Sustainability of Microfinance Institutions in India

The objective of the chapter is to analyze the performance and constraints of selected occupation-related SHGs in India and examine the sustainability of SHGs providing microfinance on the basis of secondary data and primary data from Kendrapara district of Odisha, India. It is observed that majority of the SHG members are in young age group with low level of literacy, small and medium level of land holding, medium level of dependency ratio, forming experience, family encouragement, deferred gratification, risk willingness achievement motivation, and economic activities. The major variables that have contributed for enhancing the performance of SHGs are family encouragement, risk willingness, achievement motivation, extension participation, extension contact, and training programs. In order to enhance further motivation and build confidence, proper market linkage and training programs need to be established. Further, to ensure sustainable development of SHGs in future, federation of SHGs can be thought of by the implementing agency.

Performance of SHGs in the Backward Districts of West Bengal

One of the escape routes for the low-level development trap in the backward regions of India has been the formation of self-help groups (SHGs) and the provision of microfinance to the SHGs. This chapter analyzes the performance of such SHGs in some of the economically backward districts of West Bengal based on primary data collected from some sample drought-prone and non-drought-prone blocks of Paschim Medinipur and Bankura districts of West Bengal. The performance of sample SHGs in these drought-prone areas has been measured by (1) per-capita deposit, (2) per-capita credit, (3) credit-deposit ratio, and (4) repayment-credit ratio. An intra-regional difference in this performance has been observed in SHGs functioning in drought-prone and non-drought-prone blocks within the backward districts. Further, applying Probit model, it is observed that the SHG can climb easily upon the performance ladder with younger and educated members, greater percentage of members above the poverty level, better utilization of credit received, and so on.

Impacts of Microfinance Strategic Management and Social Capital on Women Entrepreneurship in Rural Mexico

This chapter analyzes two types of women entrepreneurship in rural México. The first type seeks to determine the successes and failures undertaken by women at a rural business financed by a state program and the second type seeks to reflect the importance of social capital in the establishment and growth of cooperatives in Mexico, specifically the cooperative Las Chiquihuitecas, producer of cochineal insect (Dactylopius coccus Costa). The research method used in both cases was totally qualitative applying the documentary analysis and the interview in depth as an instrument for the collection of the information. It is obtained that social capital has been the key element in the formation and development of women businesses. The study concludes that the practical knowledge of the entrepreneurs and the lack of social capital in these cases are not sufficient to direct the businesses to success, and that the lack of structured knowledge and adequate scientific support for this project strongly directed towards the non-permanence on the market.

Microfinance, Micro-Entrepreneurial Activities Through Self-Help Groups, and Socio-Economic Empowerment of Women

The chapter attempts to analyze the impact of microfinance and micro-entrepreneurial activities of women through self-help groups (SHGs) on their socio-economic empowerment. Empirically applauded Logit model has been employed for analyzing the socio-economic impacts using primary data collected from a primary survey conducted in selected rural blocks of Burdwan district of West Bengal, India. Participation of women in the household decision-making process and income and employment generation activities are found to be significant factors in this regard. Finally, the study suggests that training of SHGs to non-members, increase in loan amount from banks, and effective utilization of that loan promote women's empowerment as well as employment.

Microfinance and Entrepreneurship in Nigeria

Microfinance banks were established to provide diversified, affordable, and dependable financial services to the active poor that would enable them to undertake and develop long-term, sustainable entrepreneurial activities to create employment opportunities, increase their productivity, and thereby increase household's income and standard of living. This chapter employed ordinary least square and vector error correction estimation techniques to establish the contribution and long-run relationship of microfinance to entrepreneurship development in Nigeria for the period 1992-2015. The result shows that a positive significant relationship exists between microfinance gross loan portfolio, total deposit liability, and entrepreneurship proxied by number of newly registered business, while a negative significant relationship exists between microfinance bank asset and entrepreneurship. This therefore suggests that availability of loanable funds for micro and small-scale enterprises provided significant support for entrepreneurship development in Nigeria. The result also shows that a long-run relationship exists between microfinance variables and entrepreneurship in Nigeria. The study therefore recommends that microfinance banks should improve on the quality of their asset by reducing non-performing loans.

Women Entrepreneurship in MENA and Europe

Women entrepreneurs greatly benefit from the development of economies on both the local and national level. They employ themselves as well as people in the community. Today, microcredit, as part of the microfinance system, has become one of the most successful economic development tools for aid agencies and non-governmental organizations all over the world. Within this framework, this chapter discusses 1) the importance of women to economic development; 2) the significance of microfinance practices for women's empowerment; and 3) the specific influence of microcredit on women's empowerment in Asian and European countries, as determined by spatial econometric analysis with respect to different microfinance variables for the MENA (Middle East and North Africa) and European zones. Using data from 1990-2016, and employing panel spatial econometric models to analyze the changes in women's empowerment over the years, the study has observed that the microfinance indicators are statistically and economically effective in promoting women empowerment in both MENA and European regions.

Determinants of Participation and Impact of Microfinance

The objective of the chapter is to analyze the determinants of participation and impact of microfinance on income, empowerment, and efficiency. The study is based on primary data based on the field survey conducted in Baripada block and Betanati of Mayurbhanj District of Odisha, India. For this study, a total of 400 households were covered, out of which 300 are participants and 100 are non-participants. Four participants are selected from each self-help group. The Functional Efficiency Index, Economic Empowerment Index, activity level correlates of functional efficiency and economic empowerment have been calculated. The study found that 28% of the total groups have a low level of functional efficiency while 42% of the groups have attained moderate level of functional efficiency and 30% of the groups have managed to reach a high level of functional efficiency. The result suggests that land holding, education, and participation are positively related to household income. The poorest section of the society, those who need at most attention, are not participating significantly in the program.

Role of Microfinance Institutions in Development of India

The role and contribution of microfinance institutions (MFIs) is very important in development. Microfinance is a very important source of financial services for people and microenterprises that do not have easy access to banking and related services. The objective of this chapter is to assess empirically the impact of MFIs on development of India. This study aims to fill a gap in econometric assessments of microfinance institutions. Using data of MFIs operating in India and using savings of client as proxy for development, this chapter found empirical evidence for significant positive impact of microfinance institutions on development. While development in rural regions generally lags behind urban areas, this chapter found no statistical evidence for differences in the marginal impact of microfinance institutions subject to geographical positions. It can therefore be concluded that impact of MFIs on development in rural areas is positive and independent of environment.

Evaluating the Effects of Economic Imbalances on Gold Price in Turkey With MARS Method and Discussions on Microfinance

Gold is not only an ornament but also used for an alternative financial instrument of microfinance in emerging economies. The purpose of this chapter is to determine the effects of economic imbalances on gold prices in Turkey as a case of emerging economies. Using the monthly data of eight relevant variables for the periods between 1995:7 and 2016:5, a new model is created by using MARS (multivariate adaptive regression splines) method in order to achieve this objective. The results show a negative relationship between gold prices with interest rate of TL and USD and increase in USD currency. The main results demonstrate that investors need the microfinance and the individual suppliers of finance could prefer gold for the financial investment or index their financial sources obtained from the individual investor according to the changes of gold prices. Furthermore, it also concludes that high inflation rates lead to increase in gold prices and mostly affect the microfinance possibilities.

Impact of Microfinance on Investment Decision and Consumption Smoothing

Microfinance has emerged as a powerful tool for poverty alleviation in developing countries. The main objective of microfinance is to provide a cost-effective mechanism for providing financial service to the poor. This chapter attempts to highlight the effect of credit constraints on the productive investment decision of poor households and scope of microfinance in this respect. This chapter promotes the role of microfinance services in consumption smoothing and thus highlights the effect on investment decision of rural poor farming households. As an insured household is motivated to allocate a greater part of its resources away from consumption and saving in favor of investments, this chapter emphasizes the importance of insurance service in product basket of microfinance services.