Micro-Finance Mechanism - Unleashing of Energy and Creativity among
Rural Self Help Groups (SHG’s)
Shivaprasad. G
Associate Professor,
ABBS School of Management, Bengaluru, Karnataka, India.
V.P.Sriram
Associate Professor,
Acharya Bangalore B-School (ABBS), Bengaluru, Karnataka, India.
ABSTRACT
Micro Finance too as a financial tool has also seen ups and downs. During 2011, market
commentators predicted the end of India’s microfinance market but as on 31 March 2014,
there were more than 74.30 lakh savings-linked SHGs, covering over 9.7 crore poor
households. The total savings of these SHGs with banks amounted to`9897.42 crore. The
number of credit-linked SHGs under the programme was 41.97 lakh. In 2011, the
government of the state of Andhra Pradesh was seeking to prohibit the microloans
business. After the crisis, RBI has handled the sector very vigilantly, carefully and very
thoughtfully. The National Bank continued to provide 100 per cent refinance assistance to
banks for financing SHGs. The SHG–Bank Linkage Programme (SHG–BLP) has
expanded substantially since it was first launched on a pilot scale in 1992. The
geographical spread of the movement has also been quite impressive from an essentially
Andhra Pradesh – Karnataka phenomenon in the beginning now spreading to even the
most remote corners of India. Over 95 million poor rural households are now part of this
world’s largest micro Credit initiative. The present research study has been undertaken to
encompass various major dimensions of the microfinance in respect of improvement in
economic conditions of women SHG members, specifically in Malenadu region in the state
of Karnataka.
Keywords: Microfinance, Economic Condition, Self Help Groups, Rural Women
Poverty.
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Micro-Finance Mechanism - Unleashing of Energy and Creativity among
the Rural SHGs
1. INTRODUCTION
The position enjoyed by women in the Rig-Vedic period deteriorated in the later
Vedic civilization. Women were denied the right to education and widow remarriage. They
were denied the right to inheritance and ownership of property. Many social evils like child
marriage and dowry system surfaced and started to engulf women. During Gupta period, the
status of women immensely deteriorated. Dowry became an institution and Sati Pratha
became prominent. During the British Raj, many social reformers such as Raja Rammohun
Roy, Ishwar Chandra Vidyasagar, and Jyotirao Phule started agitations for the empowerment
of women. Their efforts led to the abolition of Sati and formulation of the Widow Remarriage
Act. Later, stalwarts like Mahatma Gandhi and Pt. Nehru advocated women rights. As a
result of their concentrated efforts, the status of women in social, economic and political life
began to elevate in the Indian society. Based on the ideas championed by our founding
fathers for women empowerment, many social, economic and political provisions were
incorporated in the Indian Constitution. Women in India now participate in areas such as
education, sports, politics, media, art and culture, service sector and science and technology.
However, due to the deep- rooted patriarchal mentality in the Indian society, women are still
victimized, humiliated, tortured and exploited. Even after almost seven decades of
Independence, women are still subjected to discrimination in the social, economic and
educational field. This study will address various dimensions of the microfinance in respect
of improvement in economic conditions of women SHG members.
2. REVIEW OF LITERATURE
An attempt is made to review the existing available literature relating to functions of
SHGs, impact of microfinance‘s on the economic status of women, in the following section.
Rural women are silent workers in the rural economy. Very often, their contribution goes
unnoticed. They are free labour in the family and works for the agricultural lands of rural
families. This work of them not only goes unnoticed but also does not earn her the respect
she deserves to get. The realities of rural life in India are difficult to comprehend. The lives of
most people in rural India have hardly improved (Abraham George, 2001)1. As a result,
women's economic, social, and cultural rights are routinely violated in housing, education,
and employments, as well as their right to food or a means of subsistence (Ngwakwe, 2002)2.
Women are considered central to the success of poverty alleviation efforts. Because of
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inequities in education, levels of skill, social constraints on their mobility and the attitudinal
and institutional barriers to which their behavior is subjected, women in households with an
income below the absolute or relative threshold of poverty remain poorer than men of the
same households (Soofia Mumtaz, 2000)3. Women empowerment is important in order to
make use of humankind‘s full potential; 70 percent of the world‘s poor are women (Khan
and Noreen, 2012)4. ―Microfinance is based on the premise that the poor have skills which
remain unutilized or underutilized. It is definitely not the lack of skills, which make poor
people poor. Charity is not the answer to poverty. It only helps poverty to continue. It creates
dependency and takes away the individual‘s initiative to break through the wall of poverty.
Unleashing of energy and creativity in each human being is the answer to poverty‖
(Muhammad Yunus, 2003)5.
3. OBJECTIVE OF THE STUDY
The Major objective of the study is to assess the reformative role of micro-finance on
economic conditions of the women Self Help Group members.
4. TESTING OF HYPOTHESIS
Hypothesis was framed to test the impact of injection of microfinance and reforms framed in
the sector.
Hypothesis Testing (H1): There is a positive and upward (improvement) in various
conditions of the women under SHGs through reforms in Microfinance.
5. RESEARCH METHODOLOGY
This study is Descriptive in nature. Ex Post Facto is a quasi-experimental study
examining how an independent variable, present prior to the study.Malenadu covers portions
of Belgaum, Chikkamagaluru, Shimoga, Uttara Kannada, Kodagu and Hassan districts. Each
block is designated as stratum. The purposive sampling technique was adapted to select
sample self-help groups and member respondents from all the six blocks in Malenadu
Region. The size of sample for SHGs is calculated with a margin of error at 5 percent level
and 95 percent confidence level arrived as 800 members. Further from each stratum (block)
the sub sample size is calculated proportionately. The list of SHGs linked towns and SHGs
who have obtained finance from PACs was obtained from the Karnataka State Co-Operative
Apex Bank Ltd, Bangalore. This study was broadly conducted based on the primary
information collected through a structured questionnaire interview. Analysis and assessment
of the impact was done through descriptive statistics such as Cronbach alpha, which is used
to measure the internal consistency to check how, closely related are the set of items in a
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group. Shapiro-Wilk, is a test for normality which helps in decision rules towards hypothesis
testing. Apart from the above, the following tests were also used to further assist the data
analysis and interpretation, Paired sample T-test; ANOVA
6. DATA ANALYSIS AND ELUCIDATION
6.1. Profile of Women Respondents
a) Out of 800 beneficiaries, 82.125 percent were Hindus, 9.5 percent were Muslims, 7.25
percent were Christians and 1.125 percent was others. Further, it is observed that most of
the beneficiaries (82 percent) were from Hindus and remaining 18 percent from other
religion.
b) It is evident from that out of 800 beneficiaries 12.625 percent were SC caste,
26.625percent were ST, 46.25 percent were OBC, 6.625 percent were GM and 7.875
percent were from other caste.
c) Evidently, a majority of the beneficiaries (47 percent) and non-beneficiaries (48 percent)
were found in the age group of 36-45 years. It may be inferred that majority of
respondents were clustered in the working age groups.
d) It is noticed from the the illiterates are found more in numbers in case of beneficiaries
rather than non-beneficiaries as the percentage is 35.5 percent. The illiterates were
attracted much towards microfinance to improve their standard of living instead of
literates whose percentage is very less as noticed from the data.
e) The most of the sample respondents were married constituting 93 percent among the
beneficiaries and 94.5 percent among non-beneficiaries.
f) Those who joined microfinance programme are more conscious about the family planning
than the non-beneficiaries are.
g) The occupational pattern shows that agriculture is the main occupation of the beneficiary
respondents. Agriculture is the predominant sector for microfinance beneficiaries of the
Malenadu region, which employs nearly 47.125 percent of the total respondents.
6.2. Reliability Test
The result of the reliability test on the opinion of the direct stakeholders of SHGs
regarding the issue whether impact on members of SHGs and its involvement in large social
issues be peripheral or core components of quality indicators of SHGs reveals that
Cronbach‘s Alpha is 0.795 (number of items 7) which is acceptable (Cronbach, 1951;
Nunnally & Bernstein, 1994 and George and Mallery,2003).The results are tabulated in
Table. The result proves that these indicators are closely related as a set of items under
economic indicators‘ group.
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Cronbach’s Alpha Test
Reliability Statistics
Cronbach's Alpha N of Items
.795 7
6.2.1.Cronbach’s Alpha Item-wise Test Statistics
Item-Total Statistics
Scale Mean if
Item Deleted
Scale Variance
if Item Deleted
Corrected
Item-Total
Correlation
Cronbach's
Alpha if Item
Deleted
Income 9883.38 13739084.966 1.000 .871
Savings 16213.40 35548007.449 .995 .681
Food Expenditure 17152.16 41398128.167 .960 .722
Personal Expense 19060.08 52226189.887 .585 .800
Home Appliances 18359.24 47020988.570 .999 .761
Fixed Assets 18493.25 48662041.802 .977 .773
Education Expense 19439.00 53694724.339 .817 .809
Scale Statistics
Mean Variance Std. Deviation N of Items
19766.75 54956339.862 7413.254 7
The item-wise result shows that Income was the most consistent factor, which was
also observed during data analysis. The impact of microfinance was very much influential in
the economic status. The spending ability increased with economic improvement.
6.3. Impact of Microfinance on Economic Conditions of SHGs
6.3.1. Impact of Microfinance on Income Level of Beneficiaries
Income is one of the important indicators to measure the level of living of the members of the
society. The data regarding the individual‘s average annual income of beneficiaries was
estimated at two points of time i.e. ‗pre‘ and ‗post‘ period and same is presented in table 1.
The following hypotheses were framed to study the difference in the income level of
beneficiaries.
Table 1 - Income Level of Beneficiaries
Mean Std.
Deviation
Std. Error
Mean
95% Confidence Interval
of the Difference t df Sig. (2-
tailed) Lower Upper
-32205.62500 18460.80442 652.68800 -33486.8107 -30924.43928 -49.343 799 .000*
*indicates significant at 5 percent level Source: Field survey.
Since the probability value is less than level of significance (0.05) which shows that
there is a significant difference in the income level of beneficiaries in the pre and post
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microfinance. It is evident from the table 1 that microfinance has helped beneficiaries to
improve their income level.
6.3.2. Analysis of Per Capita Income of the Beneficiaries
It is believed by most that any injection of finance into business will, invariably to
some extent, lead to a better improvement in the income level. Carrying out from this belief
an effort has been to verify this claim by comparing the income level of the women SHGs
members before receiving microfinance and after receiving micro-finance. The analysis will
provide an insight by quantifying the increase or decreasing in the income level with the
influx of micro-finance.
Table 2 Income Distribution before and after micro-finance
Income Level Before Micro-Finance After Micro-Finance
2000-11999 592 003
12000-21999 207 038
22000-31999 ─ 225
32000-41999 ─ 224
42000-51999 ─ 093
52000-61999 ─ 114
62000-71999 001 049
72000-81999 ─ 020
82000-91999 ─ 023
92000-101999 ─ 011
Grand Total 800 800 Source: Field Survey
Table 2 shows the distribution of income of women SHG members. It can be seen that
there has been significant increase and shift in income of the members after micro-finance.
There were, except one, no group above the income of 22,000 before micro-finance.
Similarly, there are very few, 41 respondents, who were having income below 22,000.A
humungous shift in income from 99% (799 respondents) making less than 22,000 towards
95% (759 respondents) making income more than 22,000 can be seen. This reveals that
microfinance has played a landslide change and impacted the income of members. The
generation of income from microfinance scheme might not be identical among different
beneficiaries. To find out the differential impact among the various period of association, the
total beneficiaries were broadly classified into four groups viz., (1) 1996-2000 (2) 2001-2005
(3) 2006-2010 and (4) 2011 onwards. To find out the differential impact of microfinance on
beneficiaries among the groups ANOVA test was employed. Income level of Beneficiaries
among the groups in Malenadu Region is presented in Table 3
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Table 3 - Income level of Beneficiaries among the Groups
Sum of
Squares Df Mean Square F Sig.
Between Groups 9.28110 3 3.09410 166.956 .000*
Within Groups 1.47511 796 1.8538
Total 2.40311 799 *indicates significant at 5 percent level Source: Field survey.
The results of ANOVA test furnished in Table 3 reveals the difference in respect of
individuals average annual per capita income of the beneficiaries ‗between the group‘ and
‗within the groups‘ and its F-value, viz. 166.956 is significant at 5%. Thus, it is statistically
evident that the beneficiaries had a positive impact of microfinance as it increased their
income level considerably.
6.3.3. Impact of Microfinance on Savings Level of Beneficiaries
It has been observed that influx of micro-finance has considerably increased the SHG
members‘ income considerably. An effort has been made to further study whether this
increase in the income has led to increase in the savings/investments level before and after
microfinance. It is a common axiom that an increase in income will lead to more opportunity
towards savings/investments. The below table gives an insight to the savings/investments of
the women SHG members.
Table 4 Savings/Investments of women SHG members
Savings/Investments Before Microfinance After Microfinance
600-1599 033 001
1600-2599 163 001
2600-3599 235 001
4600-5599 199 002
5600-6599 132 002
6600-7599 028 003
7600-8599 009 011
8600-9599 — 026
9600-10599 — 087
10600-11599 — 073
11600-12599 — 072
12600-13599 — 102
13600-14599 — 060
14600-15599 — 070
15600-16599 — 066
16600-17599 — 036
17600-18599 — 025
18600-19599 — 028
19600-20599 — 038
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20600-21599 — 024
21600-22599 — 061
22600-23599 — 006
23600-24599 001 004
24600-25599 — 001
Grand Total 800 800
Source: Field Survey
There has been a considerable increase in the savings of the members post
microfinance as it can be seen from the table that almost 779 (97.37 percent) of the
respondents are having a savings/investments of more than Rs. 10,000. But a significant
observation to be made is that there are more SHG members whose majority of income is
going towards savings/investments. This might be due to the fact that most of the SHG
members‘ income is a secondary source of income. One of the main objectives of SHG is to
inculcate saving habits and to improve their economic well-being. This has given scope to the
SHG women to generate savings in order to provide economic security to them. Besides,
more the savings at their disposal, more is their repayment capacity to repay the bank loans
which, in turn would encourage them to raise fresh loans for further promotion of their
income generating activities. The data regarding the individual‘s average annual savings of
beneficiaries was estimated at two points of time i.e. ‗pre‘ and ‗post‘ period and same is
presented in table.
Table 5 – Saving level of Beneficiaries
Mean Std.
Deviation
Std.
Error
Mean
95% Confidence
Interval of the
Difference t df
Sig.
(2-
tailed) Lower Upper
-13657.25 7347.22957 259.76379 -
14167.15
-
13147.3499
-
52.576
799 .000*
*indicates significant at 5 percent level Source: Field survey.
Since the probability value is less than level of significance (0.05), it shows and
means that there is a significant difference in the saving level of beneficiaries in the pre and
post microfinance period. It is evident from the table 5 that microfinance has helped
beneficiaries to increase their saving level. In addition women also enjoyed full liberty in
saving with the group and in their own name without any inhibition. They were able to
influence their husbands to contribute to savings. Many were happy to notice that the savings
in their name gave them a considerable social status both at home and in the community.
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6.3.4. Analysis of Per Capita Savings of the Beneficiaries
To find out the differential impact among the various period of association, the total
beneficiaries were broadly classified into four groups viz., (1) 1996-2000 (2) 2001-2005 (3)
2006-2010 and (4) 2011 onwards. To find out the differential impact of microfinance on
savings of beneficiaries among the groups ANOVA test was employed. Saving level of
Beneficiaries among the groups in Malenadu Region is presented in Table.
Table 6 Saving level of Beneficiaries among the Groups
Sum of Squares Df Mean Square F Sig. (2 tailed)
Between Groups 1.48810 3 4.9609 167.305 .000*
Within Groups 2.36010 796 2.9657
Total 3.84810 799
*indicates significant at 5 percent level Source: Field survey.
The results of ANOVA test (furnished in Table 6) reveal the difference in respect of
individuals average per capita savings of the beneficiaries ‗between the group‘ and ‗within
the groups‘ and its F-value, viz.167.305 is significant at 5 percent. Thus, it is evident, that
there is much of significant difference in the average savings of individuals.
6.3.5 Impact of Microfinance on Food Expenditure of Beneficiaries
The expenditure pattern reveals the improvement of living standards of women SHGs
and their children. When the saving rate is increased, they actively participated in income-
generating activities, which resulted in further more income. With these, their purchasing
power increased to such a level as to feed their children keeping the mal-nutrition at arm‘s
length.
The way the microfinance programme influenced the expenditure pattern of the
members is discussed in the following tables. The data regarding the average annual food
expenditure of beneficiaries was estimated at two points of time i.e. ‗pre‘ and ‗post‘ period
and same is presented in the table 7.
Table 7 Food Expenditure
No. of Respondents Before Microfinance After Microfinance
<2000 207 003
2000-4000 541 007
4000-6000 051 094
6000-8000 ─ 208
8000-10000 ─ 162
10000-12000 ─ 079
12000-14000 ─ 122
14000-16000 ─ 045
16000-18000 001 034
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18000-20000 ─ 012
>20000 ─ 034
Grand Total 800 800
Source: Field Survey
Table 8 Food Expenditure of Beneficiaries
Mean Std.
Deviation
Std.
Error
Mean
95% Confidence Interval
of the Difference T df Sig. (2-
tailed) Lower Upper
-7532.65625 4713.85176 166.65983 -7859.79907 -7205.51343 -45.198 799 .000*
*indicates significant at 5 percent level Source: Field survey.
Since the probability value is less than level of significance (0.05), there is a
significant difference in the food expenditure of beneficiaries‘ in the pre and post
microfinance period. It is evident from the table 8 that microfinance has helped beneficiaries
in improving their affordability for the food expenditure.
6.3.6. Analysis of Per Capita Food Expenditure of the Beneficiaries
To find out the differential impact of microfinance on beneficiaries among the groups,
ANOVA test was employed. Food expenditure of Beneficiaries among the groups in
Malenadu Region is presented in Table 9 To find out the differential impact among the
various period of association, the total beneficiaries were broadly classified into four groups
viz., (1) 1996-2000 (2) 2001-2005 (3) 2006-2010 and (4) 2011 onwards.
Table 9 Food Expenditure of Beneficiaries among the Groups
Sum of Squares Df Mean
Square F Sig. (2 tailed)
Between Groups 5.8039 3 1.9349 167.029 .000*
Within Groups 9.2199 796 1.1587
Total 1.50210 799
*indicates significant at 5 percent level Source: Field survey.
The results of ANOVA test, furnished in Table 9, reveal the difference in respect of
average food expenditure of beneficiaries ‗between the group‘ and ‗within the groups‘ and its
F-value, viz.167.029 is significant at 5 percent. Thus, it is evident, that there is much of
significant difference in the average food expenditure of individuals between the
beneficiaries and within them.
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6.3.7. Impact of Microfinance on Personal Expenditure of Beneficiaries
Table 10 Personal Expenditure
Level Before Microfinance After Microfinance
200-1200 744 038
1200-2200 055 449
2200-3200 ─ 183
>3200 001 130
Grand Total 800 800
Source: Field Survey
The data regarding the individual‘s average annual Personal expenditure of
beneficiaries was estimated at two points of time i.e. ‗pre‘ and ‗post‘ period and same is
presented in table 11.
Table 11 Personal Expenditure of Beneficiaries
Mean Std.
Deviation
Std.
Error
Mean
95% Confidence Interval
of the Difference T df Sig. (2-
tailed) Lower Upper
-1535.28125 981.77341 34.71093 -1603.41664 -1467.14586 -44.230 799 .000*
*indicates significant at 5 percent level Source: Field survey.
Since the probability value is less than level of significance (0.05), there is a
significant difference in the personal expenditure of beneficiaries‘ in the pre and post
microfinance. It is evident from the table 11 that microfinance has helped beneficiaries to
improve their affordability for the Personal expenditure.
6.3.8. Analysis of Per Capita Personal Expenditure of the Beneficiaries
To find out the differential impact among the various period of association, the total
beneficiaries were broadly classified into four groups viz., (1) 1996-2000 (2) 2001-2005 (3)
2006-2010 and (4) 2011 onwards. To find out the differential impact of microfinance on
beneficiaries among the groups ANOVA test was employed. Personal expenditure of
Beneficiaries among the groups in Malenadu Region is presented in Table 12
Table 12 Personal Expenditure of Beneficiaries among the Groups
Sum of
Squares Df
Mean
Square F Sig. (2 tailed)
Between Groups 2.822E8 3 9.405E7 203.022 .000*
Within Groups 3.688E8 796 463267.256
Total 6.509E8 799
*indicates significant at 5 percent level Source: Field survey.
The results of ANOVA test are furnished in Table 12 reveals the difference in respect
of average individual per capita personal expenditure of beneficiaries ‗between the group‘
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and ‗within the groups‘ and its F-value, viz.203.022 is significant at 5 percent. Thus, it is
evident, that there is much of significant difference in the average personal expenditure of
individuals between the beneficiaries and within them.
6.3.9. Impact of Microfinance on Purchase Capacity of Home Appliances by the
Beneficiaries
The data regarding the individual‘s average annual expenditure on Purchase of Home
Appliances by beneficiaries was estimated at two points of time i.e. ‗pre‘ and ‗post‘ period.
Table 13 Purchasing Capacity
Level Before Microfinance After Microfinance
<1250 307 002
1250-2250 460 004
2250-3250 032 063
3250-4250 ─ 130
4250-5250 ─ 180
5250-6250 ─ 118
6250-7250 ─ 067
7250-8250 ─ 077
8250-9250 ─ 058
9250-10250 ─ 027
>10250 001 074
Grand Total 800 800
Source: Field Survey
To check the difference in the individual‘s average annual expenditure on Purchase of
Home Appliances of beneficiaries during the post microfinance period, paired sample test
was used and the result is presented in Table 14.
Table 14 Purchase of Home Appliances by the Beneficiaries
Mean Std.
Deviation
Std.
Error
Mean
95% Confidence
Interval of the
Difference T Df Sig. (2-
tailed)
Lower Upper
-4788.34375 2900.49006 102.54781 -4989.63869 -4587.04881 -46.694 799 .000*
*indicates significant at 5 percent level Source: Field survey.
Since the probability value is less than level of significance (0.05), there is a
significant difference in the expenditure on Purchase of Home Appliances by the
beneficiaries‘ in the pre and post microfinance. It is evident from the table 14 that
microfinance has helped beneficiaries to improve their Purchase of Home Appliances.
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6.3.10. Analysis of Per Capita Expenditure on Purchase Capacity of Home Appliances
by the Beneficiaries
To find out the differential impact among the various period of association, the total
beneficiaries were broadly classified into four group‘s viz., (1) 1996-2000 (2) 2001-2005 (3)
2006-2010 and (4) 2011 onwards. To find out the differential impact of microfinance on
beneficiaries among the groups ANOVA test was employed. Expenditure on Purchase of
Home Appliances by the Beneficiaries among the groups in Malenadu Region is presented in
Table 15
Table 15 Purchase of Home Appliances by the Beneficiaries among the Groups
Sum of
Squares Df Mean Square F Sig.
Between Groups 2.6099 3 8.6978 208.589 .000*
Within Groups 3.3199 796 4169405.308
Total 5.9289 799
*indicates significant at 5 percent level Source: Field survey.
The results of ANOVA test are furnished in Table 15 reveals the difference in respect
of average individual expenditure on Purchase of Home Appliances by the beneficiaries
‗between the group‘ and ‗within the groups‘ and its F-value, viz. 208.589 is significant at 5
percent. Thus, it is evident, that there is much of significant difference in the average
expenditure on Purchase of Home Appliances of individuals between the beneficiaries and
within them.
6.3.11. Impact of Microfinance on Fixed Assets and Livestock Investment by the
Beneficiaries
The hard core of the rural poverty is constituted by the marginal farmers, agricultural
and rural artisans, possessing little or virtually no assets. Any development strategy which
aims at improving the rural poor must aim at creating new productive assets for them. The
philosophy underlying the SHG originates from the imperative that the main attack on rural
poverty has to be by endowing the rural poor women with productive assets and or skills so
that they are assumed of income which raises them above the poverty line. SHGs may also
have an inter-alia impact in creating additional assets as a result of reinvestment of surplus
derived from savings.
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Table 16 Fixed Assets and Livestock
Levels Before Microfinance After Microfinance
190-1189 359 003
1190-2189 431 009
2190-3189 009 091
3190-4189 ─ 205
4190-5189 ─ 174
5190-6189 ─ 095
6190-7189 ─ 104
7190-8189 001 050
More than 8190 ─ 069
Grand Total 800 800
Source: Field Survey
The data regarding the individual‘s average annual investment on fixed assets and
livestock by beneficiaries was estimated at two points of time i.e. ‗pre‘ and ‗post‘ period and
same is presented in table 17.
Table 17 Investment on Fixed Assets and Livestock by the Beneficiaries
Mean Std.
Deviation
Std.
Error
Mean
95% Confidence Interval
of the Difference T df Sig. (2-
tailed) Lower Upper
-3894.67500 2106.01113 74.45874 -4040.83285 -3748.51715 -52.306 799 .000*
*indicates significant at 5 percent level Source: Field survey.
Since the probability value is less than level of significance (0.05), there is a
significant difference in the average annual investment on fixed assets and livestock by the
beneficiaries‘ in the pre and post microfinance. It is evident from the table 4.25 that
microfinance has helped beneficiaries to invest more on Fixed Assets and Livestock.
6.3.11. Analysis of Per Capita Investment on Fixed Assets and Livestock by the
Beneficiaries
To find out the differential impact among the various period of association, the total
beneficiaries were broadly classified into four groups viz., (1) 1996-2000 (2) 2001-2005 (3)
2006-2010 and (4) 2011 onwards. To find out the differential impact of microfinance on
beneficiaries among the groups ANOVA test was employed. Annual investment on fixed
assets and livestock by the Beneficiaries among the groups in Malenadu Region is presented
in Table 18
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Table 18 Investment on Fixed Assets and Livestock by the
Beneficiaries among the Groups
Sum of Squares Df Mean Square F Sig.
Between Groups 1.0249 3 3.4148 127.942 .000*
Within Groups 2.1249 796 2668419.397
Total 3.1489 799
*indicates significant at 5 percent level Source: Field survey.
The results of ANOVA test are furnished in Table 18 reveals the difference in respect
of average individual Investment on fixed assets and livestock by the beneficiaries ‗between
the group‘ and ‗within the groups‘ is presented and its F-value, viz.127.942 is significant at 5
percent. Thus, it is evident, that there is much of significant difference in the average
Investment on fixed assets and livestock of individuals between the beneficiaries group and
within them.
6.3.12. Impact of Microfinance on Educational Expenditure by the Beneficiaries
Table 19 Educational Expenditure
Levels Before Microfinance After Microfinance
<190 47 7
190-690 752 121
690-1190 ─ 382
1190-1690 ─ 181
1690-2190 1 75
2190-2690 ─ 33
2690-3190 ─ 1
Grand Total 800 800
Source: Field Survey
Microfinance helped the clients in realizing the need for providing education to their
children‘s and other family members. The data regarding the individual‘s average annual
Educational expenditure of beneficiaries was estimated at two points of time i.e. ‗pre‘ and
‗post‘ period and same is presented in table 20.
Table 20 Educational Expenditure of Beneficiaries
Mean Std.
Deviation
Std.
Error
Mean
95% Confidence
Interval of the
Difference T df Sig. (2-
tailed)
Lower Upper
-797.41875 487.75741 17.24483 -831.26927 -763.56823 -46.241 799 .000*
*indicates significant at 5 percent level Source: Field survey.
Since the probability value is less than level of significance (0.05), there is a
significant difference in the Educational expenditure of beneficiaries‘ in the pre and post
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microfinance. It is evident from the table 20 that the beneficiaries of microfinance have
recorded a satisfactory increase in their incremental expenditure on education.
6.3.13. Analysis of Per Capita Educational Expenditure by the Beneficiaries
To find out the differential impact among the various period of association, the total
beneficiaries were broadly classified into four group‘s viz., (1) 1996-2000 (2) 2001-2005 (3)
2006-2010 and (4) 2011 onwards. To find out the differential impact of microfinance on
beneficiaries among the groups ANOVA test was employed. Educational expenditure of
Beneficiaries among the groups in Malenadu Region is presented in Table 21.
Table 21 Educational Expenditure of Beneficiaries among the Groups
Sum of Squares df Mean Square F Sig.
Between Groups 5.8867 3 1.9627 117.638 .000*
Within Groups 1.3288 796 166776.212
Total 1.9168 799
*indicates significant at 5 percent level Source: Field survey.
The results of ANOVA test are furnished in Table 21 reveals the difference in respect
of average individual Educational expenditure of beneficiaries ‗between the group‘ and
‗within the groups‘ is presented and its F-value, viz.117.638 is significant at 5 percent.
Thus, it is evident, that there is much of significant difference in the average Educational
expenditure of individuals between the beneficiaries and within them.
7. FINDINGS OF THE RESEARCH STUDY
7.1. Economic Conditions of Women Self-Help Group members
a) Income Level: There is a significant difference in the income level of beneficiaries in the
pre and post microfinance. It is evident, that there is much of significant difference in the
average per capita income of individuals between the beneficiaries and within them.
Taking the period of association and the approached (non-association) wise income of the
respondents into consideration, 1996-2000 groups benefited more which constituted
11.82 percent increase in CAGR and had highest income in the post microfinance period
i.e Rs. 49961.50, which is more in worth than any other period of association. As
compared to the beneficiaries, the non-beneficiaries could not achieve significant increase
in the average annual income in the Malenadu region.
b) Savings Level: There is a significant difference in the saving level of beneficiaries in the
pre and post microfinance period. The results of ANOVA test reveal the difference in
respect of individuals average per capita savings of the beneficiaries ‗between the group‘
and ‗within the groups‘ and its F-value, viz.167.305 is significant at 5 percent. It is
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noticed that the savings generated with the help of microfinance is very high constituting
20.11 percent increase as compared with the non-beneficiaries whose savings are only
1.08 percent.
c) Food Expenditure: There is a significant difference in the food expenditure of
beneficiaries‘ in the pre and post microfinance period. There is much of significant
difference in the average food expenditure of individuals between the beneficiaries and
within them. Period of association analysis shows that, beneficiaries who availed
microfinance during 1996-2000 recorded the highest spending of Rs. 13918.10, but it is
just Rs. 3188.50 during the post period for the non-beneficiaries.
d) Personal Expenditure: There is a significant difference in the personal expenditure of
beneficiaries‘ in the pre and post microfinance. The results of ANOVA test reveals the
difference in respect of average individual per capita personal expenditure of
beneficiaries ‗between the group‘ and ‗within the groups‘ and its F-value, viz. 203.022 is
significant at 5 percent. The personal expenditure incurred by the beneficiaries is
comparatively high with the non-beneficiaries. It is 13.19 percent in beneficiaries and
1.20 percent in non-beneficiaries in the post period. This shows degree of freedom for
spending and affordability of beneficiaries is much higher than non-beneficiaries.
e) Purchase of Home Appliances: There is a significant difference in the expenditure on
Purchase of Home Appliances by the beneficiaries‘ in the pre and post microfinance.
There is much of significant difference in the average expenditure on Purchase of Home
Appliances of individuals between the beneficiaries and within them. Period of
association analysis shows that, beneficiaries who availed microfinance during 1996-
2000 recorded the highest spending of Rs. 8950.90, but it is just Rs. 1771.10 during the
post period for the non-beneficiaries. Negligible improvement can be found in case of
non-beneficiaries in which the non-client from 2011 periods onwards recorded only 0.43
percent growth in their spending.
f) Investment on fixed assets and livestock: Microfinance has helped beneficiaries to
invest more on Fixed Assets and Livestock. The results of ANOVA test reveals the
difference in respect of average individual Investment on fixed assets and livestock by the
beneficiaries ‗between the group‘ and ‗within the groups‘ is presented and its F-value,
viz.127.942 is significant at 5 percent. Beneficiaries who availed microfinance during
1996-2000 recorded the highest Investment on fixed assets and livestock of Rs. 5495.40,
but it is just Rs. 628.90 during the post period for the non-beneficiaries. Negligible
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improvement can be found in case of non-beneficiaries in which the non-client from
2001-2005 periods recorded only 0.31 percent growth in their investment.
g) Educational Expenditure: There is a significant difference in the educational
expenditure of beneficiaries‘ in the pre and post microfinance. There is much of
significant difference in the average educational expenditure of individuals between the
beneficiaries and within them. The educational expenditure incurred by the beneficiaries
is comparatively high with the non-beneficiaries. It is 15.56 percent in case of
beneficiaries and 1.07 percent in non-beneficiaries in the post period. This shows
affordability of beneficiaries is much higher than non-beneficiaries.
8. SUGGESTIONS
Based on the finding made during the course of study, the following suggestions are made for
further improvement in the performance of SHGs and for the upliftment of women socially
and economically.
To make micro financing a success story we should switch over to the ―Islamic Banking
Model‖ which emphasis on zero percent rate of interest. Instead of disbursing crores of
rupees in subsidies to the beneficiaries of the microfinance, the government should
compensate the financing institutions with this subsidy amount so that they can provide
loans at zero percent rate of interest. This will reduce the risk of mis-utilization of loan
and will subsequently help to reduce nonperforming assets in the banks.
Insurance products should also be subsidized for the SHG members as a welfare measure
by the government. It would be ideal for poor segments of the rural population who
cannot invest in multiple insurance policies. There is a serious need to introduce micro
insurance products and bring together various players in the insurance sector for
supporting pilots for development of composite insurance products, which cater for life,
health, crops, assets and accidents.
9. CONCLUSION
The analysis shows, from the various tests conducted on all the parameters and factors that
the null hypotheses to be rejected. Hence, it can be concluded that the injection of
microfinance and reforms framed in the sector will lead into a change in the various
economic conditions of the women under SHGs in Malenadu Region, Karnataka. Self-help
Groups Bank linkage programme brings positive socio-economic changes in the lives of the
Women SHG members and also become a platform where the members were able to
access the information on various issues like rural Employment Guarantee Scheme,
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Panchayat Procedures, Public Distribution Systems etc. Thus, by this study, it can be
concluded that the rural women‘s have been greatly benefited by Microfinance. The
rural deprived now feel that they can also be associates in the process of rural
development by joining the microfinance. The training of the members by the Govt
and NGOs had increased their confidence, restored self-importance and improved their
social concern about the neighbours. This study has also indicated that even though the
members have joined the SHGs for various reasons, all of them have one common goal,
which is seeking a better standard of living through a better organization that works
for their benefits. The SHG can contribute to changes in economic conditions, social
status, decision making and increases women in outdoor activities. SHG not only changes
the outer form of a community or a society but also the social institutions as well as ideas of
the people living in the society.
10. DIRECTIONS FOR THE FURTHER RESEARCH
The present study examines the socio-economic condition of women SHG‘s in
Malenadu Region. It provides scope for further researches in the following areas viz.,
Government support for SHGs, micro women entrepreneurs, development of sociopreneurs
through SHGs, politics, SHGs and community development, contribution of SHGs to the
growth of rural and semi-urban areas, etc. It may be possible to carry out similar
investigations at different parts country as well. This research do not study explicitly the
extent to which banks contribute to the ultimate goals of poverty reduction, business
development or alleviation of market failures, and it does not either perform a cost-benefit
analysis of funds invested by donors or governments. Thus, the remaining dimensions are
recommended to be used as the framework for measuring banks level of adherence to their
poverty alleviation mission in future studies. Further research done on a bigger scale with
large sample size could shed light on how microfinance activities affect the socio-economic
conditions of the WSHGs, analytically. The current study did not consider the reasons of
motivation to join the microfinance program. Another area that has not been investigated is
the difficulties that the borrowers face to repay the loan. These areas deserve to be studied by
future researchers in the field. Further research could be conducted in this area and for
finding the reasons for the gap between demand and supply in terms of microfinance
services.
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