Microfinance, Micro Enterprises and Self-help Groups

Microfinance, Micro Enterprises and Self-help Groups

Micro enterprises mainly deal with initiating, promoting and maintaining economic activities for the production and distribution of income and wealth. It implies recognition of values of individual liberty, innovation, risk taking and independence. In most developing countries, micro enterprises and small-scale enterprises account for the more than 90 percent in terms of employment. The role of micro-entrepreneurship in poverty alleviation and economic development in developing countries is promising. It has already been identified that micro-entrepreneurship is a major contributing factor to economic growth. The person who carries out entrepreneurial activities is an entrepreneur. He searches for change, responds to it and exploits it continuously as an opportunity in creating wealth and opportunity not only for self (themselves) but also for other sections of the society making human lives more comfortable and easier.

Gender Inequality

Mother Nature has created the universe with equal opportunity for both men and women. Generosity bestowed upon two parts of Homo sapiens speaks of her boundless benevolence, which has unfortunately been overshadowed by the supremacy of patriarchy leaving no other alternative but the practice of gender inequality in all aspects of life in the name of the stereotyped role of women in India.

Artificially construed barriers have deprived the womenfolk of knowledge and thereby leading a life of humiliation with a feeling of inferiority complex. Such injustice to a particular gender over the centuries has caused damage to proper utilization of the human resource. United Nations and Human Development Report serve as a warning to underprivileged countries to rectify the current scenario in order to synchronize between physical and human resource and to realize the benefits of economic development, especially after globalization. Women represent 46 percent of world’s population and 70 percent of world’s poor. This is self-explanatory of the harsh truth that advancement of civilization always bypassed them, instead of instilling conviction in their minds, withholding the view that right to live with dignity enshrined in “Human Rights” is a forgotten chapter for them.

Few decades back the concept of underutilization of resources was limited to only “land” which was later extended to “human resource” giving worldwide impetus to think in new horizon created by academicians engaged in “women studies” from the mid-1970s. With gradual change in the mindset of people, “women capital” is no more a foreign term in the economic dictionary. It is now widely accepted that underutilization of human resources in the form of women deprivation exposes a country’s inefficiency in utilizing resources of all forms which can be corrected by increasing investment on human resources if global challenges are to be counteracted qualitatively.

In recent times, global forum admits that poverty is being feminized because women are excluded from ongoing technological revolution. They take shelter in low paid jobs of informal sector making the sector more quantitative rather than qualitative in comparison to the formal/organized sector. Thus, women labour force is now an integral part of the informal sector. The good mingle between women and informal sector opens up new vistas to study the possibility of economic empowerment of women in the backdrop of women emancipation.

The rapid expansion of the informal sector, especially after 1991, has created confusion like “egg-hen puzzle” among policy makers as with limited fund they seem to be confused in decision making “which is to improve first”—the informal sector or women capital. It seems relevant to study the complex situation in all the cities of India, big or small, to find solution to knotty questions, so that women as tool of economic transformation are at least given chance to bring qualitative change in overall economic scenario of the country, by which they will be able to ameliorate their social status and attain gender equality—one of the cherished objectives of constitution.

Self-help Groups and Micro Credit for Women Entrepreneurs

One hundred and fifty million women are reported to be organized in about 1.4 crore Self-help Groups across the country. It was expected that working in a group, women would be able to access Government development programmes and overcome gender discriminatory practices. The original focus of organizing women into groups was to ensure they were able to access their developmental rights. The Development of Women and Children in Rural Areas (DWCRA) programme was set up as a result of lobbying. In the changing national context of neo-liberalization and privatization, the Self-help Groups have assumed new meaning.

The Self-help Groups now are organized as savings groups and take loans to implement small income generation programmes. The Government has promoted the Self-help Groups movement on a large scale. Poor women organized into small groups are now expected to support themselves and their families by accessing small loans. About 16 million poor households have gained access to formal banking systems through NABARD. 90 percent of these groups have only women members. 9.34 lakh Self-help Groups covering 1.07 crore rural women are functioning in the state of Odisha with nearly 53 percent of them covered under SHG-Bank Linkage Programme. The poor women who were once considered non-bankable, are found source of profit making by setting up their business enterprises with the help of these Self-help Groups and micro finance companies. A Survey carried out by Nirantar on 2,750 Self-help Groups in 16 states highlights the following:

  1. While Self-help Groups claim to improve livelihoods, there was little evidence to suggest that they do so. They do provide women with access to money but do not necessarily ensure women’s entitlement to the use of resources or assets.
  2. Promoters of Self-help Groups are focused on micro enterprises which usually do not pay adequate attention to non-cash resources such as the development of common properties and public services.
  3. The Self-help Groups has added a new dimension to the idea of “good women”—a woman who saves, repays regularly and pressurizes other women to repay not for her own benefit but for the welfare of the family.
  4. By making the claim that Self-help Groups are leading to empowerment and poverty alleviation the state does not hold itself accountable to ensure universal right to food, work, education and health.
Microfinance, Micro Enterprises and Self-help Groups
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