Self Help Groups For India S Financial Inclusion

Women's lack of economic empowerment not only impedes growth and poverty reduction, but also negatively impacts education and health outcomes for children. Thus, it is extremely important to ensure that women are economically empowered. Financial inclusion may be defined as the process of ensuring access to financial services and timely and adequate credit - where needed by vulnerable groups, such as women - at an affordable cost. India's Self-help Group (SHG)-Bank Linkage Program was launched in 1992 as a flagship program by the country's National Bank for Agriculture and Rural Development. The objective is to meet the financial needs of the poor by linking SHGs with the formal credit agencies. Financial inclusion of India's women can be best ensured through SHGs. This collection contains papers that provide valuable insights into the importance and functioning of SHGs to ensure financial inclusion and hence economic empowerment of women in India.

Ensuring accessibility to credit to the poor self-employed households is a critical concern for many developing nations. Self-help groups (SHG) formed by women in the developing countries help them to access financial intermediaries and access credit for various income-generating activities. In case of India, SHGs are formed either through state-assisted SHG-Bank Linkage Programme (SBLP) or through private initiatives of micro finance institutions (MFIs) or NGOs. Under the former, the groups access formal banking directly while in case of MFIs, loan is disbursed through MFIs themselves. Rate of interest in case of loans obtained by SHGs through SBLP, therefore, depends on the rate of interest charged by the various types of formal lending agencies and is often found to be lower than the interest charges of the MFIs. It is, however, argued that transaction costs involved in a bank loan are substantial, therefore, borrowers prefer loans from the informal sector, delivered at the borrower’s doorstep. In order to examine this issue rigorously, we have tried to estimate the effective costs towards borrowing by including the transaction costs, estimated using quantitative data collected through our survey. Our results show that the transaction costs contribute only marginally to the cost of borrowing, hence, we argue (using field data) that the programme, which has many additional benefits including ensuring financial inclusion of women and empowering them, should be strengthened and expanded further.

Microfinance, as a concept, involves providing financial services, particularly small credit, fund transfer, and insurance to the unemployed, low-income group, and those who do not have easy access to the banking system. It has emerged as an active agent of financial inclusion, ensuring economic, and social upliftment of the unprivileged. Microfinance is being operated through two channels Self-help Group-Bank Linkage Programme (SBLP) and Micro-finance Institutions (MFIs). The special characteristic of SBLP is its direct connection with the clients at the grass-root level and working towards poverty reduction by providing financial support. The paper is based on a field study on SBLP undertaken for women in the Varanasi District of Uttar Pradesh, India. The increase in women’s participation in economic activities and decision-making reveals that SHGs have made an impact. SHGs have also helped them to create a common platform to participate, discuss, and find a solution of their problems. Women’s income and occupation structure under SHGs have also influenced the standard of living and empowerment level significantly.

Discusses the role of the groups in encouraging rural women to become active in village affairs and benefits for the poorest. Examines the groups' financial management and financial performance. Considers implications for Indian microfinance and the global growth of the sector.

This book presents an assessment of endeavors towards Financial Inclusion and its role in Sustainable development. An attractive feature is that it deals with almost all the contemporary issues essential for reaching UN Sustainable Development Goals. This book would be an exclusive and authentic source to the students of undergraduates, postgraduates and professional courses in Commerce and Management. This manuscript is divided into nine chapters. The book looks at various salient topics, including financial inclusion measurement, the impact of various financial inclusion indicators on development outcomes and macroeconomic volatility using aggregate data, and the effects of financial inclusion on poverty and development outcomes using microdata. Using the recently adopted Sustainable Development Goals as an overall framing of the issues, it exhibits how poor and disadvantaged women and men can be bankable if the adequate facilitation for maximizing opportunities and addressing constraints. This book attempts to cover different dimensions of Financial Inclusion towards attaining Sustainability and Circular Economy through financing instruments and investments. This book highlights different goals of UN SDG as an Initiative towards Inclusive Growth and Circular Economy, which is also influenced by Micro Finance Institutions and NBFCs. This book will be an indispensable source for the Students of PG and UG programs, Researchers and practitioners from areas of Commerce, Economics and Management and the faculty members and professionals like bankers and financial consultants. We hope this book will meet the requirement of all the categories of readers.

The poor pay more for many things but, arguably, it is the extra they pay for credit that puts the greatest strain on their budgets. This report looks beyond the rhetoric that has dominated much of the debate on high-cost credit to examine the scope for widening access to more affordable credit. The report explores what people on low incomes want from a credit source. It also analyses the constraints on lending to poor people. It looks at the scope for reducing the costs of lending and widening access to more affordable credit, and estimates the scale of demand for affordable credit. This report should be read by commercial and not-for-profit lenders, campaigners, policymakers and anyone studying or researching issues around poverty and financial exclusion.

Banking on Self-help Groups reviews the existing state of affairs in respect of the SHG (Self-help Group) movement and addresses the question of what should be the next phase of development of the SHGs. It identifies the policy gaps and opportunities that exist for the SHGs to be mainstreamed further into the formal financial system. The author examines elements of strategy and design being adopted by the National Rural Livelihoods Mission as also the potential role of NABARD in the development of SHGs in the future. The study focuses on three core issues pertaining to SHGs. These relate to (i) cost-effectiveness, (ii) sustainability, and (iii) impact, i.e., the development cost of SHGs and SHG-based institutions, the sustainability of SHG models and community institutions fostered by them, and the economic and social impact on SHG members. The book concludes with a discussion of proposals and institutional arrangements that provide the way forward for the continued and uninterrupted growth of SHGs as an agency for change in the rural sector of India.