Women, Microfinance and Micro Enterprise Development: Issues in Sustainability

Abstract

The micro finance programme aims at enhancing the economic empowerment of poor women through credit services. The programme is expected to trigger a process of graduation of poor households out of poverty by breaking the vicious circle of 'low investment - low income - low investment'. Based on the primary as well as secondary data, the present paper shows that the micro finance programme might have helped these women to overcome the credit constraints that they faced traditionally but it has not helped them to overcome the project constraints. The beneficiary women are usually characterised by low skill level, hence are left with very limited options for income-generating activities that face structural constraints such as low income elasticity, unavailability of economies of large scale, inaccessibility of resources and limited market linkages. In addition the poor borrowers are loosing control over the productive assets like water, agricultural land, forestland and/or grazing land making them more vulnerable to the market forces. With huge influx of funds in the sector, accessibility to credit for poor is more on priority than enhancing the capabilities that help to improve the credit absorption for the micro entrepreneurs. So the findings suggests that the credit absorption can be more effective if the micro finance practitioners link it with entrepreneurial training and other area development programme.