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Semantic differential scale was used to understand the degree of satisfaction of below
poverty line people regarding various sources of finance.
INTRODUCTION
DEFINITIONS AND KEY CONCEPTS
Microfinance:
SHGS
SHGs are a small group of rural poor , who have voluntarily come forward to form a
group improvement of the social and economic status of the members.
1. Overcoming the resistance from husband and other members of the family
To join the SHG;
7. More mobile, can move out of the house and the village more frequently;
8. Talking to the male persons in their village, which they were not confident to
Do before because of cultural reasons;
MICRO CREDIT
MANAGEMENT QUESTION
Researcher has analyzed and found the steps that poverty still exists due to:
1) Population growth is more
2) Standard of living is low
RESEARCH QUESTION
In the light of problem, background leads to the following problem statement, which will
also be the overarching question/statement for this investigation:
What is the impact of micro finance on living standards, Empowerment and poverty
alleviation of the poor people in rural India?
HYPOTHESIS
Null hypothesis: Micro finance and SHGs are beneficial to rural India.
Alternative Hypothesis: Micro finance and SHGs are not beneficial to rural
India.
REVIEW OF LITERATURE
Evans, T. G., A. M. Adams, et al. (1999) Micro credit schemes are a means of poverty
alleviation, their accessibility to the poorest is of obvious concern. This paper examines a
targeted micro credit program in Bangladesh to assess its coverage among the poor, and
to identify program- and client- related barriers impeding participation. A population
survey of over 24,000 households reveals that although three-quarters are eligible for
micro credit, less than one-quarter participate. Rates of participation in micro credit are
higher among poorer households. Multivariate analysis identifies lack of female
education, small household size and landlessness as risk factors for nonparticipation,
based on a 7% random sample of this population. The implications of these findings for
poverty alleviation policies and programs are discussed.
McIntosh, C., A. de Janvry, et al. (2005) the data from Uganda's largest incumbent
microfinance institution to analyze the impact of entry by competing lenders on client
behavior. We observe that rising competition does not lead to an increase in client
dropout rate, but induces a decline in repayment performance and savings deposited with
the incumbent, suggesting rising multiple loan-taking by clients. This joint effect on
dropout and repayment is consistent with some negative information about clients and is
being shared across lenders. However, the observed decline in repayment rates in a
context of raising multiple loan-taking shows that information sharing about clients is far
from complete.
Tsai, K. S. (2004) Banking authorities in both China and India have attempted to limit
most forms of informal finance by regulating them, banning them, and allowing certain
types of microfinance institutions. The latter policy aims to increase the availability of
credit to low-income entrepreneurs and eliminate their reliance on usurious financing.
Nonetheless, the intended clients of microfinance continue to draw on informal finance
in both rural China and India. This article argues that the persistence of informal finance
may be traced to four complementary reasons-the limited supply of formal credit, limits
in state capacity to implement its policies, the political and economic segmentation of
local markets, and the institutional weaknesses of many microfinance programs.
Patten, R. H., J. K. Rosengard, et al. (2001) The Bank Rakyat Indonesia (BRI) unit
system is recognized as one of the largest and most successful microfinance institutions
in the world. Indonesia has been more drastically affected by the East Asian monetary
crisis than other countries in the area. It is therefore worthwhile looking at the BRI
experience during the crisis-not only the experience in micro enterprise credit, but also in
small, medium and corporate credit and in savings mobilization. The comparative
performance of different parts of BRI during the East Asian crisis suggests essential
Features in the future design of sustainable microfinance institutions, products, and
delivery systems.
Snow, D. R. and T. F. Buss (2001) Micro credit is a concept that has gained
widespread acceptance by international development agencies and major donors. It is
viewed as a may to correct both governmental and market failure in Sub-Saharan Africa.
Many view micro credit as a method for linking the formal and informal sectors of
African economies to increase the reach of the formal sector. Extending the reach of the
formal economy through micro credit is possible, and desirable, depending on
macroeconomic reforms, respect for traditional financing relationships, and local control
of institutions. However, very little has been done to determine the extent to which micro
credit programs actually increase economic well-being. The model program, Grameen
Bank of Bangladesh, has been studied and evaluated, but replications may not be
inherently successful. The literature accepts that micro credit will increase economic
well-being, if programs are correctly designed. Program design issues cannot be
resolved, however, until economic well-being is measured and associated with specific
designs
Bhatt, N. and S. Y. Tang (2001) Three major controversies in the microfinance field:
vehicles, technologies, and performance assessments for financial service delivery. Then
it proposes that these controversies be resolved by a perspective emphasizing
institutional plurality and external and internal efficiencies for individual programs.
Questions for further research are discussed in the conclusion.
Buckley, G. (1997) Micro enterprises in the informal sector in Kenya, Malawi and
Ghana. It seeks to provoke critical reflection on the uncritical enthusiasm that lies behind
much proselytizing of microfinance for informal sector micro enterprise. It questions
whether the extensive donor interest in micro enterprise finance really addresses the
problems of micro entrepreneurs or whether it offers the illusion of a quick fix. It
suggests that the real problems are more profound and cannot be tackled solely by capital
injections but require fundamental structural changes of the socioeconomic conditions
that define informal sector activity and a fuller understanding of the ''psyche'' of informal
sector entrepreneurs
As it has often been repeated in this project, the sample size of the study is 100.
QUESTIONNAIR DESIGN
Data Collection.
Sources of Data
1. Primary Data Source
2. Secondary Data Source
A both primary and secondary data source has been used for data collection.
Primary Data Source-The major source of data will be the “Primary source”
Secondary source – Secondary data will be collected from different journal and
reports on Micro Finance Activities.
Data Analyzed: Data will be analyzed through survey which is going to be held in
some part of Doaba Region of Punjab.
Report Writing:
7 6 5 4 3 2 1
Money Lender
7 6 5 4 3 2 1
Not Exploitative
7 6 5 4 3 2 1
Exploitative
Courteous
7 6 5 4 3 2 1
Not Courteous
Efficient
Co-op credit
Societies 7 6 5 4 3 2 1
Inefficient
Timely Not Timely
7 6 5 4 3 2 1
Easy (to get)
Difficult (to get)
7 6 5 4 3 2 1
Not Exploitative
7 6 5 4 3 2 1
Exploitative
Courteous
7 6 5 4 3 2 1
Not Courteous
Efficient
7 6 5 4 3 2 1 PEERS
Inefficient
G-Graph
G-Graph
G-Graph
Correlations
Correlations
age income
N 100 64
N 64 64
Count
Preference
factors 31 0 0 0 0 31
I.F 0 18 6 15 1 40
L.I.R 0 2 2 20 0 24
P&S OF L 0 2 0 3 0 5
Total 31 22 8 38 1 100
LIMITATIONS OF THE STUDY
There are number of limitations in this study. Firstly, the respondents were limited (150
respondents or samples) in terms of size and composition. Secondly, the data collection
was restricted only within the areas nearby the Calendar city which may fail to represent
the actual scenario of the whole country. While fill the questionnaire the people, we have
faced problems in explaining the questions as most of the people, who are involved in
microfinance program, are illiterate and living in villages. Therefore, it was too difficult
to make them understand some of the technical terms: like capital, income etc.
Finally, the accuracy of the analysis heavily relied on the data provided by the people
involved in microfinance in rural areas of India.
CONCLUSION
At last we can conclude that Micro Finance and Self Help Groups are beneficial to rural
India because in current time micro finance and SHGs are taking many steps to get rid off
the poverty and unemployment. Due to it we find out that in this developing world still
there is the big problems like poverty and unemployment. We found that how micro
finance and self help groups help the rural areas. The main impact of these on rural areas
is that people who are living in rural areas now know about the main things related to
micro finance.
SHGs help the women in the field of women empowerment. SHGs providing platforms
for poor women to discuss and resolve their problem.
REFERENCES & BIBLIOGRAFY
Articles
• http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1127009
• http://preprodpapers.ssrn.com/sol3/papers.cfm?
abstract_id=770387&rec=1&srcabs=912771
• http://www.csa.com/discoveryguides/microfinance/abstracts-
f.php
• http://www.highbeam.com/doc/1G1-80116989.html
• http://www3.interscience.wiley.com/journal/107641991/abstrac
t
• http://www3.interscience.wiley.com/journal/107641986/abstrac
t
• http://ssrn.com/abstract=241691
• http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?
per_id=20392
Web
• http://www.planetd.org/2010/01/18/literature-review-impact-
microfinance/
• http://www.lacea.org/meeting2000/FernandoAportela.pdf
• http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1127009
• http://econ-www.mit.edu/files/530
• http://www.dartmouth.edu/~jzinman/Papers/expandingaccess_
manila_jul09.pdf
• http://www.povertyactionlab.com/papers/101_Duflo_Microfina
nce_Miracle.pdf
• http://www.econ.ucla.edu/pdupas/SavingsConstraints.pdf
• http://preprodpapers.ssrn.com/sol3/papers.cfm?
abstract_id=770387&rec=1&srcabs=912771
Journals:
• Weber, H. (2004). "The 'new economy' and social risk: banking on the
poor?" Review of International Political Economy 11(2): 356-386.
Name: __________________________________
Age (in years): ____________________________
Gender: _________________________________
Educational Profile: ________________________
Monthly Income (in Rupees): _________________
Nor bad
WORST
BEST
10 20 30 40 50 60 70 80 90 100
6) According to you which factors are more crucial for rapid growth of Mafia’s?
a. Low interest rate
b. Availability
c. Processing & sanctioning of loan
d. Installment Factor
11) How do you anticipate the future of Microfinance; rate on the scale of 10-100?
Bad neither good Good
Nor bad
WORST
BEST
10 20 30 40 50 60 70 80 90 100
12) Do you have ever borrowed micro credit from the banks/ Mafia’s, if yes specify for
which purpose?
........................................................................................................................................
..................
........................................................................................................................................
.q .................
13) Are you aware about the Interest Rates charged by the Banks/Mafia’s for providing
Microfinance Services?
14) Are you currently availing any microfinance facilities from the bank /Mafia’s?
(a) Yes (b) No