ABSTRACT

Microfinance refers to a provision of financial serviced generally given to poor people

or unemployed or women to raise their income levels or improve their standard of
living ad it also plays an important role in creating job opportunities and removing
the poverty. It refers to the practice of providing financial services such as micro-
credit , micro savings or micro insurance for allevation of poverty level and to give
loan to star their own business and enjoy better housing ,health care and education.
Women empowerment means a strong power given to women to do something in
her life. Microfinance is important to overcome exploitation, economic self- reliance
and create confidence particularly among poor and rural women. There are five
important types of empowerment required for women a social empowerment ,
education empowerment, economic and financial empowerment, psychological
empowerment and political empowerment. There isn’t any scale to measure the
empowerment of women but on the basis of experience ,knowledge and behavior
we can analyse it but measurement of empowerment is paramount due to its policy
significance.
“Microfinance stands as one of the most promising and cost effective tool to fight
against global poverty”. In Bihar, self help group was started in the year 1988 by Holy
cross sister at Tilhara village of Ichhak block(west Champaran).after sometime in the
same year SHG was formed by PRADAN in Hazaribagh unit. Earlydays of SHG Model it
was not successful but with an effort of bsnling and other governmental sector after
providing funds to SHGs, the model became more profitable in the developing states
particularly Bihar. Later in 1993 RBI had a meeting in Patna secretariat on micro
credit and subsidy related to it, and due to its successful result ,banks started giving
loans to SHGs without any guarantee for the first time in Bihar. Bank Of Maharashtra
and Canara Bank were the first two banks to provide loans to SHGs. after 1993 there
was pressure on some other nationalized banks so they allowed for opening the
ACCOUNT and lending loans to the group of Bihar.
On the basis of primary and secondary data analysis, this paper attempts to highlight
rolt of microfinance and SHGs in enpowerment of bihar women. There are also some
programmes and schemes introduced by government to help rural poor women and
marginalized section of society to come out from poverty.
INTRODUCTION
NIDAN was the first microfinance institution which was introduced in Bihar, which
followed the SHG and cooperative models of microfinance in Bihar. NIDAN was
started as an informal group for providing funds to women and also the young men
by giving proper training and development facilities for the purpose of making them
financially independent. NIDAN was registered under societies Act 1995 and its
started its operation in five districts of Bihar which are Patna, Vaishali, Katihar,
Muzaffarpur and Samastipur. NIDAN started giving loans mostly to the women
population by 1996.
SHGs model have four position pillars of “self help is the best help”, “Unity is
strength”, United we stands and divided we fall” and the last one as conclusion “we
can make our own bank” .MFIs is regarded as the bank for poor. Under microfinance
poor people get loan without collateral or a steady income provided to them for
business purpose.

women Empowement means she should be confident, courageous and self –

assertive to make decision everywhere. Empowerment of women was one of the
primary objectives of the Ninth five year plan (1997-2002) and efforts wee to create
free environment for women to exercise their equal right and can be equal partner as
men(NABARD,2000). Governments , donors and NGOs and most of the microfinance
focus on women as they they have less credit risk. Microfinance play an important
role in many gender and enlargements strategies to get the result of poverty
allevation and empowerment of women. Empowrement can be obtain by enhancing
their awareness, knowledge, skills and technology utilize competence. Impact of
microfinance on women empowerment varies from place to place due to
Demographic and socioeconomic difference. world bank defines empowremt as ”the
process of increasing the capacity of Individuals or groups to make choices and to
transform theminto desired actions and outcomes”. most of the programmes focus
on women because they are more credit constrained,have limited access to the wage
labour market ,have negligible power in household decision maiking and have higher
records of loan repayment loansrates than that of men. The polation of female in
bihar is far more than that of men but the unemploymwnt rate of women is
higher.MFIs plays various important roles to accelerate socio-economi development
of any country.some of them are –
 by offering microloans to fill the gap within the financial services Industry to
those eho are unable to access convention loan services.
 Help in reducing the poverty,unemployment reate and gender inequality.
Gender Development index(GDI),Gender empoerement Measure(GEM),Qualitative
surveys,Ethnographic Investigations,Focus group discussion and case studies these
are the some key methods that researcher should use to measure empowerment.
NEED OF MICROFINANCE
Womwn are becoming selg reliant,they think for well being of their families,pley an
extra enthuastic and energetic role in decision making and enough talented to tackle
organized gender inequalities.micrifinance and self help group must be use to see
that SHGs don’t charge high interest rate from their beneficiary and revover entrance
to those who cant sign by their utilize through thumb impression.The motto of
financial inclusion stands for achieving the socio economic justice in real sense.obly
banking and other financial Institution are not aren’t sufficient for serving the
financial needs of peoples demand.Need of supplementary financial mechanism
become obvious as
 The credit flow of banks and related institutions follow cumbersome
mechanism which becomes more difficult for illetrate farmers.
 As we know that the fact Mahajans and money lenders in rural areas have
crippled the rural economy as innocent borrowers never end of this mesh.
 Coperative ideas of government couldn’t achieve the target it envisioned.
 SHGs have become the successful formulae in different states as it inhibits a
sense of responsibility,brotherhood along with the chievement of socio-
economic goals.
MICROFINANCE INSTITUTIONS IN BIHAR
The MFIs access finsncial resources from Banks and other mainstream financial
financial institutions and provide financial and support services to the poor.India’s
booming micro lending Industry is a part of global phenomena which attacts
private capital seeking groeth as well. The situation will be worst when someone
id dependent on loan facility and tha loan taker use it without the payback period
and the other terms and conditions.MFIs join hands eith NGOs which helps SHGs
links to banks for providing funds.
There are 34 reporting microfinance Institutions working in Bihar in 38 districts
and 4 MFIs have headquarters in Bihar as well.Some of them are mention below.
Sl No. Name Of MFIs Head office Year of Legal form
Establishment
 1 Centre for promoting Patna,Bihar 2003 Society
Sustainable livelihood
2 Centre for development Patna ,Bihar 2007 Society
orientation and
training(CDOT)
3 Mass care international Patna, Bihar 2005 society

4 Saija finance pvt. limited Patna ,Bihar 2008 NBFC-MFI

5 Prayas Juvenile Aid New Delhi 2007 Society

Centre
6 Satin Creditcare New Delhi 1990 NBFC-MFI
Network limited
7 S V Creditline PVT. Gurgaon,Harya 2010 NBFC-MFI
Limited na
8 Nav Bharat jagriti Hazaribagh,Jha 1993 Society
Kendra rkhand
9 Vedika Credit Capital Ranchi,Jharkha 2007 NBFC-MFI
Limited nd

Source-www.sa-dhan.net

Schemes for Women and Child Development:

The Ministry of Women and Child Development is the apex body for formulation and
administration of the rules and regulations and laws relating to women and child
development in India. The Ministry has six autonomous organizations which are
working under its guidance.
National Institute of Public Co-operation and Child Development (NIPCCD)
National Commission for Women (NCW)
National Commission for Protection and Child Rights (NCPCR)
Central Adoption Resource Agency (CARA)
Central Social Welfare Board (CSWB)
Rashtriya Mahila Kosh (RMK)
These are the organizations which works for the women and child development and
it is controlled by the Ministry of Women and Child Development.
Different schemes are being implemented for an inclusivd development of women
under under the following strategy:-
  Development an strengethening of policy level and legal structure.
 Education and organization of the community and society.
 Enhancing girls access to formal schools and quality og those schools.
 Provision of opportunities of rconomic support,encouragement and
employment of girls and women.
 Ensuring self reliance through awareness,training, skills and organization.
 50% reservation og womrn in Panchayati Raj institutions for providing equal
rights,equal social status and equal opportunities to women.
 50% reservation has been provided to women in primary school teaching to
ensure equal employment opportunities to them.

Schemes for Women Empowerment:

Women are the most important part of every society serving different roles such as
mother, wife, sister friend, daughter etc. In the past few years, the government has
launched many schemes for the development of women. Followings are the schemes
for the empowerment of women:
Beti Bachao Beti Padhao Scheme (BBBP): This scheme was launched on 22nd
January, 2015. This scheme was firstly commenced to address the issue of
declining child sex ratio. This scheme is jointly executed by Ministry of Women
and Child Development, Ministry of Health and Family Welfare and Ministry of
Human Resource Development through a national campaign. This scheme is
focused in 100 selected districts which have low Child Sex Ratio and it covers all
the States and Union Territories.
 Mukhyamantri Balika Poshak yojana: It has been started with a
view to attract girls and their parents towards school.a fixed amount is
provided to the girls studying regularly in classes 1-8 to purchase school
uniforms.Bihar shatabdi Mukhyamantri Balika Poshak Yojana
provides the fixed amount for girls studying in class 9-12 in government
school or colleges from the year 2011-12 onwards.
 MUkhyamantri Balika Cycle yojana:- it has been started in the
year in year 2007 to facilitate the regular study of such girls. Under
this scheme one time financial aid is given to the girls studying in
standard 9. The Scheme has benefitted a total of 40 lac school girls so
far.
 Mukhayamantri Balika Protsahan yojana aims at providing an
incentive amount of Rs10000 to the girls securing first division in
matriculation examination.Ratio of boys and girls appeared in the
examination of standaed 10 was 67:33 in the year 2005 which now
 rose to 56:44 as a result of the state government’s effort for ensuring
better educational status of girls .
 Implementarion of
One Stop Centre Scheme (OSCs): The main objective of launching this scheme is to provide
support and assistance to women who are affected by violence in public and private spaces. Through this
scheme, the women who are facing physical, sexual, emotional, psychological and economic, irrespective
of age, caste, religion, culture, class will be supported. One Stop Centre Scheme provides specialized
services to women who face any kind of violence due to sexual harassment, sexual assault, domestic
violence, trafficking and acid attacks.
Support to Training and Employment Programme (STEP): This programme was launched in 1987 by
the central government. This scheme is totally central funded scheme. This programme provides skill and
new knowledge to poor and women to get employment. The main aim of this programme to make a
significant impact on women by upgrading skills. The target group includes the marginalized section of
society i.e. urban poor people and rural women .
Swa-Shakti: This programme was launched in October, 1999 and finished on 30th June, 2005. This
project was jointly funded by World Bank, IFAD and Government of India. This was totally central
funded project. The main aim of this programme was to take out socio-economic development and
women empowerment through SHGs, income generating activities and micro credit. This project was
implemented in 335 blocks of 57 districts in 9 states.
Swayamsiddha: This scheme was launched in February, 2001 and ended in March, 2007. This was
totally central funded scheme. This scheme was executed in 650 blocks of the country and 67971 SHGs
were formed to give benefit of 989485 women beneficiaries. This was an integrated scheme for women
empowerment through formation of SHGs.
National Mission for Empowerment of Women (NMEW): This scheme was launched on August
15, 2011 by government of India. It is an initiative taken by government of India for empowering women
holistically. The main objective of this program is to strengthen the conceptual and programmatic basis of
women-centric schemes implemented. Training & Capacity Building to enhance and strengthen
understanding of gender issues, build a Resource Pool at the National and State level of bridge gaps
between knowledge and practice will be the other focus area of National Mission for Empowerment of
Women .

OBJECTIVE OF THE STUDY

Many studies have been conducted on the topic of microfinance but
very few had given their result in the North Bihar. So, this shows the
uniqueness of the study.
Some important objectives of the study:
1. To identify the role of microfinance on the rural women
empowerment of North Bihar.
2. To know the different policies, programmes and schemes for the
empowerment of rural women.
LITERATURE REVIEW
 Susy Cheston (2002) has examined that Microfinance has the potential to have
a powerful impact on women’s empowerment. Although microfinance is not
always empowering for all women, most women do experience some degree
of empowerment as a result. Empowerment is a complex process of change
that is experienced by all individuals somewhat differently. Women need,
want, and profit from credit and other financial services. Strengthening
women’s financial base and economic contribution to their families and
communities plays a role in empowering them.
 Cheston and Kuhn (2004)has examined that in their study concluded that
micro-finance programmes have been very successful in reaching women. This
gives micro-finance institutions an extraordinary opportunity to act
intentionally to empower poor women and to minimize the potentially
negative impacts some women experiences.
 Linda Mayoux (Feb 2006) has examined that Micro-finance programmes not only
give women and men access to savings and credit, but reach millions of people
worldwide bringing them together regularly in organized groups. Through their
contribution to women’s ability to earn an income, micro-finance programmes
can potentially initiate a series of ‘virtuous spirals’ of economic empowerment,
increased well-being for women and their families and wider social and political
empowerment Banks generally use individual rather than group-based lending
and may not have scope for introducing non- financial services. This means that
they cannot be expected to have the type of the focused empowerment
strategies which NGOs have.
 Vijender, A. et al. (2012) stresses on improving farm level efficiency through
micro financing and micro insurance in achieving their economic and social goals,
which at present find have largely identified only limited success. The finding
shows micro finance institutions (MFIs) have to become steady profitable to trim
down poverty and role of state government in crucial in augmenting farm
investment, micro financing, micro insurance, facilitating private investment and
spreading institutions to help the poor in realizing inclusive growth of the India.
 Priyanka, Richa Verma and Meenu (2014) study mainly focuses on the
microfinance industry and analysis of how it is contributing towards the
economic growth. There are two main approaches of microfinance (a) SHG (b)
MFI’s. In year 2012-13 MFI’s contributed 30% towards economy, so government
 of India passes the development and regulation bill 2012 on 11 Feb 2014, to
promote, develop and regulate the microfinance in industries in India .
 Vipin Kumar, Monu Chauhan, Ritesh Kumar (2015) India’s 70% population lives
in villages and 60% of the income is generated from agriculture sector. So that
microfinance plays a major role in giving loan and financial help to the poor
people. This study aims at identifying the current status and role of microfinance
in country’s growth. Thus microfinance plays an important role in improving the
standard of living of poor people and helps them to earn. It is an effective tool for
reducing the poverty and socio- economic condition of the country. So
government of India should focuses on microfinance for the sustainability and
inclusive growth.
RESEARCH DESIGN AND METHODOLOGY
“All progress is born of inquiry. Doubt is often better than
overconfidence, for it leads to inquiry and inquiry leads to
invention”.
Generally by research methodology we solve theproblem.so it is the backbone of the
research. So for rvery comprehensive research a proper methodology should be
conceived.

.INtroduction
this thesis talks about the research methodology which is pursuded
through researcher of this research study.it encloses the sections
explaining approach to the objectives,hypothesis,research design
,research methodology,data collection ,scope and limitations of the
study.we see there is a greater impact of microfinance in the rural area
than in urban area.
Research methodology establishes the procedure used to collect the
information and data for analysis and evaluation.it eliminates the
uncertainty in the reseach design to be followed.it is really a journey of
discovery. It is an organized method consisting of expressing the
trouble, formulating thr hypothesis,collecting the facts and data and
analysis of the facts. Thus, reseach is the unique way of obtaining the
knowledge for making its development. According to Clifford Woody
research comprises defining and redefining problems, formulating
hypothesis or suggested solutions; collecting, organizing and evaluating
data; making deductions and reaching conclusions; at lasts carefully
testing the conclusions to determine whether they fit the formulating
hypothesis. Research Design forms the heart and soul of a ‘Thesis’.
RESEARCH DESIGN
The research design is a basic research. It is the conceptual structure
within which research is conducted; it constitutes the blueprint for the
collection, measurement and analysis of data. The design includes an
outline of what the researcher will do from writing the hypothesis and
its operational implications to the final analysis of data. This study
examined banking sector employees in different bank branches in order
to collect information required to meet the objectives of the study.
Researcher had used descriptive research design in this present study.
RESEARCH PROBLEM
The problem identified is “am empirical study on present working scenario of MFIs
and SHGs in rural areas”.

Micro finance is necessary to overcome exploitation, generate self-

assurance for economic self-dependence of the poor, mainly amongst
women. Women have been always discriminated and differentiated in
the society not only in Bihar bur all over the world. Providing loan to
women is also viewed as giving more status in a socioeconomic way
and strengthening the relationship between gender and class. All over
the world more than 70 percent of world’s poor are women. Women
have a higher unemployment rate than men in practically every country
and constitute the majority of the informal sector of most economies.
Giving women access to microcredit loans therefore generates a
multiplier effect that increases the impact of a microfinance
institution’s activities, benefiting multiple generations. I have
attempted to explore the various determinant of women
empowerment to analyse the role of microfinance in improving
decision making power at domestic level, analysing the role of
microfinance in empowering women economically, socio-culturally,
creating awareness and self-confidence.
Empowerment is one of the key elements of poverty reduction and the
world bank has also identified it as most important element as a
primary development assistance goal. The promotion of women’s
empowerment as a development goal is based on a dual argument:
that social justice is an important aspect of human welfare and is
intrinsically worth pursuing; and that women’s empowerment is a
means to other ends. Empowerment of women and gender equality are
prerequisite for achieving political, social, economic, cultural and
environmental security among people.
(Beijing, 1995). As it has been cited earlier, access to credit is an
important mechanism for reducing women’s poverty and to empower
them. Both the Convention on the Elimination of Discrimination against
Women (CEDAW) and the Beijing Platform for Action (BPFA, 1995)
address women’s access to financial resources.
In Bihar, Women are basically the poorest of the poor. women
constitute almost half of the world population but their representation
is comparatively low. In recent years women have done a tremendous
job in different walks of life and are competing successfully with men
despite the socio-economic barriers. This study therefore intends to
explore the contribution of microfinance to the socio-economic
empowerment of women and the measures that can be taken to make
credit easily accessible to them. With the access to education and
knowledge, awareness about their right women spreading their wings
to higher levels. In past days women were restricted to the boundary
only. Even they don’t have given role in decision making. The situation
was even more worsening in rural and remote areas. Now the situation
has been changed. Women are doing business activities and actively
participating in decision making process in her family as well as society.
They have given freedom to do what they wish. This is because of social
works, NGO and other financial institution came forward to provide
microfinance to poor women. The main aim of microfinance is to
empower women and making them economically self-independent. In
some part of remote areas in Bihar still women do not have active
participation in decision making. The researcher has taken the case
study of two blocks of East Champaran district e.g.- Kesaria and Mehsi.
RESEARCH METHODOLOGY:
Source of Data:
The study is carried out in rural areas of North Bihar. There are 19
districts in North Bihar out of which only East Champaran district is
selected for research work, which included primary data collected from
the selected two blocks, i.e., Kesaria and Mehsi. The respondent of the
research were mainly rural women. There are two types of data as
primary and secondary data have been used in this study. Primary data
is collected from a questionnaires from respondent in the particular
study which is fresh and for first time so it is original in character .The
secondary data is collected by different reports like NGO,Bharat
microfinance,economiv survey,world bank and also from many other
sources likereports,websites,brochure and articles from
variousjournals,papers which have been already passed through some
statistical process.

Sampling Method:
 Multi-stage sampling has been followed. Since there are large number
of members, so, data has been collected randomly.
Method for data collection:
A structured interview schedule was prepared and used for collecting
data from the women SHG member. Both open ended and close ended
questions were included in the schedule.
Sample Size:
75 samples have been collected from both the blocks of East
champaran, (North Bihar).
Statistical tools:
Simple statistical tools have been used to analyse and interpret.
Structured and straight forward questionnaire is used so thataccurate
and relevabt data can be collected.
LIMITATIONS OF THE STUDY:
The study is limited with the rural areas of North Bihar and only data
related to rural women have been taken. Hence, data related to urban
women have been excluded from the study.
. The sample size 75 is very small and more than that could not be
possible.
 The time period to prepare the report was less.
The information was collected only from those rural women who are
engaged in the income generating activities. The researcher has
focused her attention on the self-help groups which get micro financial
assistance from commercial banks.
Distribution of respondent according to Age group:
 Education Number of Percentage
Age group Number respondent
of Percentage
Illiterate respondent
35 46.66
Up to 25 years
Primary level15 20 20 26.67
25-30 Middle 30 12 40 16
30-35 Secondary 22 8 30 10.67
35-40 Total 8 75 10 100
75 100

Role of Microfinance in the Empowerment of Rural Women of North

Bihar:
Role of microfinance in the empowerment of rural women have been
judged on the basis of economic empowerment. There are many
indicators of economic empowerment to measure the role of
microfinance for the empowerment of rural women. Some of them are
as follow:
1. Level of Educational: The level of education is one of the main
indicators to measure the empowerment of women. Out of total
respondents, 35 (46.66%) respondents have never gone to school
and they are not able to read or write anything but some of them
can sign only. So, large numbers of illiteracy are one of the main
causes for the empoerement or rural women.
Distribution of respondent according to Education

2.Participation in Microfinance Programme: Respondents were

regularly participating in the meeting. Out of total respondents, only 3
(3.77%) respondents were not participating in the meeting on
regular basis.
3.Involvement of Rural Women in Employment: It is not found
directly involvement of rural women in employment after joining
microfinance programme in the study area. Rural women were
benefited from micro finance programmes but not in terms of
employment.
4.Creation of Assets: Before Joining microfinance programme 15
(19.81%) responder said that they have assets in their names and
after joining microfinance programme 20 (27.35%) responder
declared that they have assets in their names. The increase in
creation of assets was 7.54%.
5.Participation of Rural Women in Household Decision Making:
Most of the rural women said that no significant change was
examined in decision making after joining microfinance
programme. Out of 75 respondents 30 (40%) responder said that
they have felt moderate change in decision making and 41
(54.66%) have felt no change in decision making and rest i.e. 4
(5.40%) have felt significant change in decision making.
6.Contribution of Women into Household Income: After joining
microfinance programme, the contribution of women into
household income has changed but in very small percentage.
Before joining of microfinance programme, the contribution of
women into household income was 35.84%, which has increased
to 38.67% the increase was only 2.83%.
FINDINGS
 In this we see that most the the villages people aren’t aware of
microfinance.they generally prefer bank for the loans.
 The percentahe of literate peiplr in rural area is very less and the facts
about microfinance are beinf manipulared by the microfinance
cooperations.They don’t get proper guidance and training about this
 facilities resulting incomplete delievery ofpros and cons of the
microfinance.
 Among all more then half(59%) respondent aren’t aware of MFIs which
leads to introducing new schemes for awareness of the MFIs.
 37% people know about MFIs through their neighbor ,relatives and many
other sources.
 Less then half respondents are in favor of microfinance and they
support it by respondinf that it empowers and helps in reducing the
country from country.
 Micro credit and micro saving is the main services of microfinance which
prople usually use.
 35% of the people are takin loan for agriculture purpose and 46% take it
for personal consumpotion.
 41% of respondent say that they want loan for their business purpose
and empowering themselves.
 21% people are facing difficulty during taking the loan like cooperation of
representatives and 23% prople facing problem of excessive
documentation.