Poverty and Inequality of SHG-Member Households

This chapter explores the penetration of SHGs and assesses socio-economic status and its inequality for the SHG-member households in North Andaman Island in the union territory Andaman and Nicobar Islands of India. The authors have used the Gini coefficients for computing inequalities and log-linear model for estimating the impact of borrowing on food and non-food expenditure. It is revealed that the incidence and intensity of poverty of the sample households is not so serious. Majority of the sample women under SHG schemes actively participate in group activities and have obtained micro credit. Inequality in household income is lower than the inequality in per capita income. Moreover, inequality for health expenditure is higher compared to the inequality in food expenditure. Borrowing through SHGs accelerates non-food expenditures not investment in income generating activities. However, SHGs inculcates empowerment of the participations.

Impact of Self-Help Group (SHG) Membership on Income and Income Inequality

The microfinance program has now been recognized as an effective tool to empower economically the rural women folk. The earning is the most important direct outcome of micro finance participation unlike acquiring empowerment. Participation in the program helps women to inculcate their saving habit. It gives access to the formal credit to them. All these have direct impact on their economic condition. This study explores the impact of microfinance program on the income of the program participants of Birbhum District in West Bengal in India. The study also focuses on how participation helps in reducing inequality in income of the participants. The major finding of the study is that women self-help group (SHG) members have the higher level of income compared to that of non-SHG members. The study also shows that SHG participation also helps them in reducing inequalities in their income. Gini coefficient and Lorenz curve technique has been used to assess the income distribution of the respondents.

The Quest for Financial Inclusion and Microfinance Institutions in India

Financial inclusion refers to providing unconditional and affordable access to financial services in an effective and efficient manner for all needy people. Microfinance institutions (MFIs) play an important role in financial inclusion and societal development. One important part of the financial inclusion strategy is to provide access to finance to those people belonging to remote and disadvantaged areas. The aim of this chapter is to study the concept of microfinance and microfinance institutions and its impact on financial inclusion in India. This study provides recommendations to grow and sustain microfinance institutions to achieve greater financial inclusion.

Reflections on Microfinance

Microfinance has become the latest buzzword in the credit markets where it shoulders the responsibility of alleviating poverty coupled with socio-economic development. Dealing with microfinance coupled with the issue of poverty reduction, the first concern is to handle the twin objectives of poverty alleviation and achievement of financial self-sufficiency, which are often at loggerheads. To begin with, the present chapter constructs a five-dimensional human poverty index (HPI) in terms of the rate of unemployment, state wise illiteracy rate, state-wise infant mortality rate, state-wise percentage of population below the poverty line, and the percentage of population not having an access to electricity for the states across India. Thus, this will serve as an index for the extent of poverty. Consequently, a fall in the value of the index actually implies poverty alleviation. This empirical model does not justify the hypothesis that “microfinance reduces poverty” at the macro level using cross-state panel data for India.

An Overview of Microfinance in India and Its Role in Financing Poor Women

Microfinance is considered as one of the most potential and successful tools which battle against poverty in the way of financing people with small financial need and helping poor women financially in less developed countries like India. It is a well-recognized notion that without upliftment of the condition of women in a society a nation cannot be developed in a competitive world. Microfinance may in fact help women to gain respect in her family and realize more self-confidence in socially defined roles. The chapter discusses the conceptual framework of microfinance growth of SHG-linked microfinance program and different types of microfinance services in India. Also, this chapter depicts how women are financially benefitted from microfinance institution through self-help groups and measured state-wise microfinance penetration index (MPI) in India. The findings of this study show that there have been favorable changes in the microfinance variables considered.

Poverty and Microfinance in Char Areas of Dhubri District in Assam

In India, 70% of population lives in rural area and 60% of population earn their livelihood from agriculture which implies a high rate of underemployment and poverty. The root cause of poverty is the low access to credit facilities. Micro finance in this respect can play a vital role in providing financial services to the poor. In India Micro finance is dominated by self-help groups (SHGs), bank linkage programs aimed at providing a cost effective mechanism for providing financial services to unreached poor to fight against poverty. The chapter, thus, aims at identifying the current status, role, and performance of microfinance in Char areas of Assam in India. The chapter is concluded with the stress that more and more number of SHGs should be encouraged to form among the poor household in the study area to avail the benefit and cross poverty line.

The Effect of Microfinance on Inequality and Household Shocks Easing in Nigeria

The chapter aims at finding the microfinance effect on households' shocks easing of Nigerians, and estimating the inequality in the use of MFIs' services under the backdrop that rural farmers do not have access to credits to boost productivity and this affects their income and widens inequality. Based upon the World Bank microdata on financial inclusion survey for 2014 (the Global Fundex survey data set), the study employed the Heckman selection model and concentration index. The results show that households in urban areas have more access to MFIs services than rural households in terms of mobile money accounts, emergency funds, and receiving remittances to smooth their consumption shocks. The results also show wide disparities in deprivation of owning accounts, in loans for apartment, in trend of saving habits, in capacity to participate in MFIs services between the rich and the poor. The study, therefore, recommends that more MFIs can be established in rural areas and more awareness campaign be carried to reach out to the targeted households.

Effect of Microfinance on Poor Peri-Urban Female-Headed Households and the Vulnerability of Women to Poverty in Ghana

This chapter analyzes the impact of microfinance on poverty, in general, and female-headed households, in particular, for Ghana. The analysis shows that there are three types of microfinance institutions in Ghana, and successive governments have identified and upheld microfinance as the means to reduce national poverty rates and close the gender gap in the country. The analysis also demonstrates that microfinance has both positive and negative impacts on poverty and female-headed households. Microfinance has contributed to narrowing the poverty gap between the female and male gender, and improving the quality of their lives. However, on its own, it is not sufficient and necessary means to poverty reduction, growth, and development. The extent to which microfinance impacts on poverty is not conclusive. This necessitates remedial measures such as regulation and monitoring, proper balance between needs of clients and commercial interest of institutions, incentives to microfinance institutions, and capacitation of the poor and institutions.

Microfinancial Collaborative Economies Business Models and Strategies for Quality of Life Improvement

The present chapter analyzes two cases of a joint venture stage to determine the successes and failures undertaken by the PROMUSAG and Uber as a model and strategies of collaborative economies to improve the quality of life. First, it is analyzed PROMUSAG as a program to finance women entrepreneurship aimed to improve the quality of life and the second case aims to analyze the different strategies taken by Uber to join the global market successfully, positioning itself in different countries. The analysis concludes that the empirical knowledge of entrepreneurs, in this case were not sufficient to direct the business 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. Taking terms as work global, it is considered Uber as a technology-based company and sees it from an overall, same strategy refers to a strategy that follows the company having a worldwide standardized product, another issue that would revise the importance of the theory of institutions.

Microfinance and Women Empowerment: An Empirical Analysis

The present chapter empirically examines the role of microfinance access on women empowerment by using primary data on women borrowers from different microfinance institutions in Nadia and Murshidabad districts of West Bengal in India. Microfinance institutions play an important role in strategies related to gender and development due to their active relationships with women empowerment and poverty alleviation. The various programmes under microfinance like self-help groups (SHGs) are promoted and inspired for their significant economic impacts on empowerment of women. We investigate the impact of microfinance access on three dimensions of women empowerment, which make influence upon decision making on the issues of credit, expenditure and children. We conduct a primary survey on about eight hundred respondents of women borrowers from different microfinance institutions and apply multivariate probit estimation. Our findings imply that the greater access to microfinance credit negatively impacts on economic empowerment i.e. decisions on credit and expenditure related issues.