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RESEARCH FORUM
Conducting research projects, presenting research papers in Seminars &
Conferences and publishing articles in Journals are essential requirements for
the faculty members and research scholars of academic Institutions as per UGC
guide-lines for promotion and increments (API Index). In order to strengthen
the research capabilities of faculty members and research scholars it is
imperative to have a suitable forum where they can meet, present and discuss
their work and exchange ideas to improve the research work.
With this objective in mind a Research Forum is being instituted in this
institute where the faculty members and research scholars will meet once a
month to discuss their work and seek suggestions
Specifically the activities of the forum would be:
1.
2.
3.
4.
5.

To present and discuss research papers / article.

To comment and evaluate papers / articles received by BJMR Journal.
To comment on research project proposals of faculty members.
To invite experts to present and have discussion on any research topic.
Any other issues related to academic research.

The first meeting of this forum will be held on Saturday 6th December 2014
at 2 p.m. in the Conference room on second floor of the Institute.
All Faculty members and PhD Scholars are required to be present in the
meeting.

(J.C. Sharma)

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The research paper to be discussed on Saturday 6th December 2014 at 2 p.m. is given below.
The discussion will be on following points (and any other point suggested by forum
members).
1. Title Size, appropriateness
2. Abstract - Appropriate and completeness
3. Keywords number and relevance
4. Introduction to theme / subject / issue and its length
5. Review of work done - Relevance and length
6. Theoretical frame - Any theory / model
7. Research Questions
8. Objectives
9. Hypotheses
10. Concepts used
11. Research design its appropriateness
12. Sources of information / data reliability, time period
13. Methods of data collection
14. Unit of analysis
15. Sample size and sampling procedure
16. Techniques of data analysis methods, software
17. Results / Findings / Interpretation
18. Expression - Language
19. Conclusions
20. Tables relevance, size, presentation
21. Graphs / Charts relevance, type of graphs/charts
22. References writing style, time period, Indian / Foreign

Research paper for discussion in Research Forum on Saturday 6th December 2014

Impact of Microfinance
on Socio-Economic Empowerment of Women

Abstract:
Micro finance programmes have been used as not only a tool for economic upliftment
but also an effective way to meet womens practical and strategic needs. Self help groups can
contribute towards improving the quality of lending a prompt and simple manner, ensuring
need based loans and keeping the loan size within the repaying capacity of the borrowers.
Empowering women to set goals organize themselves and make decisions about their lives
and communities are a key part of poverty alleviation and socio-economic development.
The present study used education, business activities, working capital, loan availment,
loan repayment period, and loan utilization, income, housing arrangements, asset possession,
entrepreneurial skills and social empowerment skills as the indicators to understand the
impact of microfinance on socio-economic empowerment of women.
Key Words: Micro Finance, SHGs and Empowerment.
-----------------------------------------------------------------------------------------------------------Introduction:
The status of women is very low in the family as well as in the society. Lack of adequate
levels of education and technical skills makes them generally dependent either on agriculture
or forests. With changing roles, women are now struggling for alternative livelihood. The
need to empower women and understand their perspectives in economic and social
development has been realized. With the empowerment, women has develop skills to make
decisions, organize, manage and carryout activities and deal with people and institutions in
the world around them. The diversities in womens conditions whether they are cultural,
social, religious or simply their educational background, play a very important role in the
programme of empowerment. Thus women play a participatory model of development. The
creation of productive employment opportunities in rural areas as need to improve living
conditions of rural poor in general, rural women in particular. In this regard, the Government

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of India is undertaking various income and employment generation programmes, with a
particular emphasis on rural women. Micro finance programmes have been used as not only a
tool for economic upliftment but also an effective way to meet womens practical and
strategic needs. As a result, women SHGs have taken the shape of movement. Indeed, it is a
conscious path chosen by women to shape their own destiny. The purpose behind networking
of women SHGs is to enable them to involve themselves in various development activities
meant for their betterment and inculcate the habit of thrift among them. Self help groups can
contribute towards improving the quality of lending a prompt and simple manner, ensuring
need based loans and keeping the loan size within the repaying capacity of the borrowers.
Empowerment as a concept is very difficult to define, yet it is seen as a power that comes
from within a person in the form of self-confidence, faith, and courage; it can also be derived
from working with others to achieve more collectively than could be done separately.
Empowering women to set goals, organize themselves and make decisions about their lives
and communities are a key part of poverty alleviation and socio-economic development.
Micro-credit is often given credit for empowering women. The assumption is that
participation in peer borrower groups and access to credit enables women to build a financial
base of their own, enhance their skills, access peer support and gain social recognition.
Objective of the study:
The main objective of the study is to examine the impact of microfinance on socio economic
empowerment of women.
Methodology:
The study is a sample study. The sample for the study is select SHGs and the members of
SHGs. For the purpose of sample, Self Help Groups based in Telangana region were
selected. There are ten districts in Telangana region. At stage I, Warangal district is selected.
At stage II, 4 mandals are selected from Warangal District. At stage III, 4 villages are selected
from each mandal, thus 16 villages are selected from 4 mandals. At stage IV, 3 SHGs are
selected from each village, thus 48 self help groups are selected. At stage V, 4 members are
selected from each SHG. Thus, 48 SHGs and 192 members are selected for participating in
the study.

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The study is based on both primary and secondary data. The main sources of primary data
are respondents in the sample. The sources of secondary data are unorganized annual reports
of selected self help groups, records and documents of selected self help groups in Warangal
District. Primary data is collected through a structured questionnaire by holding interviews
with various respondents in local dialectic. Secondary data is collected by personal visits to
the select village gram panchayats, mandal offices, district office and libraries.
Results and Discussion:
Education:
Education attainment is an important determinant factor of empowerment and socioeconomic development in the lives of women. It enables them to think for themselves making
confident and develop the capacity of recognizing more accurately the area of exploration. It
opens up to an area in which women can compete with men and prove their independent
identity. Thus, education is a crucial factor for developing women and also empowers them.
The data relating to level of formal education of the respondents is shown in Table-1.

Table-1 Level of Formal Education of the Respondents

Education status

No. of respondents

Percentage

Illiterates

122

64

Primary

13

Secondary

38

20

Intermediate and above

17

Total

192

100

Source: Field Data

Table-1 depicts the level of formal education of respondents and it reveals that a significant
portion of 64 per cent is illiterates followed by members with primary education (7 per cent),
secondary education 20 per cent and Inter & above are 9 per cent. On the whole majority of
the respondents are illiterates with regard to educational background of members.

In rural

areas, men as well as women have been suffering from lack of education. This also indicates
that the women with good educational background are not attracted towards SHGs. This

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accounts for the greater level of poverty and the low level of development in their lives.
Government should provide free education to the women members and also sufficient
training to the members to know about SHGs.
Business Activities:
In fact, entrepreneurship has been seen as confined to manufacturing activity only, but it can
be observed in the agriculture and service sectors also. Most of the industrial entrepreneurs
started with commercial entrepreneurship. In a backward region the number of entrepreneurs
in general and women entrepreneurs in particular are a rare phenomenon. The main business
activities of the respondents are presented in Table-2.
Table-2 Business Activities of the Respondents
Business Activity
Agriculture
Trading
Industry
Service
Total

No. of respondents

Percentage

67
9
19
67
192

35
20
10
35
100

Source: Field Data

Table-2 indicates that the majority of the respondents are in the agriculture and service sector
with 35 per cent in both sectors respectively. This is followed by trading which had 20 per
cent of the respondents and 10 per cent of the respondents are into the industry sector.
Women must have self help thought to become a self employee. It can be suggested that
Government should design various self employment schemes to the women so that they can
develop their skills to have a professional life.
Initial Working Capital:
Small businesses and enterprises in India suffer from a great deal of indebtedness and are
subject to exploitation in the credit market through high interest rates and lack of convenient
access to credit. They need credit to fund their working capital needs on a day-to-day basis as
well as long term needs like emergencies or other income related activities. To meet these
credit needs they need access to financial institutions that can provide them with credit at
lower rates and at reasonable terms than the traditional money lender.

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Respondents are also asked to state the size of their initial working capital and Table-3 gives
the summary data.
Table-3
Size of Initial Working Capital
Size of Initial Working Capital (Rs)

No. of respondents

Percentage

25
96
48
67
192

13
50
25
35
100

1000-5000
6000-10000
11000-15000
16000 and above
Total
Source: Field Data

From the Table-3, 13 per cent of the respondents started their businesses with start-up
capital ranging from Rs.1000-5000, a majority of 50 per cent had a start-up capital ranging
between Rs.6000-10000, 25 per cent of them started with amount ranging between
Rs.11000-15000 only 12 per cent of the respondents have started their businesses with an
amount Rs.16000 and above. This indicates that majority of the respondents manage small
and micro enterprises which needs small start-up capital.
Loan Availment:
SHGs provide loans to their members for using them as investment and to have access to
income generating opportunities. The extent of loan provided to newly formed groups is as
low as compared to old groups. The data relating to extent of loan availed is shown in Table4.
Table-4
Loan Availment of the Groups
Loan in (Rs.)

No. of groups

percent

10000 20000

20000 30000

23

49

30000 40000

40000 50000

11

21

50000 & above

11

21

48

100

Total:

Source: Field Data

The data from the Table-4 reveals that 49 per cent of the groups availed loan amount between
Rs.20000 30000, 21 per cent of groups availed loans between Rs.40000 50000 and
Rs.50000 & above, 4 per cent of the groups availed loan between Rs.10000 20000, 5 per
cent of the groups received loans between Rs.30000 40000. The loan is sanctioned to the
groups depending on the nature of group, repayment of loan amount in time etc. Banks can
grant loan amount to those groups who pays the amount in time and also periodically. In
every group, leader distributes the loan amount equally, who is in need. This implies that
microfinance is helping to fill the vacuum that has been created by the formal and informal
financial services to poor entrepreneurs especially women in India.
Repayment Period:
Each group has to submit proposal availing of loan to DRDA development office. DRDA
accept the proposal and guides SHGs to approach bank for sanctioning amount. After loan is
released, the bank specifies repayment schedule. The loan is to be repaid according to the
schedule. Normally a maximum period of 2 years is allowed. The data relating to repayment
period is shown in Table-5.
The data from the Table-5 indicates that 74 per cent of groups repayed the amount to bank in
time i.e., in between 1-2 Years. Only 2 per cent of groups repaid the amount in between 2-3
Years. Majority of the groups are paying the loan amount in time, so that they can avail
another loan easily and immediately. Interestingly 19 per cent of the groups have taken more
than 3 Years to repay the amount of loan, 5 per cent of groups repaid loan in only less than a
year. In general repayment is not seen as a serious problem.
Table-5
Repayment Period
Repayment Period

No. of Groups

Percentage

< 1 Year

1-2 Years

35

74

2-3 Years

3 Years & above

10

19

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Total:

48

100

Source: Field Data

During personal discussions a few members reported that they have repaid the loan out of
their savings. Repayment of the loan amount in time encourages the bank to sanction another
loan when there is a need. Releasing of loan amount in time by the bank and repayment of
loan amount in time by the group generates good commitment, co-ordination, communication
and co-operation between bank, Government and groups.
Loan Utilization:
Purpose for which loan is availed is an important indicator of progressing nature. Members of
the group take loans for different purposes.

Banks also sanction loans after careful

examination of the purpose of loan. The members have to utilize the amount for the purpose
they proposed. The data relating to purpose of the loan is shown in Table-6.
The data shown in Table-6 reveals that majority of the respondents (63 per cent) are availing
loan amounts for household expenses purpose. 11 per cent of the respondents availed loan
for possessing animal husbandry. Each 5 per cent of the respondents availed loan amount for
medical expenses and educational purposes respectively, 16 per cent of the respondents
availed loan amount for agriculture purpose.
Table-6
Loan Utilization
Purpose of loan

No. of respondents

Percentage

Agriculture

30

16

Animal husbandry

21

11

Household expenses

121

63

Medical expenses

Education

192

100

Total
Source: Field Data

Utilizing loans for house hold purpose should be discouraged because it does not generate
any income to the respondents. So, banks should grant loan to those respondents who utilize
it for productive purpose not for unproductive purpose. Respondents availing the loan
amount should utilize it for purchasing of assets and there must be some purpose to gain

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some profit or benefit on these assets. Thus respondents need education about distinguishing
productive and unproductive purpose. Respondents need to understand that debt carries
interest and therefore should be invested in activities that generate surplus. So they can pay
the interest and at the same time enjoy the surplus.
Income:
There is a close relationship between level of income and activities conducted by members of
SHGs. Infact, it is the risk-taking person who earns a profit and improves financial position.
Thus, one reinforces the other and ultimately it is the financial position and flow of income,
which motivates one to become member of SHGs.

The data relating to income wise

distribution of members is shown in Table-7.

The data shown in Table-7 reveals that 10 per cent of the respondents does not earn income,
the respondents who earn below Rs.6000 are 39 per cent, income of 14 per cent respondents
is between Rs.6000 10000, income of Rs.10000 15000 accrue to 20 per cent respondents
and 17 per cent respondents earn income Rs.15000 & above Government should financially
help the women members who are below poverty line and show the way to earn income. But
it is observed that the respondents are earning some income and contributing to the family for
the development.
Table-7
Annual Income Level of the Respondents
Annual Income

No. of respondents

Percentage

No income

19

10

Below 6000

74

39

6000 10000

26

14

10000 15000

38

20

15000 & above

35

17

Total

192

100

Source: Field Data

Housing Arrangements:
Food, clothing and shelter are essential for every human being. Women play an important
role in the process of life. In order to lead life in a house, they used to have a self help

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thought to save money and it motivates them to join in SHGs. The data relating to housing
arrangements of respondents is shown in Table-8.
Table-8
Housing Arrangements of the Respondents
Housing Arrangements

No. of respondents

Percentage

Kutcha

25

13

Pucca

120

63

RCC

47

24

Total

192

100

Source: Field Data

The data shown in Table-8 reveals that 13 per cent of the respondents live in Kutcha house,
majority of the respondents live in Pucca house i.e., 63 per cent, 24 per cent of the
respondents live in RCC house. During the discussions with SHG members it is observed
that the majority of the women are living in Pucca house after joining in the group.

Asset Possession:
To understand the economic background of the SHG members, the asset structure of sample
households is studied in terms of the size of land holding, animal husbandry, consumer
durables and others in Pre and Post-SHG periods. The data relating to asset possession of the
respondents is shown in Table-9.
The data in Table-9 indicates that the majority of the respondents i.e. 43 per cent possessed
consumer durables in Pre-SHG period; this has decreased to 24 per cent after they joined in
the group and 21 per cent of the respondents possessed animal husbandry before joining the
group and after joining the group, 31 per cent of the respondents possessed animal husbandry.
This is supported with the personal discussions that the members have shown interest in
acquiring animals to increase their income generating capacity. 22 per cent of members hold
land in Pre-SHG period. This has increased to 28 per cent after joining the group.

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Table-9
Asset Possession of the Respondents
Asset

Pre-SHG

Post-SHG

Land

30 (17)

54 (28)

Animal Husbandry

40 (21)

60 (31)

Consumer Durables

83 (43)

46 (24)

Others

36 (19)

32 (17)

Total

192 (100)

192 (100)

Source: Field Data

The analysis shows that through the membership in SHGs economic conditions of members
have improved significantly to the extent of acquisition of land. Other than these assets, 19
per cent of the respondents possessed other assets in Pre-SHG period but it decreased to 17
per cent in Post-SHG period. Majority of women showed interest in purchasing land and
animal husbandry. So, it can be concluded that women acquired certain assets that improved
their economic conditions after joined in the group. Providing of loans to members helped
them to gradual increase in purchasing capacity and also they are satisfying their basic needs.

Entrepreneurial Skills:
Entrepreneurship was once the domain of male population while it offers the doors open to
women also over the past few years and at present many women folk entered the field of
entrepreneurship and proved success in their venture. Like men entrepreneurs, women
entrepreneurs also have an equal role in the nations development. By starting enterprises,
exploring new markets, innovating new products and techniques and giving employment to
people, women entrepreneurs will be able to add to the growth and prosperity of the nation.
Voluntary organizations, NABARD and NGOs as the promotional agencies play a vital role
in providing training programmes to develop entrepreneurial skills of SHG women. The
Entrepreneurial skills of the sample respondents are presented here in Table-10.
Table-10
Entrepreneurial Skills of the Respondents

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Indicator

Pre-SHG

Post-SHG

Diversification of Business

19 (10)

173 (90)

Employing more hands

85 (44)

107 (56)

Positive outlook about business ventures

19 (10)

173 (90)

Source: Field Data

The analysis of the Table-10 reveals that 90 per cent of the respondents admit that their
businesses have improved through expansion of their projects and there has been
considerable diversification in their businesses as well, moreover, most of them no longer buy
on credit. This is an indication that respondents do not spend their loan on only personal
effects but also invest their businesses for growth and expansion. However, to those who use
part of their loans for their personal or family, they believed that, it is an expression of a
positive impact especially on their social status. On employment, 56 per cent of the
respondents have been able to employ more hands after joining into SHG and going through
series of entrepreneurial training, however, only 44 per cent of the respondents are able to
employ more hands into their businesses due to inadequate working capital and other family
related reasons in Pre-SHG period. Finally, the 90 per cent of the respondents professed to
have positive outlook about their business ventures in Post-SHG period. The results indicate
that participation in micro finance programme leads to significant improvement in
performance of businesses of respondents in Post-SHG period.
Social Empowerment Skills:
Empowerment of women is basically influenced by the socio-economic status of women. The
socio-economic status would therefore, be the ranking of an individual by the society she
lives in, in terms of her material belongings and her cultural possessions. Every development
programme initiated in our country, has stressed on the importance of raising the status of
women. In this context, it is necessary to analyze the socio-economic empowerment of
women, so as to understand their levels of empowerment.
The level of social empowerment of the respondents is presented here in the Table-11.
Table-11
Social Empowerment Skills of the Respondents

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Asset

Pre-SHG

Post-SHG

Self Confidence

104 (54)

163 (85)

Socializing

115 (60)

167 (88)

Leadership

58 (30)

161 (84)

Decision making

92 (48)

159 (83)

Source: Field Data

The study in Table-11 reveals that 85 per cent of the respondents have self confidence in
Post-SHG period, where as only 54 per cent with self confidence in Pre-SHG period. 88
per cent of the respondents are now able to socialize publicly; however, it was found out
that only 60 per cent could participate in social activities prior to joining microfinance
programme. With regard to leadership skills, only 30 per cent of the respondents said that
they have leadership skills in Pre-SHG period and it is increased to 84 per cent in PostSHG period. It was also known that 83 per cent of the respondents could make personal
and familys important decisions now due to some training programmes they have enjoyed
in SHG. Before joining SHG only 48 per cent of the respondents could make such
decisions. The respondents confessed that their perception about women in general has
changed from those days when they had to sit back and watch the men make all decisions
and cater for the development of the entire family, community and the nation, to a time
where they can also contribute their meaningful quota to socio-economic development.
Conclusion:
One of the strong reasons for promotion of Self Help Groups is to make women financially
independent. Financial position becomes strong only when women are directed to take up
profit making professions. But the level of financial status is closely related to the activities
conducted by Self Help Groups. The poor financial status, poor educational background and
lack of proper encouragement are the hurdles to become entrepreneurs. There is a need to
create increased awareness among the rural women regarding the formation and benefits of
SHGs. For this, the promotional agencies should come forward to conduct programmes for
imparting training and motivation to women. Government should take steps to provide
appropriate technology, know-how and institutional support for furthering of interest in the
rural women. Promotional agencies like NGOs, banks and other agencies should also
participate in this effort by conducting awareness programmes through lectures on issues

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concerning women. Such programmes not only create social awareness among women but
also help all-round development.
References:
1. Abiram P, Sivasubramanian J, (2011). Empowering Women through Self Help
Groups, International Journal of
Research in Commerce, Economics &
Management, Vol. 1 , No. 6, p.23.
2. Anand .U.K, (2001).Micro Credit: Avenue for Sustainable Empowerment of Rural
Women, Champaign, IL University of Illinois,Urbana, p.15.
3. A. V. Hemalatha, (2012). Skill Development of Women Micro Entrepreneurs- A
Study of Self Help Group Members in Kerala Asia Pacific Journal of Marketing &
Management Review, Vol.1 No. 3, p.114.
4. Kabeer, Naila (2005). Is Microfinance a magic bullet for Womens
Empowerment? Analysis of Findings from South Asia, Economic and Political
Weekly,Vol.40, No.41, pp.45-63.
5. Ledgerwood, J (1999). Sustainable Finance with the Poor, Micro finance
Handbook: An Institutional and Financial Perspective, The World Bank
Washington, D.C, p.3.
6. Marine S Shaul (1982). Beyond Micro credit: Putting Development Back into Micro
finance, in Dr.K .Manohanran Nayar, (2012), Self-Help Groups: A New Paradigm
Shift for Women Empowerment, International Journal of Research in Commerce,
Economics and Management, Vol.2, No.3, p.81.
7. Otero, M (1999). Bringing Development Back, into Micro finance. Journal of
Micro Finance, Vol. 1, No.1, p.23.
8. Sarkar. D. C, (1987). Integrating Women in Rural Development, Kurukshetra, Vol.
XXXDV, No.4, pp.56-76.
9. Singh and Ram Iqbal Sing, (1987). Impact of Rural Development on Economic
Status of Women in U.P, Kurukshetra, Vol XX XV, No.3, pp.34-45.
10. Skarlatos, k. (2004). Microfinance and Womens Economic Empowerment.
Bridging the Gap, Redesigning the Future, Wisconsin Coordinating Council
in Nicaragua, Working Paper Series No 1, 9978-96.

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