margin and
rapidly accumulating their own funds, but members continue to borrow at these high
rates, even those who can borrow individually from banks)
Women can make micro-credit succeed in India:
'India has to understand that micro-finance is workable and sustainable
anywhere where there is poverty. And to make it successful, it needs to emphasize and
mobilize the role of women in each rural and poor household,' the chief architect of
Bangladesh's Grameen Bank told a conference organized by the Federation of Indian
Chambers of Commerce and Industry (FICCI). 'India and Bangladesh have no major
difference in poverty. If micro-finance or micro-credit is successful in Bangladesh, it can
be successful in India as well, 'The Grameen Bank and the work that we do is not
something extraordinary and neither is it a model. It is a rather simple way of solving the
complex problems of poverty,' the 66-year-old economist said.



The Impact of Microfinance in women empowerment
Dweep Chanana discussed in his one of the articles as about The Impact of
Microfinance in women empowerment in his below articles In order to help get some
kind of bearing on the impact of microfinance, we present here a short literature review
on how microfinance affects the lives of the poor. The selected papers are organized into
three categories: the broader context, the impact of microcredit, and the impact of micro
savings (surprisingly, there seems to have been more work done on savings than credit).
In order to help get some kind of bearing on the impact of microfinance, we present here
a short literature review on how microfinance affects the lives of the poor. The selected
papers are organized into three categories: the broader context, the impact of microcredit,
and the impact of micro savings (surprisingly, there seems to have been more work done
on savings than credit).
Self-help & enterprise
Women have gone into the making and marketing of a range of cottage products
pickles, dried fish, organic manure, spices, agarbattis, tailoring, embroidery, etc.
Backed by ITCs marketing support, cottage products like agarbattis and chicken
embroidery are emerging as profitable rural industries. Many of the micro enterprise
opportunities are simple and can be started with little capital, such as broom making,
basket making. Other enterprises need more capital and micro financing. The women
meet together weekly to learn ways to get their new business started and successful.
Concept of Women Empowerment
Empowering may be understood as enabling people, especially women to
acquire and possess power resources, in order to make decision on their own or resist
decisions that are made by others that affect them. A person may said to be powerful
when he/she has control over a large portion of power resources in society. The extent of
possession of various resources such as personal wealth, such as land skills, education,


information, knowledge, social status, position held, leadership trains, capabilities of
mobilization.

Role of Microfinance in Women Empowerment
Nava Ashraf had overview on the Role of microfinance in women
empowerment articles that he mentioned that microfinance In the socio-economic
paradigm of economic development of the country, women empowerment is a vital
constituent. Empowerment is a multi-dimensional process that helps people to have
control over their own lives, communities and societies. By generating employment,
Micro finance is emerging as a powerful instrument for poverty alleviation, employment
generation and empowerment of women folk. In India Microfinance for women is mainly
group based assuming that bringing women together in groups will be more
empowering than the individual lending. Many successful women forums and
organizations are trying to bring rural women together for development of women folk
like working womens forum (WWF), self employed womens association (SEWA), shri
mahila griha udyog, Mhaswad, Maharasthra etc.According to World Bank report (2007),
in India the SHG movement has become the basis for programs promoting empowerment
and overall improvement. Although the road to success may be longer with lot many
hurdles, but success of microfinance programs doesnt seem to be far if backed by
education and training.
Also there is much to be done in terms of strengthening womens leadership, their
confidence, their bargaining power within and outside their homes and their
representation in policy-making and decision-making fora. It is their issues, their
priorities and needs which should guide and mould the development process in our
country. Toward this end, SEWA has been supporting its members in capacity-building
and in developing their own economic organizations.
The Self Employed Women's Association. SEWA was born in 1972 as a trade union of
self employed women. It grew out of the Textile Labor Association, TLA, India's oldest


and largest union of textile workers founded in 1920 by women, Anasuya Sarabhai. The
inspiration for the union came from Mahatma Gandhi, who led a successful strike of
textile workers in 1917. He believed in creating positive organized strength by awakening
the consciousness in workers. By developing unity as well as personality, a worker
should be able to hold his or her own against tyranny from employers or the state. To
develop this strength he believed that a union should cover all aspects of worker's lives
both in the factory and at home. Against this background of active involvement in
industrial relations, social work and local, state and national politics, the ideological base
provided by Mahatma Gandhi and the feminist seeds planted by Anasuya Sarabhai led to
the creation by the TLA of their Women's Wing in 1954. Its original purpose was to
assist women belonging to households of mill workers and its work was focused largely
on training and welfare activities. By 1968, classes in sewing, knitting.

Microfinance and Women's Empowerment
Fehmeen Khan`s articles mainly focused on the microfinance and women
empowerment as he mentioned that Empowering women through Microfinance is
an article that appeared in the December 2007 issue of UNDPs Poverty in Focus.
Microfinance gained impetus primarily because it promised the social and economic
uplift of women in developing countries across Asia, Latin America, and Africa.
Countries in these regions have patriarchal societies that harbor gender-based traditions
preventing the liberation of women.
For instance, women in rural areas of South Asia are often prohibited from
showing their faces in public or from leaving their homes altogether. The lucky ones get
to attend a few years of school and as soon as they reach puberty, they are forced to get
married. These practices are embedded in regional culture which makes it all the more
difficult to implement change.
By advancing them credit, microfinance aimed to give women a chance create
their own identity and make their own choices. The funds allowed them to generate stable


streams of income that would help provide food, shelter, clothing, and possibly education
for their families. Over time, these women enjoyed a greater role in the economic
decision-making of their household, which is an achievement in itself, considering the
decades of repressive behavior by The problem pertains to the group-lending
methodology initiated by Grameen Bank. One of the benefits of lending to women
(through the group-lending methodology) related to the strengthening of relationships
with other women in their community. This bond not only serves as a safety net when
certain members of the group are pressed financially, but also offers great social value.
The other side of the story is rather audacious. Some studies reveal that the main
reason women are targeted is because they succumb easily to social pressures exerted
through group-lending, and not because they are good money managers. Moreover, some
fear that the group lending technique reinforces existing social norms because women are
selected after assessing her husband's lifestyle (drinking, gambling, financial status, etc.)
Measuring the Impact of Microfinance on Women's Empowerment
Given the complexity of defining womens empowerment it is not surprising that
only a few empirical studies have tried to examine the impact of microfinance on
womens empowerment. For the most part, empirical research on microfinances effect
on womens empowerment has been conceptually ungrounded and tends to estimate an
over-extended definition of empowerment or a truncated aspect of it. A number of these
studies also suffer from methodological bias and flaws. In fact, only a few studies have
successfully investigated this impact in a rigorous manner.



CHAPTER-4

DATA ANALYSIS AND INTERPRETATION



Data Analysis and Interpretation
This chapter deals with the analysis and interpretation of the data. For the purpose
of the study data were collected by way of administering questionnaires to the women
entrepreneurs and members of SHGs of the study area. Analysis involves organizing the
data in a manner, while interpretation is that which explains the facts of figures.
Hypothesis generally means a proposition or a set of proposition set forth as an
explanation for the occurrence of some specified phenomena either asserted merely as a
provisional conjecture to guide some investigation or accepted as highly probable in the
light of established facts.



Table 1: Table Showing Age of the Respondents
SLno Age
Frequency Percent

1

18-25

5

10

2

25-30

29

58

3

35-40

16

32

4

Above 40

0

0

5

Total

50

100
Source: survey data
Figure: 1

Inference:
The age wise classification of the respondents shows that 58% of the respondents
are of the age group of 25-30 years. Most of these aged womens are more utilizing the
microfinance in SHGs in shivamogga district.

5%
29%
16%
0%
50%
Age
1 18-25
2 25-30
3 35-40
4 Above 40
5 Total


Table-2 Table showing the educational qualification of the respondents
Qualification Number of
respondents
Percentage
Matriculation and
below
23 46
Pre-university 13 26
Any degree 9 18
Others 5 10
Total 50 100
Source: survey data
Figure -2

Inference:

The educational status of respondents indicated that 46% of the respondents were
had matriculation and below education and nearly 26% of them had pre-university
education followed by 18% had degree and only 10% were educated in different streams
in the study area.

46%
26%
18%
10%
Matriculation and below Pre-university Any degree others


Table-3 Table Showing the Marital status of the respondents
Marital status Number of respondents Percentage
Married 48 96
Unmarried 2 4
Total 50 100
Sources: Survey data
Figure: 3

Inference:
96% of the respondents were married and the rest of them 4% were unmarried in
the study area. This shows that most of beneficiaries are married womens the SHGs
concentrating more on married womens.

0
10
20
30
40
50
60
70
80
90
100
Married Unmarried Total
Showing the Marital status
of the respondents Number
of respondents
Showing the Marital status
of the respondents
Percentage


Table-5 Table showing the respondents awareness about microfinance
Response Number of respondents Percentage
Yes 50 100
No 00 --
Total 50 100
Figure -5

Inference:
We can easily came to know that the now a days women population is
know about microfinance, that means it has covered 100% .

100%


Table-6 Table showing the respondents awareness about SHGs and the
Member of these SHGs

SLno.

Name of the SHGs

Yes

No
percentage

1 Dharmasthala Sangha 50 50 100%
2 Swayam krishi Sangha 10 40 20%
3 Shtri Shakthi Sangha 20 30 40%
4 Mahila Swasahaya Sangha 25 25 50%


Figure-6

Inference:
Most of the women`s respondents are aware about all SHGs in above table,
100% know about dharmasthala sangha, 20% Swayam krishi Sangha, 40% Shtri Shakthi
Sangha, 50% Mahila Swasahaya Sangha, most of the women`s are the members of these SHGs
sangha in shivamogga district.
0
5
10
15
20
25
30
35
40
45
50
Dharmasthala
Sangha
Swayam krishi
Sangha
Shtri Shakthi
Sangha
Mahila
Swasahaya
Sangha
1 2 3 4
Yes
No


Table: 7 Table Showing the Purpose of taking loan

Purpose Number of respondents Percentage

Starting tiny business 25 50

Carrying live stock activities 10 20

Purchasing of durables 7 14

Educating childrens 8 16

Total 50 100


Figure:7

Inference:
50% of womens were taken loan to start tiny business, 20% of were carrying live
stock activities, 14% of were used for purchasing durable commodities for homes and
16% of were using for educating their childrens. This shows that major portion is used
for starting business and to engage in economic activity.

0
10
20
30
40
50
60
70
80
90
100
Showing the Purpose of taking
loan Number of respondents
Showing the Purpose of taking
loan Percentage


Table-8 Table Showing the Response towards interest rate
Respondents Number of respondents Percentage
Yes 39 78
No 11 22
Total 50 100
Sources: survey data
Figure-8

Inference:
It reveals that the major portion of the respondents were comfort with interest
rate charged by MFIs that is 78% and 22% of were not adjusted with the interest rates
because it costs nearly more than banks.

0
10
20
30
40
50
60
70
80
Number of respondents Percentage
Yes
No


Table-9 Table Showing the respondents that social activities undertaken by
the SHGs for the women empowerment
SLn
o.
Social activities Dharmasth
ala sangha
Swayam
krishi sanga
Shtri
shakthi sanga
Mahila
swasahaya
Sangha

1 Education -------- ----- ---- 30

2 Training for Tinny business 10 ------ 38 -------

3 Training for Small scale
business
35 20 12 -------

4 Savings and welfare
activities
5 30 ------ 20

5 TOTAL 50 50 50 50

Source: survey data
Figure:9

Inference:
The above table show that social activities has been undertaken by SHGs through
microfinance .the Dharmasthala sangha provide loan for Training for Small scale
business at 70%, Swayam krishi Sangha for Savings and welfare activities at 65%, Shtri
Shakthi Sangha for Training for Tinny business at 76%, Mahila Swasahaya Sangha for
Education at 60% by this way SHGs are provide social activities to empower the women.
0
10
20
30
40
50
Education Training for
Tinny
business
Training for
Small scale
business
Savings and
welfare
activities
total
1 2 3 4 5
Dharmasthala sangha
Swayam krishi sanga
Shtri shakthi sanga
Mahila swasahaya Sangha


Table-10 Table showing the mode of repayment of loan amount
Modes Number of respondents Percentage
Daily 00 00
Weekly 48 96
Monthly 2 4
Quarterly 00 00
Total 50 100
Figure -10

Inference:
96% of respondents responded that the weekly repayment mode is best because
their incomes were comes in week rather than monthly and daily, and only 4% were told
that they pay monthly. That huge percentage responded that it is type of loans is for
economic activities and least one responded that they are educational loans.

0
10
20
30
40
50
60
70
80
90
100
Number of respondents
Percentage


Table-11 Table showing the proper usage of loan amount
Response Number of respondents Percentage
Yes 29 58
No 21 42
Total 50 100
Source: survey data
Figure -11

Inference:
58% of womens were using the loan amount for the suggested need and rest
of them was not using the loan amount that is 42%. This shows that the purpose
of the MFIs is not reached fully.

Yes
No
0
10
20
30
40
50
60
Number of
respondents Percentage
Yes
No


Table-12 Table showing the reason for improper usage
Reasons Number of respondents Percentage
Poverty 17 34
Family problems 11 22
Lack of proper knowledge 14 28
Others 8 16
Total 50 100
Figure -12

Inference:
34% of the respondents responded that they are not using the loan amount for the
genuine reason because of the poverty. 28% of were not using properly because of lack
of knowledge, 22% from family problems and 16% form other problems. This indicates
that clearly SHGs microfinance intention is not satisfied.

0
50
Number of respondents
Percentage


1. Table showing the respondents of the comfortable with the interest rate of the
loans given by the SHGs
Performance No of respondents
Strongly agree 10
Agree 28
Neither Agree nor disagree 10
Disagree 02
Strongly disagree 00
1. Calculation of chi-square test for the comfortable with the interest rate of the
loans given by the SHGs s this below fig is observed frequency from survey data:
O E O-E

(O-E)
2
(O-E)
2
/E
10 10 00 0 0
28 10 18 324 32.4
10 10 00 0 0
02 10 -08 64 6.4
00 10 -10 64 10
TOTAL 48.8
Df = (N-1)
5-1=4
5% Significance level of the table value is 9.488
The calculated chi-square value is more than the table values therefore the null
hypotheses is accepted
Inference: 56% of the respondents are accepted and agreed the interest rate of the SHGs
and the chi-square test is accepted as null hypotheses.


2. Table showing the respondents of performance of SHGs is better than banks other
institution:
Strongly agree 10
Agree 35
Disagree 00
Source: survey data
2. Calculation of chi-square test for the performance of SHGs is better than banks
and other institutions this below fig is observed frequency from survey data:

Df = (N-1)
5-1=4
Inference: By survey of 70% of the respondents agree self help groups are better than
banks and other institutions. By calculation chi-square test null hypotheses is accepted.
O E O-E

(O-E)
2
(O-E)
2
/E
10 10 0 0 0
35 10 25 625 62.5
5 10 -5 25 2.5
0 10 -10 100 10
0 10 -10 100 10
TOTAL 85


3. Table showing the respondents of the microfinance is helping the empowerment
of women:
Strongly agree 00
Agree 50
Disagree 00

3. Calculation of chi-square test for the microfinance is helping the empowerment of
women this below fig is observed frequency from survey data:

Df = (N-1)
5-1=4

Inference: 100% of the respondents agreed and they accepted microfinance in
empowering the women`s through SGHs



CHAPTER-5

FINDINGS SUGGESTIONS
AND CONCLUSIONS



Findings Suggestions and conclusions
Based on the interaction with the women respondents of the SHGs members, by
observations, survey, and data analysis, interpretation the key findings are noted below.
Findings
Most of the women`s of SHGs are beneficiaries through microfinance are middle
age group of 25-30years.
If we see the educational qualification of the respondents majority of were having
matriculation and below. It shows that educated women`s are not concentrating
on SHGs activities of microfinance empowering women`s.
It is find that 94% of the respondents were married, it reveals that SHGs are
looking for married womens empowerment their by it can develop their families.
SHGs provide social activities services through Microfinance like savings and
welfare activities and also training for small scale and tinny business.
The majority of responded of women`s in SHGs are prefers Dharmasthala sangha
and they were using funds for engaging in economic activity.
The interest rates of Dharmasthala sangha and Swayam krishi Sangha is flat
interest rate of loan amount, Shtri Shakthi Sangha and Mahila Swasahaya
Sangha is cut interest rate of loan,
78% of the respondents were agreed with the interest rate of the SHGs, because
most of the money lenders charges high than SHGs.
The SHGs provide weekly mode of repayment of loan, as the poor and peoples
who are engaging in activities are getting their income in weekly.
The women population is choosing SHGs microfinance more than going for
banks,
Due to lack of proper knowledge and family problem the womens were under
utilizing the loan amount.


Suggestions
SHGs microfinance has to concentrate on unmarried womens empowerment also,
as unmarried population is more and they will engage in economic activities and
they are free to do business.
It has to slightly reduce the interest rate on loan amounts.
It has to increase the loan amount some more, as we know now a days all the
rates and prices are costly the members cant go for business activities that small
amount of loan.
SHGs have to provide knowledge based training programmes which would help
the members in their business.
It has to guide the members in proper utilizing the loan amount.
SGHs have to start group of entrepreneurship activities through providing more
microfinance to the small scale business activities.
Conclusion
Traditionally women have been marginalized. A high percentage of women are
among the poorest of the poor. Microfinance activities can give them a means to climb
out of poverty. Microfinance could be a solution to help them to extend their horizon and
offer them social recognition and empowerment.
On the other hand, thank to women's capabilities to combine productive and
reproductive roles in microfinance activities and society has enabled them to produce a
greater impact as they will increase at the same time the quality of life of the women
micro-entrepreneur and also of her family. Short-term assistance programmes might aim
at increasing the productivity of women's labor by providing credit, technology, and skill
training. Long-term objectives could emphasize eliminating institutional constraints
which limit women's access to productive resources, creating social, technological, and
economic mechanisms to reduce conflicts between women's productive and reproductive


roles, as well as defining strategies to address traditional and legal barriers that hamper or
preclude the active participation of women in the productive sectors of the economy.
The key issue for successful micro finance program focused on women should
consider them in a broader context, as a family nucleus, that is vital for societal
improvement and progress. Following this idea, micro finance programmes should
provide women with specific adapted products through appropriate methodologies, which
can offer competitiveness to their business but also well being to them and their familie.



QUESTIONNAIRE
DEAR Sir/Madam,
I am vijay kumar .y MBA 4
th
semester Bonafide student of management studies &
research Kuvempu University Shankaraghatta, as a part of the curriculum requirement for
the award of degree in business administration I am pursuing research on THE ROLE
OF MICRO FINANCE IN WOMEN EMPOWERMENT A CASE STUDY ON SHGS
IN SHIVAMOGGA DISTRICT Under the guidance of Mrs. Sumathi , Faculty member
in Institute of Management Studies, I kindly request you kindly take some time off your
busy schedule and facilitate in filling up this questionnaire, further the information that is
provided by you would be would be kept confidential and used for academic purpose
only.

Vijay Kumar. Y
Institute of Management
Studies
Kuvempu University Shankaraghatta,
Shivamogga.

1. Name :
2. Address :
3. Age :
1.18-25 [ ] 3.35-40 [ ]
2.25-30 [ ] 4.Above 40[ ]



4. Educational qualification:
1. Matriculation and below [ ] 3. Pre-university [ ]
2. Any degree [ ] 4. Other [ ]

5. Marital status:
1. Married [ ] 2. Unmarried [ ]
6. Income level:
1. Rs. 5000-15000 [ ] 3. Rs. 25000-35000 [ ]
2. Rs. 15000-25000 [ ] 4. Rs. 35000 above [ ]
7. Are you aware of microfinance?
1. Yes 2. No
8. Which SHGs do you aware of?

9. Are you a member of SHG?
1. Yes 2. No

SLno. Name of the SHGs Yes No
1 Dharmasthala Sangha
2 Swayam krishi Sangha
3 Shtri Shakthi Sangha
4 Mahila Swasahaya Sangha


10. For which SHGs you are the member?

11. Do you have loan facilities in your SHG?

12. For which purpose you are taking loan from MFIs
1. Starting tiny business [ ] 3. Carrying live stocks activity [ ]
2. Purchasing durables [ ] 4. Educating children [ ]
13. What is the rate of interest of MFIs?
____________________________________________________________

SLno. Name of the SHGs Yes No
SLno. Name of the SHGs provide loans Yes No


14. I am comfortable with the interest rate of the loans given by the SHGs

Strongly agree

Agree

Neither Agree nor Disagree

Disagree

Strongly Disagree

15. What are all the social activities undertaken by the SHGs for women empowerment?

16. How much time they will take to provide loans?

17. How frequently do you repay the loan taken by the SHGS?
SLno. Social activities Dharmasthal
a sangha
Swayam
krishi
sanga
Shtri
shakthi
sanga
Mahila
swasahaya
Sangha
1 Education
2 Training for Tinny business
3 Training for Small scale business
4 Savings and welfare activities
SLno. Name of the SHG`s Within
1day
Within
week
Within
fort night
Within month


SL.no. Name of the SHGs Daily Weekly Fortnight Monthly
4 Mahila Swasahaya
Sangha

18. The performance of Self help groups is better than banks and other institutions.

19. Will you use the loan amount for which purpose you borrowed?
1. Yes 2.No
20. If no what is the Reason behind the improper usage?
1. Poverty 3. Lack of knowledge
2. Family problems 4. Other------------
21. Micro finance is helping a lot in empowering the women
22. Any suggestion to the improvement of microfinance lending activities
_____________________________________________________________________

Strongly agree

Agree


Disagree

Strongly Disagree

Strongly Agree

Agree


Disagree

Strongly Disagree



Thank you



BIBLIOGRAPHY

Books Articles:


o Women Empowerment Programs, S. Shiny Nair (Jun 30, 2009)
o Women Empowerment & Social development Dr.Jelsy Joseph,(Jun 30, 2009)
o Womens Empowerment Raghavendra Bhatt,(Mar 24, 2009)
o Role Of Microfinance For Promoting Integrated Rural Development And Poverty
Alleviation Raja Shekar Bhatt, Posted,(17, 2007)
o Indian Women: Natural Potential to be an Entrepreneur PRIYA DADHICH (Sep 22,
2010)
o Microfinance in India empowering women Rasheeda Bhagat (16 September 2009)
o Overview of Microfinance for Women in India N. Kavitha (Sep 22, 2006)
o The Impact of Microfinance in women empowerment Dweep Chanana(January 18,
2010)
o Role of Microfinance in Women Empowerment Nava Ashraf,(May 30, 2009)
o Microfinance and Women's Empowerment Fehmeen Khan(on 15, Dec, 2007)
Search engine:
www.microfinance.com
www.EzineArticles.com
www.SGHs.com

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