Impact of Micro Finance on Income Generation and Livelihood of Members of Self Help Groups – A Case Study of Mandya District, India

The traditional Indian society functioned mainly on the basis of self-help and mutual aid. However, in recent years, they have been emerging as a major strategy for the promotion of informal credit to the poor. Self-help groups are expected to make a significant contribution to poverty alleviation and empower the members in economic, social and political spheres. These programmes are also expected to become increasingly self-reliant and independent of donor funds. In rural India, there is substantial degree of feminization of poverty on account of an increase in the net population growth rate among the landless agricultural labour households (including SC/ST and other backward classes women), low level of human skills, lack of availability of wage employment opportunities and inadequacy of institutional support to create wage as well as self employment opportunities. This list includes economic factors responsible for feminization of poverty which are much stronger in operation and which function along with socio-cultural barriers and discrimination against women in economic participation. The objectives of the self-help groups are to promote strong and independent women groups who exert control over their own development and that of the community. The women would be equipped with managerial and technical skills through enhanced participation in economic activities. In this context, it is desirable to generate information and analyse to what extent these micro finance programmes have been able to reduce poverty and vulnerability by; increasing capital/asset formation at the household level, improving household and enterprise incomes, enhancing the capacity of individuals and households to manage risk, increasing enterprise activity within households, expanding employment opportunities for the poor in non-farm enterprises, empowering women and improving the accessibility of other financial services at the community level.