REASERCH REPORT ON MICRO CREDIT AND WOMEN EMPOWERMENT

PTVA’S INSTITUTE OF MANAGEMENTName – Mahetab Sohrab khan

Roll No. –MFM11/ SEM VBatch – 2014 -2015

Introduction

• Microfinance is defined as any activity that includes the provision of financial services such as credit, savings, and insurance to low income individuals which fall just above the nationally defined poverty line, and poor individuals which fall below that poverty line, with the goal of creating social value.

• Microfinance as any activity that targets poor and low-income individuals for the provision of financial services.

• Microfinance was focused on providing a very standardized credit product.

• Micro Finance is not merely extending credit, but extending credit to those who require most for their and family’s survival.

• Concept of micro finance is emerged in need of meeting special goal to empower under-privileged class of society, women, and poor, downtrodden by natural reasons or men made; caste, creed, religion or otherwise.

• It is a tool for empowerment of the poorest.

• It is essentially for promoting self-employment, generally used for:

– Direct income generation

– Rearrangement of assets and liabilities for the household to participate in future opportunities.

• It is not just a financing system, but a tool for social change, specially for women.

Industry Profile

• Entities in Micro Finance:-

• Indian Microfinance dominated by two operational approaches.

• SHGs comprise twenty or fewer members, of whom the majority are women from the poorest castes and tribes.

• Banks typically lend up to four rupees for every rupee in the group fund. Groups pay a reasonable 12-24% annual rate of interest.

• MFI is an organization that offers financial services to low income populations.

• Term refers to a wide range of organizations - NGOs, credit unions, cooperatives, private commercial banks and non-bank financial institutions.

• Micro Finance Models

• 1.Micro Finance Institutions (MFIs):

Types of MFIs

a. Not for Profit MFIs

NGO - MFIs , Non-profit Companies.

b. Mutual Benefit MFIsMutually Aided Cooperative Societies (MACS) and similarly set up institutions.

c. For Profit MFIs

Non-Banking Financial Companies (NBFCs) .

• 2. Bank Partnership Model

• 3. Banking Correspondents

• 4. Service Company Model

• 5. Commercial banks as Microfinance Vehicles

Objectives of the study

• To study the impact of micro finance in empowering the social economic status of women and developing of social entrepreneurship.

• To know about relationship between SHG’s members, micro finance banks and entrepreneur’s women.

• To clarify the limitation of microfinance programmes as the tool for women’s empowerment and the type of support service necessary to maximize the contribution of microfinance service.

• To study potential hurdles in the development of women entrepreneurship.

Research Methodology

• Research methodology is a framework for the study and is used as a guide in collecting and analyzing the data.

• TYPE OF RESEARCH USED:-

• Descriptive Research

• In this type of research the researcher has no control over the variables; he can only report what has happened or what is happening.

• METHOD OF DATA COLLECTION

• Primary Data

• The primary data are those, which are collected afresh and for the first time, and thus happened to be original in character. We can obtain primary data either through observation or through direct communication with respondent in one form or another or through personal interview

• Secondary Data• The secondary data on the other hand, are those which have already been collected by someone else and which

have already been passed through the statistical processes. When the researcher utilizes secondary data then he has to look into various sources from where he can obtain them. For e.g. books, magazine, newspaper, internet, publications and reports.

• In this study data have been taken from various secondary sources like:

• Internet

• Books

• Magazines

• Newspapers

• Journals

ANALYSIS AND INTERPRETATION OF DATA

• To study the impact of micro finance in empowering the social economic status of women and developing of social entrepreneurship.

AmountInCrore/No. in Lakhs

Particular Year Total SHGs All Women SHGs % of Woman Groups

No. Amount No. Amount No. Amount

SHG

Savingswith

banks as on

31st March

2009-10 69.53 6198.71 53.1 4498.66 76.4 72.6

2010-11 74.62 7016.3 60.98 5298.65 81.7 75.5

Loan

disbursed to

SHGs during

the year

2009-10 15.87 14453.3 12.94 12429.37 81.6 86

2010-11 11.96 14547.73 10.17 12622.33 85 86.8

Loan

outstanding

against SHGs

as on 31st

March

2009-10 48.51 28038.28 38.98 23030.36 80.3 82.1

2010-11 47.87 31221.17 39.84 26123.75 83.2 83.7

Particular 2009-10 2010-11

Total SHGs 15.87 11.96

All Women SHGs 12.94 10.17

0

2

4

6

8

10

12

14

16

18

Total SHGs All Women SHGs

2009-10

2010-11

Total No. of Loan disbursed:-

Amount in lacs

Total Amount of loan disbursed:-

Amount In CroreParticular 2009-10 2010-11

Total SHGs 6198.71 7016.30

All Women

SHGs4498.66 5298.65

0

1000

2000

3000

4000

5000

6000

7000

8000

Total SHGs All Women SHGs

2009-10

2010-11

CHALLENGES FACED BY THE WOMEN ENTREPRENEURS

• Challenges are faced by the women entrepreneurs due to many reasons. Some of the challenges faced by the women entrepreneurs include-

• Intense competition from similar products, limited knowledge, production and quality standards as well as low confidence and morale.

• Many women started their own business due to the adverse circumstances, such as loss of spouses, divorce or financial hardship.

• Lack of follow up and holding support (i.e. Capital, market linkages, technical information and marketing techniques) after receiving Entrepreneurship development training.

• A risk averse mindset.

• Inadequate capital.

• Networking problem (i.e. with raw supplier to buyer of products)

• Insufficient management and marketing skills.

• Low level of motivation and courage

OVERCOMING THE CHALLENGES

• The challenges faced by the women entrepreneurs can be overcome with the help of the following measures-

• Creating the Importance of Entrepreneurship program and skills training, and MF and support under single roof.

• Training programme operating in several states helped NGOS-MFIs provide their microfinance clients different set of skills for successfully running enterprises.

• Provide micro credit for livelihood support and to micro enterprises development.

• Encouraging women entrepreneur to utilize the loans for productive purposes and have the potential to become entrepreneur.

• Establishing a network of SHG to serve as a “self-help community” for micro enterprises development activities.

• Social recognition of women leading an enterprise.

• Developing female mentors, trainers and advisors.

• Establishing sources of credit.

Conclusion

• 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.

• A conclusion that emerges from this account is that micro finance can contribute to solving the problems of inadequate housing and urban services as an integral part of poverty alleviation programmes.

• It is clear that gender strategies in micro finance need to look beyond just increasing women’s access to savings and credit and organizing self-help groups to look strategically at how programmes can actively promote gender equality and women’s empowerment.

• India is the country where a collaborative model between banks, NGOs, MFIs and Women’s organizations is furthest advanced.

• It therefore serves as a good starting point to look at what we know so far about ‘Best Practice’ in relation to micro-finance for women’s empowerment and how different institutions can work together.

RECOMMENDATIONS

• Credit is important for development but cannot by itself enable very poor women to overcome their poverty.

• Making credit available to women does not automatically mean they have control over its use and over any income they might generate from micro enterprises.

• In situations of chronic poverty it is more important to provide saving services than to offer credit.

• A useful indicator of the tangible impact of micro credit schemes is the number of additional proposals and demands presented by local villagers to public authorities.

• Globalization will not be allowed to expand the gap between the rich and the poor. Affluent countries cannot continue to dump aid on needy nations; developing countries must not be permitted to ignore the needs of their impoverished population.

• As the poor are vulnerable it is not sufficient for us just to provide micro credit, but to have a series of support systems provided at the appropriate time.

• Government can contribute most effectively by setting sound macroeconomic policy that provides stability and low inflation.

Thank you