Impact of Micro Financing in Promoting Women Micro Entrepreneurship

Abstract

Micro financing has been revolutionizing the rural economy through the self-help groups. The success of the concept of micro credit through self-help groups has encouraged the government to use as an instrument to address the issues of poverty and unemployment. Given that SHG is a movement which ultimately leads to women empowerment, micro financing has been used to facilitate the women empowerment through promoting micro entrepreneurial activities among the women. The initial initiatives through SEWA in India, Grameen Bank in Bangladesh, have been extended to various parts of the country by NABARD. In Tamil Nadu the pilot initiative has been done by IFAD but it had withdrawn its intervention in the mid-nineties, in spite of repeated request from the state government. But the government continued the initiatives through establishing a separate department under Tamil Nadu Women Development Corporation called "Mahalir Thittam" [Women’s Project], and sown the seed in other districts which now have more than 4 lakh women SHGs in the state. This study has analysed the impact of micro financing of SHGs on Women micro entrepreneurship in Tiruchirappalli district. It has taken five different models of micro financing and examined the comparative performance of the models. It has arrived at a finding that the NGO facilitated model has proved better in empowerment indices and also initiating micro enterprises. The social empowerment has been found to be lagging behind economic empowerment. The transaction cost differences has shown that the SHG loan incurs the least transaction cost, the SWOT analysis has been done and the group approach and peer monitoring were considered as strengths. The study has recommended that the SHG approach of micro financing may be encouraged but with the caution to not to promote them as agents of capital accumulation, not as vote banks, but as co-operatives to work for the empowerment of the entire women community.