The Impact of Microfinance: Helping to Improve Donor Effectiveness in Microfinance

Shivaprasad G.
Journal article Economic Affairs • June 2018 India

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(English, 14 pages)

Abstract

Microfinance as a financial tool has also seen ups and downs. During 2011, market commentators predicted the end of India’s microfinance market but as on 31 March 2014, there were more than 74.30 lakh savings-linked SHGs, covering over 9.7 crore poor households. The total savings of these SHGs with banks amounted to ` 9897.42 crore. The number of credit-linked SHGs under the programme was 41.97 lakh. In 2011, the government of the state of Andhra Pradesh was seeking to prohibit the microloans business. After the crisis, RBI has handled the sector very vigilantly, carefully and very thoughtfully. The National Bank continued to provide 100 per cent refinance assistance to banks for financing SHGs. The SHG–Bank Linkage Programme (SHG–BLP) has expanded substantially since it was first launched on a pilot scale in 1992. The geographical spread of the movement has also been quite impressive from an essentially Andhra Pradesh – Karnataka phenomenon in the beginning now spreading to even the most remote corners of India. This paper tries to address impact of microfinance on women self help group members in comparison with non-beneficiaries of the microfinance schemes. Study found that the impact of microfinance on rural women economic condition is positive and microfinance is reforming their life.

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Economic Affairs

Economic Affairs, Quarterly Journal of Economics, is a Peer-Review publication based on multi-dis... see more