WOMEN EMPOWERMENT IN RURAL AREA THROUGH MICRO FINANCE

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1 WOMEN EMPOWERMENT IN RURAL AREA THROUGH MICRO FINANCE Mr. Pankaj Kumar Pal Faculty,MATS School of Business Studies I. INTRODUCTION Women Empowerment refers to increasing and improving the social, economic strength of the women, to ensure equal-right to women, and to make them enough to claim their rights, Empowerment of women is one of very important issue in developing countries. As women are integral part of society, her status and participation in decision making as well as economic activities is very low in developing countries. It is often said that India lives in its villages. According to our latest census about 70 per cent of the total population used to live in villages, and do their agricultural activities. Several years of relentless industrialization almost concentrated around the bigger cities, have not naturally changed the overall picture. The rural India is still a reality. India s overall development is not possible without the rural areas. Working women contribute to national income of the country and maintain a sustainable livelihood of the families and communities, throughout the world. As they face many socio- cultural attitude, legal barriers, lack of education and personal difficulties. Traditionally, women have been marginalized. They are rarely financially independent and often they are more vulnerable members of society. Yet they have no access to credit and other financial services. Therefore, microfinance often target women. Microfinance is a critical tool to empower women from poor household. So, particularly women can get benefit from microfinance institutions as many microfinance institutions target only women, to empower them. II. OBJECTIVE: (i) To known about the microfinance. (ii) To known the various scheme for rural women by government. (iii) To study the role of microfinance intervention in promoting women empowerment in rural India. III. ABOUT MICROFINANCE The term micro finance is of recent origin and is commonly used in addressing issues related to poverty alleviation, financial support to micro entrepreneurs, gender development etc. There is, however, no statutory definition of micro finance. The taskforce on supportitative policy and Regulatory Framework for Microfinance has defined microfinance as Provision of thrift, credit and other financial services and products of very small amounts to the poor in rural, semi-urban or urban areas for enabling them to raise their income levels and improve living standards. The term Micro literally means small. But the task force has not defined any amount. However as per Micro Credit Special Cell of the Reserve Bank Of India, the borrowal amounts upto the limit of Rs.25000/- could be considered as micro credit products and this amount could be gradually increased up to Rs.40000/- over a period of time which roughly equals to $500 a standard for South Asia as per international All Rights Reserved 409

2 The term micro finance, sometimes is used interchangeably with the term micro credit. However while micro credit refers to purveyance of loans in small quantities, the term microfinance has a broader meaning covering in its ambit other financial services like saving, insurance etc. as well. The mantra Microfinance is banking through groups. The essential features of the approach are to provide financial services through the groups of individuals, formed either in joint liability or coobligation mode. The other dimensions of the microfinance approach are: - Savings/Thrift precedes credit - Credit is linked with savings/thrift - Absence of subsidies -Group plays an important role in credit appraisal, monitoring and recovery. Basically groups can be of two types: Self Help Groups (SHGs) : The group in this case does financial intermediation on behalf of the formal institution. This is the predominant model followed in India. Grameen Groups: In this model, financial assistance is provided to the individual in a group by the formal institution on the strength of group s assurance. In other words, individual loans are provided on the strength of joint liability/co obligation. This microfinance model was initiated by Bangladesh Grameen Bank and is being used by some of the Micro Finance Institutions (MFIs) in our country. IV. SCHEME (I) Scheme for Promotion of Women Self Help Groups By NABARD A scheme for promotion and financing of Women Self Help Groups (WSHG) in association with Government of India is being implemented across 150 backward districts of the country. The list of districts is given in Annexure. The scheme is an attempt at having Self Help Promoting Institutes (SHPI) to work not merely as an SHPI for promoting and enabling credit linkage of these groups with banks, but also serving as a banking / business facilitator, tracking, monitoring these groups and also being responsible for loan repayments. The objective of the scheme is to saturate the districts with viable and self sustainable WSHGs by involving anchor NGOs / support agencies who shall promote and facilitate credit linkage of these groups with banks, provide continuous handholding support, enable their journey for livelihoods and also take responsibility for loan repayments. NABARD shall provide grant 10,000/- per SHG to these NGOs over a period of three years and also bear the cost of training and other capacity building initiatives. Some of the salient features of the scheme are as below: An anchor NGO / support agency will be selected by LDM in consultation with the DDM, NABARD and DLCC in each of the identified districts for implementation of the project. The scheme would be implemented through bank branches, having CBS facility. The identified bank branch will enter into a MoU with the identified NGO / support agency. The identified NGOs will be eligible for grant assistance upto a maximum of 10,000 per WSHG. All loans to new WSHGs promoted shall preferably be under the cash credit All Rights Reserved 410

3 NABARD will provide need based awareness and capacity development programmes for key stakeholders under the project. A Service Charge of 5% per annum on monthly average loan outstanding shall be paid by the participating bank to the respective NGOs / support agencies to meet their administrative, transaction and risk costs. Annexure List of 150 LWE affected / Backward districts identified under WSHG Sr No Name of the state Districts identified Lead Bank 1 Andhra Pradesh Adilabad State Bank of Hyderabad 2 Andhra Pradesh Anant pur Syndicate Bank 3 Andhra Pradesh East Godavari Andhra Bank 4 Andhra Pradesh Guntur Andhra Bank 5 Andhra Pradesh Karimnagar State Bank of Hyderabad 6 Andhra Pradesh Khammam State Bank of Hyderabad 7 Andhra Pradesh Kurnool Syndicate Bank 8 Andhra Pradesh Medak State Bank of India 9 Andhra Pradesh Mehboobnagar State Bank of India 10 Andhra Pradesh Nalgonda State Bank of Hyderabad 11 Andhra Pradesh Nizamabad State Bank of Hyderabad 12 Andhra Pradesh Prakasam Syndicate Bank 13 Andhra Pradesh Srikakulam Andhra Bank 14 Andhra Pradesh Visakapatnam State Bank of India 15 Andhra Pradesh Vizianagaram State Bank of India 16 Andhra Pradesh Warangal State Bank of India 17 Arunachal Pradesh Dibang Valley State Bank of India 18 Arunachal Pradesh West Siang State Bank of India 19 Assam Dhemaji United Bank of India 20 Assam Karbi Angling State Bank of India 21 Assam Kokrajhar UCO Bank 22 Assam North Cachar Hills State Bank of India 23 Bihar Arwal Punjab National Bank 24 Bihar Aurangabad Punjab National Bank 25 Bihar Bhojpur Punjab National Bank 26 Bihar East Champaran Central Bank of India 27 Bihar Gaya Punjab National All Rights Reserved 411

4 28 Bihar Jamui State Bank of India 29 Bihar Jehanabad Punjab National Bank 30 Bihar Kaimur Punjab National Bank 31 Bihar Munger UCO Bank 32 Bihar Nalanda Punjab National Bank 33 Bihar Nawada Punjab National Bank 34 Bihar Patna Punjab National Bank 35 Bihar Rohtas Punjab National Bank 36 Bihar Sitamarhi Bank of Baroda 37 Bihar Vaishali Central Bank of India 38 Bihar West Champaran Central Bank of India 39 Chattisgarh Bastar State Bank of India 40 Chattisgarh Bijapur State Bank of India 41 Chattisgarh Dantewada State Bank of India 42 Chattisgarh Jashpur State Bank of India 43 Chattisgarh Kanker State Bank of India 44 Chattisgarh Kawardha State Bank of India 45 Chattisgarh Korea (Baikunthpur) Central Bank of India 46 Chattisgarh Narayanpur State Bank of India 47 Chattisgarh Rajnand gaon Dena Bank 48 Chattisgarh Sarguja Central Bank of India 49 Dadra & Nagar Haveli Dadra Nagar Haveli Dena Bank 50 Goa North Goa State Bank of India 51 Gujarat Dahod Bank of Baroda 52 Gujarat Dangs Bank of Baroda 53 Haryana Mewat Syndicate Bank 54 Haryana Sirsa Punjab National Bank 55 Himachal Pradesh Mandi Punjab National Bank 56 Himachal Pradesh Simour UCO Bank 57 Jammu & Kashmir Doda State Bank of India 58 Jammu & Kashmir Kupwara Jammu & Kashmir Bank 59 Jammu & Kashmir Poonch Jammu & Kashmir Bank 60 Jharkhand Bokaro Bank of All Rights Reserved 412

5 61 Jharkhand Chatra Bank of India 62 Jharkhand Dhanbad Bank of India 63 Jharkhand East Singhbhum Bank of India 64 Jharkhand Garhwa State Bank of India 65 Jharkhand Girdih Bank of India 66 Jharkhand Gumla Bank of India 67 Jharkhand Hazaribagh Bank of India 68 Jharkhand Khunti Bank of India 69 Jharkhand Koderma Bank of India 70 Jharkhand Latehar State Bank of India 71 Jharkhand Lohardagga Bank of India 72 Jharkhand Palamu State Bank of India 73 Jharkhand Ramgarh Bank of India 74 Jharkhand Ranchi Bank of India 75 Jharkhand Saraikela Kharaswan Bank of India 76 Jharkhand Simgoda Bank of India 77 Jharkhand West Singhbhum Bank of India 78 Karnataka Chitra Durga Canara Bank 79 Karnataka Gulbarga State bank of India 80 Kerala Palakkad Canara Bank 81 Kerala Wynad Canara Bank 82 Madhya Pradesh Annuppur Central Bank of India 83 Madhya Pradesh Balaghat Central Bank of India 84 Madhya Pradesh Dindori Central Bank of India 85 Madhya Pradesh Mandla Central Bank of India 86 Madhya Pradesh Rewa Union Bank of India 87 Madhya Pradesh Sahadol Central Bank of India 88 Madhya Pradesh Seoni Central Bank of India 89 Madhya Pradesh Sidhi United Bank of India 90 Madhya Pradesh Umaria State Bank of India 91 Maharashtra Chandrapur Bank of India 92 Maharashtra Dhule Central Bank of India 93 Maharashtra Gadchiroli Bank of All Rights Reserved 413

6 94 Maharashtra Gondia Bank of India 95 Maharashtra Nanded State Bank of India 96 Maharashtra Nandurbar State Bank of India 97 Manipur Churachandrapur State Bank of India 98 Manipur Tamanlong United Bank of India 99 Meghalaya South Garo Hills State Bank of India 100 Meghalaya West Garo Hills State Bank of India 101 Mizoram Lawngtlai State Bank of India 102 Mizoram Lunglei State Bank of India 103 Nagaland Mon State Bank of India 104 Nagaland Tuensang State Bank of India 105 Odisha Bolangir State Bank of India 106 Odisha Deogarh State Bank of India 107 Odisha Dhenkanal UCO Bank 108 Odisha Gajapati Andhra Bank 109 Odisha Ganjam Andhra Bank 110 Odisha Jajpur State Bank of India 111 Odisha Kalahandi State Bank of India 112 Odisha Kandhamal State Bank of India 113 Odisha Keonjhar Bank of India 114 Odisha Koraput State Bank of India 115 Odisha Malkangiri State Bank of India 116 Odisha Mayurbhanj Bank of India 117 Odisha Navrangpur State Bank of India 118 Odisha Nayagarh State Bank of India 119 Odisha Nuapada State Bank of India 120 Odisha Rayagada State Bank of India 121 Odisha Sambalpur State Bank of India 122 Odisha Sonepur State Bank of India 123 Odisha Sundargarh State Bank of India 124 Punjab Hoshiarpur Punjab National All Rights Reserved 414

7 125 Rajasthan Banaswara Bank of Baroda 126 Rajasthan Barmer State Bank of Bikaner & Jaipur 127 Rajasthan Dungarpur Bank of Baroda 128 Rajasthan Jhalawar Central Bank of India 129 Sikkim Sikkim East State Bank of India 130 Sikkim Sikkim North State Bank of India 131 Tamil Nadu Nagapattinam Indian Overseas Bank 132 Tamil Nadu Nagar coil Indian Overseas Bank 133 Tripura Dhalai United Bank of India 134 Tripura West Tripura United Bank of India 135 Uttar Pradesh Balrampur Allahabad Bank 136 Uttar Pradesh Chandauli Union Bank of India 137 Uttar Pradesh Chitrakoot Allahabad Bank 138 Uttar Pradesh Jaunpur United Bank of India 139 Uttar Pradesh Kaushaumbi Bank of Baroda 140 Uttar Pradesh Mahoba Allahabad Bank 141 Uttar Pradesh Mirzapur Allahabad Bank 142 Uttar Pradesh Sonebhadra Allahabad Bank 143 Uttarakhand Chamoli State Bank of India 144 Uttarakhand Tehri Garhwal State Bank of India 145 West Bengal Bankura United Bank of India 146 West Bengal Birbhoom UCO Bank 147 West Bengal Jalpaiguri Central Bank of India 148 West Bengal Malda United Bank of India 149 West Bengal Midnapur (W) United Bank of India 150 West Bengal Purulia United Bank of India V. SCHEME BY MINISTERY of RURAL DEVELOPMENT of INDIA Empowerment of Women Active participation of any community in the development process is recognized as a tool for its empowerment. In Indian social set up, the participation of women in the development process has to be ensured through tangible measures taken at various levels for their overall development. The government has taken a conscious view to make adequate provisions in its policies and programmes, through which it is to be ensured that the women of the country are not only empowered but also become active participants in the development process in the country. Various programmes of the Ministry of Rural Development are formulated keeping in view the All Rights Reserved 415

8 perspective. Ministry of Rural Development is implementing various poverty alleviation and rural development programmes. These programmes have special components for women. Major schemes, having women's component, implemented by the Ministry include the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Swarnjayanti Gram Swarozgar Yojana (SGSY) now restructured as National Rural Livelihood Mission (Aajeevika) and the Indira Awaas Yojana (IAY). The implementation of these programmes is monitored specifically with reference to coverage of women. While the benefits of the above mentioned programmes flowing to the women can be measured in quantitative terms, for other programmes such as Pradhan Mantri Gram Sadak Yojana (PMGSY), it is not always possible to collect the segregated data reflecting the direct benefits flowing to the rural women. But this programme does have a significant impact on the living conditions of the rural women in terms of providing connectivity through the rural roads, which may enhance the opportunities for the girl child to have an access to the educational facilities. Similarly, due to better rural roads women may have easier access to the health facilities and local market which may not only increase their productivity but may also increase their awareness which goes a long way in changing the traditional social structure and resulting in improvement of the status of the rural women. Similarly, MGNREGA the programme guidelines stipulate certain provisions for creation of specific facilities at the worksites for the working women facilitating their participation in the programme. Even under the programmes where direct benefits are earmarked for the women, the actual flow of benefits may be much higher as some of the indirect benefits flowing to the women through the effective implementation of programmes are not reflected in the physical progress reports being collected from the programme implementing agencies. These benefits can only be captured through the micro level or area specific impact studies by using various statistical and research tools. The brief description of the programme with specific gender provision is as under: (A) Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): MGNREGA guarantees 100 days of employment in a financial year to any rural household whose adult members are willing to do unskilled manual work. It is provided in the Act that while providing employment, priority shall be given to women in such a way that at least one third of the beneficiaries shall be women who have registered and requested for work under the Act. During the year (up to 27th Dec. 2012) total employment of crore persondays were reported to have been generated. The employment generated for women were reported as crore persondays which is 53.34% of total employment generated under this Programme. To increase participation rates of women workers in MGNREGA, the Ministry has suggested that individual bank/post office accounts must compulsorily be opened in the name of all women MGNREGA workers and their wages directly credited to their own account for the number of days worked by them. This Ministry has also advised the States: To identify widowed women, deserted women and destitute women who qualify as a household under the Act, to ensure that they are provided 100 days of work. To ensure that pregnant women and lactating mothers (at least up to 8 months before delivery and 10 months after delivery) are given works which require less effort and are close to their houses. To conduct time and motion studies to formulate gender, age, level of disability, terrain and climate sensitive Schedule of Rates (SoRs) and to ensure accurate capturing of work done by women at worksites. To ensure that at least 50% of the worksite supervisors (mates) at all worksites are women. To ensure that worksite facilities such as crèches, drinking water, shade etc. are provided through convergence with Women and Child Development Schemes like All Rights Reserved 416

9 To encourage participation of women groups, including Self Help Groups in awareness generation, capturing demand, planning, implementation, monitoring and maintenance of works. All these suggestions are also incorporated in MGNREGA Operational Guidelines (B)National Rural Livelihood Mission (NRLM): Self Help Group (SHG), of women in general (5-20 in difficult areas) is the primary building block of the NRLM institutional design. NRLM would promote SHGs with exclusive women membership. The SHGs and the federation of these SHGs at village and higher levels shall serve the purpose of providing women members space for self-help, mutual cooperation and collective action for social and economic development. NRLM is working with groups of exclusive women membership because it recognizes that women are marginalized in the economy, in polity and in society. Thus, building and sustaining institutions of poor women at various levels would give them social, economic and political empowerment and thereby bring significant qualitative improvement in their lives. NRLM will especially focus on women headed households, single women, women victim of trafficking, women with disability and other such vulnerable categories. The following factors define women SHGs under the NRLM: a) They are homogeneous, affinity groups of poor women, who have come together to overcome poverty. Membership is voluntary and it consists of only poor women. b) The federations shall have women representatives only from member SHGs and there are clear conditions for admission to the federation and clear norms for remaining as members. c) These are institutions truly owned by poor women, and they really experience 'ownership'. d) They have long term objectives. At least 10 years of continuous and nurturing support is required for a poor woman to come out of abject poverty and stay out of poverty. Hence SHGs and their federations need to function for a long period of time to achieve their objectives. e) The SHGs need to access at least 4-5 repeat doses of finance (at affordable rates), over a period of at least 6-8 years to build a portfolio of livelihoods. f) (vi)the SHGs and their federations shall play an active role in taking up social issues affecting their members - issues of domestic violence, alcoholism, girl child marriages, etc. This is one of the hallmarks of a genuine self help movement. g) The SHGs and village level federations shall work closely with the Gram Panchayat - to access entitlements of the Government for their members and also to lend constructive support to the efforts of the Gram Panchayats for public good. It is envisioned that by creating such institutions of poor women, NRLM shall facilitate women to assert their rights for inclusion in the economy, for accessing resources, for addressing powerlessness and exclusion, for enabling participation and most significantly for realizing equity. An important component of NRLM is the Mahila Kisan Sashaktikaran Pariyojana (MKSP) which aims at supporting women farmers. Primarily, MKSP aims to recognize women farmers, a hitherto unrecognized category, even though most of the farming activities are almost exclusively handled by the women. MKSP also, inter alia, seeks to reduce drudgery for women farmers. During the year (upto ) out of 5,69,912 swarojgaris assisted, 4,77,944 swarojgaris (83.86%) were women. (C) Indira Awaas Yojana (IAY): IAY aims at providing assistance for the construction of houses to the people Below the Poverty Line in rural areas. Under the Scheme, priority is extended to widows and unmarried women. It is stipulated All Rights Reserved 417

10 IAY houses are to be allotted in the name of women members of the household or, alternatively, in the joint names of husband and wife. The total number of Dwelling Units sanctioned during the period (upto 22nd November, 2012) was out of which (60%) houses were sanctioned in the name of women and (25.36%) houses were sanctioned jointly in the name of husband and wife. SHG Savings with Banks as on 31st March Loans Disbursed to SHGs during the year VI. STATUS OF MICROFINANCE IN INDIA: (Numbers in lakh/amount in crore) Year Year Year No.of SHGs Amount N.of SHGs Amount No.of SHGs Amount Total SHG Women SHG Percentage of Women Groups No. of SHGs extended loans Women SHG Percentage of Women Groups VII. PROBLEM AND CHALLENGES a) Lack of knowledge of the market and potential profitability. b) High interest rates. c) Lack of adequate training. d) Credit policy: many customers cannot pay cash; on the other hand, suppliers are very harsh towards women e) Employment of too many relatives which increases social pressure to share benefits. f) Intra house hold relation. VIII. SUGGESTIONS a) Educate rural women. b) Proper Interest Rates should be charge. c) Adequate training program should be run and make sure of the availability of such training to maximum rural women. d) Family members should support to their women members. REFERENCES: Ministry of Rural Devlopment (Govt. Of India) 3. All Rights Reserved 418