A Synopsis

On

“A study on women empowering through microfinance in Gujarat”

Submitted to:

Gujarat Technology University In

Partial Fulfillment of the Requirements for the Ph.D. Programme

Guided By

Dr CHINNAM S REDDY

DIRECTOR NITHM

Hydrababd

Prepared By Hiren Mehta

Reg. No. Ph-3040

Enrolment. No. 129990992013

Introduction

Women empowerment is concept phrase need and phenomena in India. We worship her as goodness as

ancient India her learnt from Gargi and vidusi and we respect them in public ,but increase in crime

against women and increase in domestic violence and unsocial environment compare to previous

generation to compiled all of as prefer dependence male child . the researcher is to find that finance

of women’s on father, brother, friend and son do not grant her decision power and social and domestic

violence tripal talak or muslim and social respect

Development of women has been recognized as a need for national development and social

welfare. In order to bring women into the main-stream of economy and society, the Government

of India has launched several development programmes for women. Various Five Year Plans

have given special emphasis to employment and income generating activities for women with on

ultimate objective of making women economically independent and self reliant. In spite of the

efforts of the government, women’s needs are more and more marginalized in their struggle for

existence and excellence. The credit requirements of the poor, particularly women, are not met

by the formal banking sector. The women, on many occasions, need emergency credit which the

formal credit system and the government poverty alleviation schemes could not cater to. Denied

access to credit, which is one of the most productive of the resources, women are pushed to the

status of recipient, beneficiary and customer, despite their ability as a giver, beneficiary and

producer. In these circumstances, the micro finance concept evolved.

2 Brief descriptions on the state of the art of the research topic

“Micro finance” in the global context is commonly understood to refer to programmes meant for

providing credit for self-employment and other financial and business services to poor persons. It

is as same as extension of small loans to very poor for self-employment projects that generate

income, allowing them to care for themselves and their families. In most cases, micro finance

programmes offer a combination of services and resources to their clients in addition to credit for

self-employment. These often include savings facilities, training, networking and peer support.

Micro finance targets the rural and urban households, with an emphasis on women borrowers,

provisions of finance for creation of assets and their maintenance and bringing in greater quality

of services. The beneficiaries are identified by micro finance providers either independently or

through non-governmental organizations and self-help groups. Self-help group is a voluntary

association of a homogeneous set of people, either working together or living in the

neighborhood, engaged in similar line of activity, working with or without registration, for the

common good of the members.

“Self-help group” mechanism has been widely accepted as an integral part of Microfinance.

Several directives and guidelines from the Reserve Bank of India (RBI) and National Bank for

Agriculture and Rural Development (NABARD) to the commercial banks have clearly

mentioned the need to recognize the self-help group as a potential tool of micro finance. The

Reserve Bank of India has launched the programme of linking self-help groups with lending

institutions like commercial banks so that the credit requirements of the self-help groups can be

properly attended to by the commercial banks. Along with the self-help groups, non-

governmental organizations also play a pivotal role in obtaining the micro-credit by the rural

poor.

Literature Review:

Hashemi et al (1996) in their paper entitled “Rural Credit Programmes and Women

Empowerment in Bangladesh” analyzed about 1300 married women under the age of 50

who got loans through Grameen Bank and the Bangladesh Rural Advancement

Committee (BRAC). Four separate samples were drawn using a random multi-stage

cluster design to include messages from all the four geographic divisions of Bangladesh.

The four groups consisted of Grameen Bank members, Bangladesh Rural Advancement

Committee members, non-members residing in Grameen bank villages and a comparison

group who lived in villages with no Grameen Bank or Bangladesh Rural Advancement

Committee loans but would have qualified to join the credit programmes.

Ariz (1999) in his article titled “Women empowerment: Self Help Groups” discussed the

experience of SHGs in Gossaigaon sub-division under Kokrajhar district, Assam. In

addition to the thrift and credit activities, the SHGs were involved in community

activities. The paper also points out that the SHGs are involved in mid day meal

distribution, overseeing execution and monitoring of rural development work under

District Rural Development Agency in the form of vigilance committee at every gram

Panchayat level. The paper also suggests that future course of action for the SHGs in the

areas like taking up the cause of women’s rights, fight against corruption in the

implementation of different government schemes, involvement in the improvement of

health and hygiene by imparting health education, training in first aid, promoting health

and nutrition etc, and entrepreneurship development.

Smita and Haripriya (2010) analysed Self Help Group bank linkage model and financial

inclusion in India. Their main objectives were to examine the role of SHG bank linkage

model in achieving financial inclusion across sixteen states for the year 2008 and

portrayed the status of financial inclusion. They adopted cross sectional regression

analysis to know the impact of selected independent variables on financial inclusion. The

results indicated that the financial inclusion created a positive impact on SHG bank

linkage model. They concluded that Self Help Group linkage model was a highly

successful operated model of microfinance in India and it would reduce transaction costs

which would facilitate proper monitoring of funds.

Vijay Kumar (2011) analysed the role of SHGs in women empowerment in Warangal district of

Andhra Pradesh. He stated that the members had joined the group in order to earn more

income, promote savings habits and to develop collective, economic and social activities.

The research findings reported that among the 100 respondents 30 respondents had

greater autonomy in house-hold decision making and reduced domestic violence against

the women. He recommended that the government should provide market support to the

products of SHGs and to provide more loans through governmental agencies adopting

easy loan procedure.

Venkatesh and Kala (2011) analysed the empowerment of women through self help bank

linkage programme in India. According to their study, there are more than 2000 NGOs

included in the NABARD SHG-Bank linkage programme. They found that apart from

running families, the rural women bring income with dynamic activities ranging from

traditional work in the fields to working in factories or running small and petty

businesses. They further stated that they can be improved entrepreneurs and progress

managers in any kind of human development activities. They suggested that micro

finance programmes should offer women with specific modified products through

suitable methodologies, which can offer competitiveness to their business but also well

being to them and their families.

( C ) STATEMENT OF THE PROBLEM

It is submitted that “women empower thought microfinance” is less studied in Indian context.

However, a little effort has been made to find out the women empowerment through

microfinance on women empowerment in Gujarat. The concept of microfinance is unique and is

observed alternative way for supporting the poor. Through this method, various services are

provided to needy poor people by providing them financial assistance and particularly enabling

women to become more empowerment. Still, there are many issues which need to be discussed

such as outreach of microfinance institutions to the poor people; its role in reduction of poverty,

income improvement and income inequality and how it is helpful in empowering women.

OBJECTIVES OF THE STUDY

The objective of the study is to analyze the present status of management of micro finance in

Rajkot district and it is relation to impact of micro finance among women SHGs in the study

area. The objectives of the study are listed below, the present study is expected to study the

relationship between microfinance &women empowerment in finance, social &moral aspects

i) To study the socio-economic conditions of the women beneficiaries of micro

finance scheme in the study area.

ii) To analyse the purpose of micro finance of the women beneficiaries.

iii) To assess the amount of loan availed and repayment patterns of micro finance

in Rajkot district.

iv) To assess the extent of effective management of micro finance utilization

v) To analyze the problems in availing the micro finance in Rajkot district.

vi) To evaluate the impact of micro finance on women empowerment with

reference to the women beneficiaries.

vii) To offer suitable suggestions for the betterment of micro finance

Hypothesis

1. There is no significant association between the family type of the respondents and the

impact of micro finance.

2. There is no significant association between the taluka of the respondents and the overall

satisfaction regarding micro finance.

3. There is no significant association between the age of the respondents and the overall

satisfaction regarding micro finance.

4. There is no significant association between the marital status of the respondents and the

overall satisfaction regarding micro finance

5. There is no significant association between the educational qualification of the

respondents and the overall satisfaction regarding micro finance.

SCOPE

The present study is mainly confined to the women SHGs in Rajkot district. It includes an

analysis of the profile of SHG members, their income and savings,borrowing and repayment of

micro finance, problems in getting the micro finance loan and repayment of loan, satisfaction and

impact of micro finance in the study area on the basis of the opinions of SHG members collected.

The effect of microfinance on borrowing power & decision making & its relation to management

of social imbalance is deeply studied

RESEARCH METHODOLOGY

The validity of any research depends on the systematic method of collecting the data and

analyzing the same in a logical and sequential order. In the present study, an extensive use of

both primary and secondary data is made.

1. Research Design

In the present study, both Exploratory Research and Descriptive Research have been used in

accomplishing the objectives of the study. Exploratory Research has been used to gain insight

into various problems faced by the women self help group members while availing the micro

finance loan in the study area. Descriptive Research has been used to analyze the impact of

micro finance loan on empowerment of women self help group members.

2. Sampling Design

In Gujarat, Rajkot district has been selected for the purpose of collecting the primary data. In

order to study Management of Micro Finance by Women Self Help Groups in Rajkot

District, the sample respondents have been selected from various blocks of Rajkot district.

The researcher visited the various blocks on different dates and collected data from different

self help groups.

3. Data Collection

Example and illustration are taken from national &international basis. The secondary data is

taken from Gujarat state & primary data is taken from “Rajkot” district as Rajkot is bearing

average characteristics of the state,. Primary data were collected through a structured interview

schedule from women self help group members in the Rajkot district. Before undertaking the

complete survey, a pre-test was conducted and then the interview schedule was modified and

restructured suitably. The secondary data were collected from magazines, journals, internet

searches, NABARD statistical resources, RBI Bulletin and libraries etc.,

4. Statistical Tools Used

a. To analyse the primary data statistical tools such as Descriptive Analysis, Chi-

square test, ANOVA, Garret ranking technique, Discriminant Function Analysis,

Friedman Test Factor Analysis, Kendall's coefficient of concordance test,

Kruskal-Wallis test, Neural network and Structural Equation Modeling have been

used. Arithmetic mean and percentage analysis are used to describe the data. To

analyse the problem in getting micro finance loan, Garret Ranking technique has

been adopted.

b. A paired sample t test has been used to evaluate whether the respondents income

has increased after joining the SHG when compared to their income before

joining SHG. To analyse the association between Level of Impact of Micro

finance and the personal profile factors namely Taluka, Age, Education, Caste,

Marital Status, Occupation, Size of family, Type of Family and Number of Years

in SHG, Chi-square test has been used. To test the significant difference between

the mean score among the various taluks and impact of micro finance ANOVA

test has been used.

c. Kendall's coefficient of concordance for ranks (W) was used to calculate the

agreement among rankers as they rank a number of subjects according to the

priority for joining a SHG. A Kruskal-Wallis test was used to evaluate differences

among various occupations of the respondents on ranking priorities for joining a

SHG.

d. To identify the factors which influence the respondents to repay the loan, the

Friedman’s test analysis was used. Regarding the impact of micro finance, how do

respondents from one Taluka differ from those from other Taluka in the factors

influencing the impact of micro finance, Discriminant Function Analysis has been

applied.

Achievements with respect to objectives

The analysis has been mainly conducted in nine parts. In the first part, to see the change in

socio-economic indicators of women before and after joining the SHG, a paired-samples t-

test has been employed. In the second part, for analyzing the mean difference between

various category of the respondents on various socio-economic and other variables, an

independent- samples t-test has been employed. In the third part, for analyzing the mean

difference among various category of the respondents on various socio-economic and other

variables, a one-way ANOVA test has been employed. In the fourth part, for analyzing the

overall effect or difference in mean among various category of the respondents for various

socio-economic and other variables, a MANOVA test has been employed. In the fifth part,

for analyzing the overall difference in mean among various categories of the respondents for

satisfaction level of the respondents about services of banks, a MANOVA test has been

employed. In the sixth part, for analyzing the overall rank and difference in the rank given by

the respondents to various factors like reasons of joining the group, reasons of saving and

loan etc, a rank correlation and Friedman rank weight has been employed. In the seventh

part, for analyzing the relationship or dependency of different variables, a chi-square test has

been employed. In the eighth part, to ascertain the key factors from the socio-economic

empowerment statements, an exploratory factor analysis has been employed. In the ninth

part, to see the impact of microfinance services on empowerment of women, a multiple

regression analysis using various socio-economic empowerment variables has been

employed.

Cronbach‟s alpha, is the average of all possible split-half coefficients resulting from different

ways of splitting the scale items. This coefficient varies from 0 to 1, and a value of 0.6 or less

(Malhotra, 2004) generally indicates unsatisfactory internal consistency reliability. An

important property of coefficient alpha is that its value tends to increase with an increase in

the number of scale items.

A question was asked to the respondents to respond to the economic variables like own

income, saving, loan amount, family income and expenditure before and after joining the

SHG. A Cronbach's alpha was run on a five variables of economic indicators and it was

0.741, in this ratio scale question which indicates a high level of internal consistency for the

scale.

A question was asked to the respondents to respond to the statements related to the social

empowerment before and after joining the SHG using a five-point Likert scale ranging from 1

(Strongly Disagree) to 5 (Strongly Agree). A Cronbach's alpha was run on a twenty variables

of social empowerment statements and it was 0.947, in this scale question which indicates a

high level of internal consistency for the scale.

A question was asked to the respondents to respond to the statements related to the economic

empowerment before and after joining the SHG using a five-point Likert scale ranging from 1

(Strongly Disagree) to 5 (Strongly Agree). A Cronbach's alpha was run on a thirteen

variables of economic empowerment statements and it was 0.880, in this scale question

which indicates a high level of internal consistency for the scale.

A question was asked to the respondents to respond to the variables related to the services of

bank after joining the SHG using a five-point Likert scale ranging from 1 (Highly

Dissatisfied) to 5 (Highly Satisfied). A Cronbach's alpha was run on thirteen variables of

services of banks and it was 0.858, in this scale question which indicates a high level of

internal consistency for the scale.

A question was asked to the respondents to respond to the variables related to the group

process and activities using a three-point scale ranging from 1 (Thorough Understanding) to 3

(No Understanding). A Cronbach's alpha was run on a nine variables of group process and

activities and it was 0.921, in this scale question which indicates a high level of internal

consistency

Paired-Samples T- Test

One of the objectives is to see the impact or change in various socio-economic indicators of

the respondents before and after joining the SHG. To check the post change in these

variables, a paired-samples t-test has been run on various variables or statements by testing

the different hypothesis.

A paired-samples t-test was conducted to compare income of respondents before and after joining the

SHG. There was a statistically significant difference in the income before (M=707.54, SD=2209.94)

and income after (M=1396.70, SD=2680.97) conditions; t (509) =-

12.52, p = 0.000. These results do not support the H0 (1.1) and suggest that the respondents income

has increased after joining SHG.

A paired-samples t-test was conducted to compare family income of respondents before and after

joining the SHG. There was a statistically significant difference in the family income before

(M=7950.78, SD=5488.63) and family income after (M=10039.31, SD=6016.35) conditions; t (509)

=-21.32, p = 0.000. These results do not support the H0 (1.2) and suggest that the respondents

family income has increased after joining SHG.

A paired-samples t-test was conducted to compare monthly savings of respondents before and after

joining the SHG. There was a statistically significant difference in the monthly savings before

(M=176.44, SD=734.83) and monthly savings after (M=456.31, SD=999.52) conditions; t (509) =-

12.07, p = 0.000. These results do not support the H0 (1.3) and suggest that the respondents

monthly savings have increased after joining SHG.

Rank correlation for rank given by women of Jamnagar and Rajkot districts for purpose of

saving

The Spearman's Rank Order correlation was run to determine the correlation between

rank given by women of Jamnagar and Rajkot districts for various purpose of saving. As

indicated in table 6.7.3, the results support H0 (6.11), H0 (6.13), H0 (6.14) and H0 (6.15), but do

not support H0 (6.12) revealed that there was a positive correlation between ranks of two

district in the purpose To meet Food & household expenditure in future‟, for others it was

not significant.

purpose of Saving Spearman

Correlation

Sig. (Two

tailed)

N

To meet Social occasion expenditure 0.063 0.320 255 To meet Food & household expenditure in future 0.106 0.091 255 To meet Children education expenditure 0.026 0.676 255 To meet medical expenditure 0.087 0.166 255 To buy assets 0.018 0.780 255

Exploratory Factor Analysis

One of the objectives of the study is to ascertain the factors related to empowerment of

women. The key factors for women empowerment has been identified by an exploratory

factor analysis. An exploratory factor analysis (EFA) is a statistical method used to uncover

the underlying structure of a relatively large set of variables. EFA is a technique within factor

analysis whose overarching goal is to identify the underlying relationships between measured

variables.

Factor analysis for Social Empowerment Factors

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

pprox. Chi-Square

Bartlett's Test of Sphericity df

Sig.

0.940

4747.067

190

0.000

Source: SPSS output

A Principal component factor (PAF) with a Varimax (orthogonal) rotation of the 20 Likert

scale variables for the social empowerment was conducted on data gathered from 510 women

respondents. The Kaiser-Meyer Olkin measure of sampling adequacy for the various factors

of social empowerment measurement is 0.940, which indicates the scale is appropriate and

helps in extracting the factor. The ideal measure for this test (KMO > 0.50) (Malhotra, 2004)

and here the KMO measure is 0.940 indicates the variables are measuring a common factor.

Bartlett's test is another indication of the strength of the relationship among variables.

Bartlett's test of sphericity is significant that is, its associated probability is less than 0.05. In

fact, it is actually 0.00 indicates the inter-correlation matrix is factorable and inter-correlation

matrix come from a sample population in which the variables are non-collinear.

Limitation of study

The pervious study as studies one district, some parameters may be left untainted.

The pervious study toward upon financial aspects & its relation to women empowerment. The

researcher in this study has left other social aspects like size of family, no of kids, responsibility

of parents, business / service of spouse etc. For other researchers. Therefore the present research

before generalization may be tested on other aspects

Conclusions

The study also conclude that availment of Microfinance loan from microfinance institutions is

helpful in empowering women economically, socio-culturally and politically. The study also

found that the beneficiaries have reasonable employment, increase in income and participation in

household financial decision-making as compared to non-beneficiaries. It is also observed that

the beneficiaries are better in terms of mobility as compared to non-beneficiaries. Beneficiaries

are able to raise their voice against social exploitations. The multiple regression analysis shows

that the variables like education of the beneficiaries, freedom of movement; respondent income

and participation in household decision making are significant which influence the

empowerment of programme participants.

The multiple regression analysis shows that the variables like education of the beneficiaries,

freedom of movement; respondent income and participation in household decision making are

significant which influence the empowerment of programme participants. In this way, availment

of loan from microfinance institution

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