Rural Women Entrepreneurship through Self-Help Groups and Micro-Finance Institutions: Do they really lead to Economic Development of Poor Women?

Abstract

Economic independence is one of the pre-conditions for the women to gain equal status in day-to-day life along with their male counterparts. Identifying the importance of economic empowerment and eradication of financial exclusion of the rural women, several governments in India have been implementing various developmental programmes and schemes. Recently, Self-Help Groups (SHGs) have become one of the vehicles of development to empower rural poor women economically by lending credit facilities through rural banks and providing a space to create various entrepreneurial activities in the rural areas. These groups are positively altering the lifestyles of the rural women in terms of their occupations, earnings, involvement and participation in the society. The SHG movement has been so highlighted particularly in Andhra Pradesh which brought a radical change in the position of rural women from that of daily-wage laborer to an entrepreneur. Simultaneously, Micro-Finance Institutions (MFIs) have also been playing an active role in the rural regions where the rural banks do not exist; and lending credits to the poorest sections without any delay with simple procedures. But recently, some of the SHG women in Rural Andhra Pradesh are committing suicides and some of them are migrating to the nearby towns due to their inability to repay the borrowed money from the MFIs who are charging high rate of interest unlike rural banks has led to several critics. In these circumstances the paper explores the possibilities and potentialities of SHGs to emerge as an institution of rural entrepreneurship and promoting women as a rural entrepreneur through SHGBank Linkage Programme. Parallel to this, it also examines does MFIs really making rural women as a self-employed entrepreneur in the rural areas or is it pushing women in more vulnerable conditions due to the pressure on repayments with high interest rates?