ABSTRACT

Financial inclusion is a policy initiative of Government and state. It is a delivery of banking

services at an affordable cost to the various sections of low income groups and self- help groups.
It is a process to ensure access to appropriate financial products and services needed by the
weaker sections and vulnerable groups especially women in an accountable and transparent
manner. The importance of access to financial services and financial inclusion is recognised by
world leaders in the outcome of document adopted by 2005 world summit. Financial inclusion
concept helps to reach the unreached stakeholders of self- help groups rural population and
women. The socio economic development of women in the micro credit process, self- help
groups is undertaken with the objectives to bridge the gap of givers and receivers. Access to
finance by the poor and vulnerable groups like women is a prerequisite for poverty reduction
and social cohesion. This is an integral part to promote inclusive growth. The objective of
financial inclusion is to extend the scope of activities of the organised financial system to
include within its ambit weaker people of the society. Through graduated credit, the attempt
must be to lift the vulnerable from one level to another so that there exists financial
independence among them.

In this paper, the highlight is on the access to financial service through financial inclusion and
its nature influence and impact on the financial and social empowerment of women as a
whole. Financial inclusion is noted as an important aspect of the nation’s financial sector
particularly to improve the quality of life for a happy and harmonious life free from economic
and social operation, exploitation and violence and economic development of women. The
objective of the paper is to analyse the numerous financial services available like access to
savings bank accounts, credits and insurance to women in their development their development.
The paper will throw light on various programs and initiatives taken by the government as
well as Financial Institutions on financial inclusion and how it empowered women in general.
Microfinance program, policy initiatives by RBI, Raja Rajeshwari Mahila Kalyan Yojana,
United Indians Mother Teresa women and children policy, Swasthya Bima policy, Janashree
Bima Yojana, Yashaswini program, Swalamban program and community based schemes. Thus,
this research paper tries to elaborate the women empowerment through microfinance.

1
Today microfinance is perceived as a powerful tool to remedy the poverty and women
empowerment through access of financial services. This is a key factor as women are the most
deprived section of the society. It is very essential to transform this phenomenon in social and
economic change by access of microcredit and microfinance.

KEY WORDS

Financial inclusion, Microfinance, Women empowerment, Microcredit, Self-Help Groups,

Micro insurance.

INTRODUCTION

India is an economically developing country which has various dimensions to the economic
development. One such dimension is the growth of the financial sector which plays a major
role in developing India and its economy holistically. Inclusive financial growth is the primary
step that leads to the aim. As per Rangarajan committee “Financial inclusion is the process of
ensuring access to financial services and timely and adequate credit was needed by vulnerable
groups such as weaker sections and low income groups at an affordable cost”. It is a system and
a process that ensures access and availability of finance to all the sections of the society.
Financial inclusion helps in making available basic banking account with very low minimum
balance, helps in access to credit cards, access to utilise the services of various NGOs, SHGs etc,
prioritise between credits savings and insurance services. Financial inclusion is highly important
because it helps in a substantial progress in the reforms of the country.

Women are the most deprived section of the society and their empowerment is most necessary
in the world. Though it is a developed world, patriarchal beliefs dominate and block the
opportunities that are available for women. Women empowerment is an important component
of India's socio economic growth. Rural women, especially belonging to the weaker sections of
society have limited access to resources that would make them financially independent. The
motive of women empowerment does not stop with just financial independence but also develop
a woman in all perspectives which will help her flourish as a whole. They need to be empowered
economically which will make them self- reliant, financially independent and give them the
freedom to choose between right and wrong.

2
Microfinance is an activity that includes the provision of financial services with the goal of
creating social value. In recent times microfinance is an emerging trend that also plays a pivotal
role in women empowerment. It is a medium that helps in discarding poverty through financial
independence of the underprivileged as well as contribute to the growth of the economy. The
main principles of microfinance are based on central values of equality, equity and mutual self-
help.

Banks being the primary pillars of Indian economy play a pivotal role in empowering women
through financial independence through bank accounts, financial assistance, priority banking,
educational loans, self- help groups, training, employment etc. Microfinance is one of the most
powerful tools to pull women out of poverty through access to finance. International
development initiatives, micro loans and other financial schemes provide a marginalized
opportunity to grow in the social status along with gaining financial independence. Financial
access to all sections of the society particularly women will help the nation to attract various
global players which will help it expand drastically. Financial inclusion for women will act as a
source of empowerment which will enable them to contribute further to the economic and
social development.

OBJECTIVES

 To comprehend the impacts of financial inclusion on the economy

 To analyse the tribulations in the process of women empowerment
 To evaluate the positive effect on women empowerment through micro- finance

REVIEW OF LITERATURE

MR.RAMU MAURYA – 2011 “WOMEN, MICROFINANCE AND FINANCIAL INCLUSION

IN INDIA”
This paper talks about the importance of microfinance where in it ensures the upliftment of
women both economically and socially, enhancement of the welfare level improvement of the
status of women in the family and community and empower them to gain access to resources, to

3
foster confidence among women and financial independence of women. The first step for women
on the path out of poverty cycle is social and economic security. Microcredit is one of the most
important factors that can instrumental eyes to affect a change in the economic well- being of
women and develop their livelihoods. There were various initiatives and Measurement taken by
the Reserve Bank of India for financial inclusion in India. National bank for Agriculture and
Rural Development (NABARD) also played an instrumental role in financial inclusion and
microcredit. The self- help groups (SHG) launched by NABARD was introduced in Phase 2.
During phase 3, the financial institutions collaborated with informal delivery channels to provide
microfinance. Though there were full of challenges, financial inclusion has a positive impact not
only on women but also the weaker group of the society. There was a vast economic growth,
financial deepening, and a roadmap for the future.

MR K GOVINDAN KUTTY – 2012 “FINANCIAL INCLUSION AND WOMEN

EMPOWERMENT”
According to statistics, Kerala is in the forefront for achieving hundred percent financial literacy
and financial inclusion with the help of the Government and also a lot of Non- governmental
organisations (NGOs) with the intention to provide with that of financial services to vulnerable
groups like women and the poor through informal banking methods. This research mainly
focuses on the Kudumbasree program, a voluntary organisation of women and their role in
women empowerment. This study is also undertaken to identify measures undertaken in India for
achieving financial inclusion among the woman, the impact of SHG bank linkage scheme in
India as a tool of financial inclusion. The study is a descriptive type using secondary data and
includes the state of Kerala for the study. This paper was noted the voice of Rangarajan
committee on financial inclusion. Moving onto the Kudumbasree program, it is a massive
program of women launched in Kerala in 1998 with the support of Government and NABARD
with the main aim is to achieve Welfare of each and every family to the collective effort of
women. This is an informal way of Banking or a microfinance institution that has been able to
facilitate the poor the safe and provide cost effective and easy credit. The bank linkage is a
programme organised in a very similar manner to assist the received funds. The conclusion of the
paper gives access to financial services service to increase production and social protection

4
through stored savings credit and insurance. The role played by voluntary organisations like
Kudumbasree through its normal and cost at the effective methods is noteworthy.

BINCY GEORGE & K.T.THOMACHAN - 2018 “FINANCIAL INCLUSION AND WOMEN

EMPOWERMENT: A GENDER PERSPECTIVE”
This paper examines women empowerment associated with financial inclusion. In India where
women constitute approximately 46% of total population majority of them but the right
opportunities and the rights are denied because of the financial dependence. The main objectives
of the study of assess the nature and extent of financial inclusion in India to analyse the role of
financial inclusion and financial literacy as a tool for women empowerment and to understand
the various financial services that can be availed by women true Financial Institutions and their
impact on their economic and financial independence. This paper has done both primary and
secondary method. It has analysed the various socio economic characteristics of human and
financial independence of women and their level of empowerment this study mainly caters and
women and their accessibility of financial services which leads to their empowerment. The paper
also focuses on women who are doing upset and entrepreneurial activities by taking up loans and
how these women are able to access the financial services like bank accounts savings credit
insurance etc. The paper concludes by proving the fact that financial inclusion does lead to
women empowerment.

ILAVARASAN A- 2015 “SOCIAL ECONOMIC DEVELOPMENT OF WOMEN IN THE

MICRO CREDIT PROCESS FOR SELF HELP GROUPS”
The study is undertaken at Cuddalore district with the object analyzing the social economic
activities by the selected self-help groups. The data collected and analysis is to bring about the
desired policy implications. The research paper was done on the basis of both primary data and
secondary data where the research gap was derived by selecting 300 respondents as a sample of
study in the Cuddalore District and interpretation was made on basis of that. This paper has a
framework to analyse the marketing activities of self help groups and to examine the various
social economic activities undertaken by self-help groups to empower women. The paper mainly
concentrates on self-help groups and their importance and contribution towards financial

5
empowerment of women. Self-help groups are a part of microfinance that leads to financial
empowerment for women. The credit requirements for rural women can be fulfilled totally by the
SHGs. In recent times micro credit for SHGs has emerged as a tool of promoting income
generation Enterprises for the unreached particularly women. As per 2011 census micro
Enterprises sub sector accounts for 52% of employment all main workers. As a concluding
statement the research says that the markets are varied and dynamic resistance of economic
conditions and there are a lot of challenges to implement the financial inclusion. A thorough
understanding of the market environment will help improve the market situations tremendously.

PRAGABHAL DAS K V- 2017 “WOMEN'S EMPOWERMENT THROUGH FINANCIAL

INCLUSION: THE WORK OF KUDUMBASREE”
This paper is an attempt to understand the Kudumbasree program and it’s it contributed to the
women's welfare in general. Part 1 will briefly explain the empowerment on general and part 2
will briefly explain the financial inclusion in general with an overview of the Kudumbasree
program. This paper would be based on how women can be empowered and be made financially
independent by giving them access to the financial services that they have been denied for so
long. It is very important to understand the meaning of exclusion which is the process of
excluding which is the denial the access to various opportunities that are entitled to them. This
paper mainly caters to the financial exclusion that is the gender based discrimination that is
found among women and the solution and initiatives that can be taken for financial inclusion for
women. It tries to highlight the though India is economically a developed country there are lots
of socio economic concepts that are not adopted and followed in the country. The impact of
financial inclusion can be understood in various ways which includes credit savings, insurance
.The highlight is made on the Kudumbasree program which is a community based project to
develop the poor woman. The research has identified the main aim of the Kudumbasree program
which is to eradicate absolute poverty in 10 years holistically. The concluding observations of
the researcher was that the state poverty eradication mission aims at eradicating absolute poverty
within a definite time frame especially through empowerment of women.

RESEARCH METHODOLOGY

6
The study collected sources from secondary data. It has referred to books, articles, published
sources. It adopts conceptual method.

FINDINGS

 There also a lot of communities that are being formed to support the women and the
vulnerable groups considering the importance of them for the economic development.
RBI constitutes expert committee to review the current institutional framework in
place to support the self- help groups and suggest long term solutions for the economic
and financial sustainability of the sector.
 According to various research materials, it has been found that microfinance in the
recent past has emerged as a potential instrument for poverty alleviation and women
empowerment. Study by self- help groups in Andhra Pradesh reported an overall
reduction in poverty including reductions among the extreme poor.
 The main initiative to empower women through micro finance and financial inclusion
was the introduction of self- help groups as it is considered as a strategy for both
women's empowerment as well as poverty reduction. Self- help groups play a pivotal
role in the economic development and have shown that they have provided improved
access to credit and crisis related needs. Also the SHG bank- linkage programme by
NABARD has also grown rapidly accounting for the major chunk of credit linkages.

7
  The table clearly shows that the SHG movement has spread to all regions of India,
though their intensity is not same as in Southern Region.
 Table on Access to loan and women empowerment
Borrowing amount Borrowing for Borrowing for Non- Total
Entrepreneurial Entrepreneurial
activities activities
Between 25000- 12 17 29
50000
Above 50000 36 9 45
Total 48 26 74

Source: Sample Survey(Paper by Bincy George)

According to the table, there is an association between access to loan and financial
independence leading to economic development of women(x2= 11.416; P=0.000681)(according
to sample tests).

 Scholarly articles says that banking and financial Institutions take lot of initiatives to
empower women in multiple ways by helping them access and create bank accounts,
provide educational loans to ensure that they are educated, provide financial assistance
to encourage their entrepreneurial skills, special training programs who have started
self- help groups are there on businesses and provide a lot of employment opportunities
both quantitative and qualitative in rural and urban areas.
 The Pradhan Mantri Jan Dhan Yojana(PMJDY)- the biggest financial inclusive
initiative also played an important role in women empowerment. At present more than
17.5 crore bank accounts have been opened under the initiative and people have
deposited more than 22000 crore in them. Plus zero balance accounts under PMYDY
has declined from 76 % to 45.7 4% since since inception. According to the World Bank
women account ownership has inflated by 30% between 2015 and 2017. 29% of
women in India use digital payments.

8
  Findings and researches state that priority banking or Mahila banks has taken an
innovative approach to encourage women to take benefits of banking. Community based
Mahila Banks were set up in various parts of India where the local women run the bank
offering benefits to local community woman. According to the Ministry of Finance they
will 498 exclusive bank branches for women in 2017.
 Rashtriya Mahila Kosh is an initiative by the Ministry of Woman and Child
Development to ensure woman empowerment and a holistic basis. They offer various
schemes and ensure that every scheme is accessible to woman in all parts of the country.
 Swashakti swayangsiddha Swalamban program, Rajarajeshwari program, community
based schemes, Yashaswini program, Janashree Bima Yojana, United Indians Mother
Teresa women and children policy etc are certain policies that initiated by the central
government and the RBI which proves that almost 73 lakhs of women have been
empowered within a period of one year since its inception.

SUGGESTIONS

Though the situation of women in the country has been substantially increasing, there can be
various implementations that can make women even more financially independent and
economically strong.

 A lot of women are yet to be financially empowered in the rural areas due to lack of
access to the financial institutions. Banks especially Regional Rural Banks have to be
initiated in the rural and semi- urban areas for the women there to access the micro-
finance schemes.
 Micro- credit has grown vastly but Micro- Insurance schemes are yet to impact and
influence the economy. Micro- insurance schemes are highly important as it not only
provides finance for one woman but also their family after her death. This can eradicate
poverty and empower substantial living of the entire family.
 In spite of various schemes being introduced by the Government or RBI, most women are
not aware of the schemes and rights pertaining to them. The Financial Institutions must
take efforts and initiative to ensure that all women are aware of the schemes and the

9
 benefits of it. They must also persuade the women to participate in the schemes for actual
financial empowerment.
 Bank facilitators who act as a via- media for the financial institutions and the
customers(women) must be employed to facilitate the process required for the women to
adopt the policy initiatives which would in turn help them empower.
 Women must be made to understand the impact of micro- finance in women
empowerment. The importance of micro-finance in the economy must be communicated
in the right manner.
 Self- Help Groups is one of the best initiatives taken as per Rangarajan Committee.
SHG bank linkage program has helped in financial deepening. This initiative must be
accessible to all women to ensure that women are freed from bondages of finance.
 There should be a proper collaboration of the financial institutions with non- financial
institutions and NGOs to promote the initiatives of micro finance.
 Still, there exists a gap between the finance providers and finance receivers. All
stakeholders of the financial inclusion ecosystem, including financial institutions,
regulatory agencies, technology service-providers and civil society organisations, will
need to play their parts effectively.
 The actual empowerment of women would be when women themselves take up an
initiative to eradicate the threats and hurdles in the process of women empowerment.

CONCLUSION

This paper mainly catered to the impact of micro finance in the lives of women and their
development as a whole. Inclusive finance and Inclusive growth break the way through
poverty and help the nation expand on a large scale. Access to these financial inclusion helps in
social protection and economic development. Micro finance schemes are growing on a daily
basis to impact and alter the lives of various sections of the society. The Government has taken
enumerous policy initiatives to ensure women empowerment along with financial independence.
The main aim of the Government is to reach out the family through women and reach out the
community through family.

10
Unless each and every section of society enjoy the fruits of economic expansion, the
development is not a holistic one. While the Government is making efforts to support to cause of
women empowerment, women in particular will also have to participate in these initiatives. Be
it financial inclusion, training or employment, women will have to make clear choices and help
the banks in fighting the “Gender Disparity” prevailing in the country. Development of a
woman financially, economically and socially would lead the country as a better place to live
in and soon globalize.

BIBLIOGRAPHY

www.centerforfinancialinclusion.org

http://shodhganga.inflibnet.ac.in/bitstream/10603/92228/10/10_chapter%202.pdf

https://www.onlinejournal.in/IJIRV3I2/172.pdf

http://oaji.net/articles/2017/1330-1529050497.pdf

11
https://bfsi.eletsonline.com/empowering-women-through-banking-innovations-and-excellence/

https://economictimes.indiatimes.com/blogs/et-commentary/financial-inclusion-and-women-
empowerment/

http://rmk.nic.in/loan-schemes

https://www.rbi.org.in/scripts/NewLinkDetails.aspx

https://www.rbi.org.in/Scripts/Statistics.aspx

https://financialservices.gov.in/financial-inclusion

Articles from Book on Financial Inclusion for Inclusive Growth- C PARAMASIVAN

12