micro-finance mechanism - unleashing of energy and

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.

ADALYA JOURNAL

Volume 8, Issue 11, November 2019

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http://adalyajournal.com/189

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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http://en.wikipedia.org/wiki/Belgaum

http://en.wikipedia.org/wiki/Chikkamagaluru

http://en.wikipedia.org/wiki/Shimoga

http://en.wikipedia.org/wiki/Uttara_Kannada

http://en.wikipedia.org/wiki/Kodagu

http://en.wikipedia.org/wiki/Hassan_district

http://www.karnatakaapex.com/

http://www.karnatakaapex.com/

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*


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


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


Table 8 Food Expenditure of Beneficiaries

Mean Std.

Deviation

Std.

Error

Mean


of the Difference T df Sig. (2-

tailed) Lower Upper

-7532.65625 4713.85176 166.65983 -7859.79907 -7205.51343 -45.198 799 .000*


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


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


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



tailed) Lower Upper

-1535.28125 981.77341 34.71093 -1603.41664 -1467.14586 -44.230 799 .000*



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




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


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


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*



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


beneficiaries were broadly classified into four group‘s viz., (1) 1996-2000 (2) 2001-2005 (3)


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



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


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



tailed) Lower Upper

-3894.67500 2106.01113 74.45874 -4040.83285 -3748.51715 -52.306 799 .000*



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




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



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


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*



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


beneficiaries were broadly classified into four group‘s viz., (1) 1996-2000 (2) 2001-2005 (3)


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



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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