IMPACT of VARIOUS FORMS of MICRO FINANCING on WOMEN N. Manimekalai Bharathidasan University Tiruchirappalli Tamil Nadu Submitted
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IMPACT OF VARIOUS FORMS OF MICRO FINANCING ON WOMEN N. Manimekalai Department of Economics Bharathidasan University Tiruchirappalli Tamil Nadu Submitted to Department of Women and Child Development Ministry of Human Resource Development Government of India 2004 1 Preface This study on “Impact of Micro Financing on Women”, sponsored by Department of Women and Child Development, Ministry of Human Resource Development, Government of India, has been carried out in Tiruchirapalli district of Tamil Nadu, taking 110 SHG women from 90 SHGs. These SHG women were drawn from five different models namely NGO Facilitated, where the NGO acts as a linking agency in getting the loan from the bank, NGO intermediated in which the NGO acts as a financial intermediary, Directly Bank Linked, where the banks themselves forms SHGs, NGO guided but self – supported in which the NGO will be guiding in forming the group but will not entertain in either arranging for finance nor linking with banks. The fifth model is completely self-supported which has been formed and functioning independently without getting any assistance from outside agencies. The purpose of the research was to examine the model wise performance of SHGs in terms of access to credit, outreach, institutionalizing the credit, reducing the transaction costs, socio-economic impact created, the behavioral outcomes and empowerment of women in decision making affairs of family and society etc. At attempt has been made to understand the inter-relations among the SHG women, NGOs, banks and other development organizations, and their impact on the lives of women. All these have been done as to which model would sustain and would have long run stability and their implications on formal credit sector. The research project of this magnitude and complexity which really require, the methodology of descriptive, exploratory, survey, observation, and case study techniques would not have been accomplished without the help and co- operation of several individuals and of course the dedicated work of the Field Investigators. I would like record my special thanks and appreciation to officials at all levels in the Mahalir Thittam, Tamil Nadu Women Development Corporation, District Rural Development Agency, Lead Bank, National Co- operative Union, Sample NGOs, etc for not only providing access to data but also spared time in discussing various issues related to SHGs and micro financing. I 2 would like to thank the project officer Mr. Jaganathan, APOs of Mahalir Thittam the present PO, Lead bank Many Mr. Ramadoss, DR DA PO, Mr. Monoharan, VAO, Director of SEVAI, Mr.Govintharaj, Mr. Elangovan, Gramodhaya, Mr. Rex, New Life, RGC, Sherif PDF, Mr. I. Ambalavanan and CSI Project Director and Jayashree, Project Officer of Women Development Lalgudi, National Co- operative Union, Ms. Senthamarai and Anbalagan of Anbil, Trichy District Co- operative Society. I am extremely thankful and place on record my deep sense of gratitude to the field investigators consisting of Ms. N.Geetha, K.Kalaichandran, A, Sankaran and A.Balasubramanium for their excellent field work. I owe a great deal for their painstaking and meticulous effort in carrying out the ardous takes of locating the respondents and interviewing several SHG women with dedication. I have benefited from discussion with the Professor and Head of the Department of Economics Dr. V.B Athreya, my guide and Professor of Economics and at present the Vice Chancellor of Bharathidasan University, Dr. C.Thangamuthu and my Colleagues, Dr. S.Iyyampillai and Dr. M.Ravichandran at various stages in completing this study. I owe a lot for all their support and suggestions, criticisms in conducting this work. I also express my sincere thanks to the University officials specially Registrar of Bharathidasan University for his encouragement and timely sanction of financial advances which enabled to complete the work in time. N. MANIMEKALAI 3 Contents Preface List of Tables Executive Summary Chapter I Introduction 1 Chapter II Concepts and Review of Literature 17 Chapter III Micro Finance through SHGs-An Overview 49 Chapter IV Profile of the Study Area and Sample NGOs 60 Chapter V Analysis and Discussion 84 Chapter VI Summary of Findings and Conclusion 165 Annexures Bibliography 4 List of Tables Table 4.1 Distribution of Blocks as per their Backwardness Table 4.2 Cropping Pattern in Tiruchirapalli District Table 4.3 Horticulture Crops Cultivated in Tiruchirapalli District Table 4.4 Distribution of Livestock in Tiruchirapalli District Table 4.5 Distribution of Small and Tiny Industrial Estates in Tiruchirapalli Table 4.6 Distribution of Banks in Tiruchirapalli District Table 5.1 Regional Speard of SHGs in India Financed by Banks [Rs. In Million] Table 5.2 SHG – Bank Linkage-Highlights in India (March 2000 to March 2002 Table 5.3 SHG BANK Linkages –Physical & Financial Progress of Commercial Banks Table 5.4 Expendable Fund Support for Credit Delivery Innovations Details [ Rs] Table 5.5 District-wise performance of SHGs in Tamil Nadu by NABARD Table 5.6 SHG Through Co-operative Banks Upto 31st March 2002 [Rs. Million] Table 5.7 SHG-Bank Linkage-Physical & Financial Progress of Participating RRBs Table 5.8 Block-wise distribution of female population, SC/ST population and the percentage of SHGs to female and SC/ST population in Tiruchirapalli. Table 5.9 District-wise Rural-Urban SHGs of Mahalir Thittam in Tamil Nadu Table 5.10 NGO-wise SHG formed & the per capita savings in Tiruchirapalli 5 Table 5.11 Model-wise Distribution of sample SHGs in Tiruchirapalli Table 5.12 Model wise distribution of the Sample Respondents by Community Table 5.13 Model-wise distribution of the Respondents by Occupation Table 5.14 Model-wise Distribution of Sample respondents by Education Table 5.15 Model-wise Distribution of Sample respondents by Age of the Members Table 5-16 Model wise Distribution of Sample respondents by Marital Status Table 5-17 Model-wise Distribution of Sample households by Nature of Family Table 5.18 Model-wise Distribution of Sample households by Family size Table: 5.19 Model-wise Distribution of Sample Households by Income [in Rs] Table 5.20 Age-wise Distribution of the Sample Households by Income Table 5.21 Model-wise Distribution of Sample households by No. of earning Members Table 5.22 Model-wise Distribution of Sample households by Region of Origin Table 5.23 Model-wise Distribution of Sample households by Contribution of Income by Husband Table 5.24 Model-wise Distribution of Sample households by nature of support to household activities by Husband/ other members of the family Table 5.25 Factors influenced to join SHG in a particular group Table 5.26 Model-wise distribution of sample respondents by Choice of group decided Table 5.27 Distribution of the SHGs by Age Table 5.28 Model-wise distributions of sample households by number members in the group Table 5.29 Model-wise distribution of sample respondents by the position in group at the start up. Table 5.30 Model-wise distributions of sample households by nature of position at present. Table 5.31 Distribution of the Respondents by nature of entry into SHG Table 5.32 Model-wise distributions of sample respondents by savings. Table 5.33 Model-wise distributions of sample SHGs by subscription amount Table 5.34 Age-wise distribution of sample SHGs by revision in group saving Table 5.35 Model-wise distribution of sample SHG s by revision in interest rate Table 5.36 Age-wise distribution of sample SHGs by revision in interest rate Table 5.37 Model-wise recovery rate of group loan Table 5.38 Age-wise distribution of sample SHGs recovery rate. 6 Table 5.39 Factors influenced to join SHG Table 5.40 Frequency of Group Meeting of the Sample SHGs Table 5.41 Model-wise distribution of sample SHGs by action taken for absence for group meeting Table 5.42 Average Percentage of Attendance Table 5.43 Percentage of members participating in meeting Table 5.44 Level of participation Table 5.45 Areas in which members participate and intervene Table 5.47 Utility of SHGs Table 5.48 Distribution of the Sample Units by their Product Line Table 5.49 Type of Activity Table 5.50 Nature of Activity Table 5.51 Distribution of the sample units into new and Traditional Categories Table 5.52 Kind of Ownership [Group or Individual Based] Table 5.53 Sources of Motivation to participate in training Table 5.54 Sources of motivation to choose this Activity Table 5.55 Mean Growth Performance of Sample Enterprises from the start up to present (in Rs). Table.5.56 Channels of market for the product Table 5.57 Sources of raw material for the product Table 5.58 Model–wise Average monthly Income during pre and post SHG periods Table 5.59 Number of SHG women who held that Consumption Expenditure Improved Table 5.60 Models-wise distribution of the average savings of the sample respondents during pre and post SHG periods Table 5.61 Model-wise Size of Asset Holdings during Pre and Post SHG situation Table 5.62 Models-wise distribution of the average borrowings of the sample respondents during pre and post SHG periods Table 5.64 Average loan and No of times the group loan Availed Table 5.65 NGO-wise Scoring and Empowerment Status – Post SHG Table 5.66 Model-wise Scoring and Empowerment Status Table 5.67 Model-wise Empowerment status in the pre and post SHG Situations Table 5.68 Average percentage of Transaction Cost of SHG and Other Micro Financing 7 Executive Summary This study has been conducted to examine the impact of the various forms of micro financing on women taking Tiruchirapalli district of Tamil Nadu as the study area.