Transcript RRPG5 – MM Goel

•
•
By
Professor (Dr.) M .M. Goel
Dr. Virander Pal Goyal
Introduction
 Sustainable Rural Development (SRD) means desired
changes in all components of rural life i.e., social,
economical, technological, natural and political.
 Microfinance play a significant role in rural development
by providing financial services such as microcredit, micro
savings and micro insurance to the rural poor through Self
Help Groups.
What is Self Help Group(SHG)?
 Group of 10-20 rural poor from a homogeneous class
 Volunteer themselves for addressing their common financial




problems
Agree to pool savings in a common fund known as ‘Group
Corpus’
Make small interest bearing loans to members on rotational
basis
Group Corpus supplemented with ‘Revolving Fund’ sanctioned
as cash credit limit by the banks
Group could also have access to credit under the SHG- Bank
Linkage program of NABARD
Objectives of the Study
Objectives of our study are:
1. To analyze the socio-economic impact of Microfinance on the
members of the Self Help Groups
2.To analyze the economic activities which have been undertaken
by the members of the Self Help Groups
3. To assess the sustainability of the income of the members and
their standard of living after micro credit
4. To analyze the impact on the empowerment of the rural women
and their self dependency
In light of the above four objectives, the basic research
question of our study is:
‘What is the impact of Microfinance on the sustainable rural
development and poverty alleviation in the State of Haryana?’
Methodology and Sample Design
 Based on Primary data
 State divided into two major climatic zones i.e. Eastern Zone
and Western Zone representing Ambala and Hisar divisions
 Two districts from each agro climatic zones selected randomly
for the study
 Multi stage random sampling method used for selection of the
blocks, villages and ultimate sample of the SHGs
Techniques of Analysis
 Analysis of Variance (One-Way ANOVA)
F = Estimate of population variance based on between samples Variance
Estimate of population variance based on within samples Variance
 Paired comparison T-test (Representative samples)
 Chi- Square Test
 Multiple Regression Analysis
Y = a + b1X1 + b2X2 + b3X3 + ---------- b n X n
 Comparing before and after situations (i.e., Pre-post technique)
 Statistical analysis has been done by using SPSS 16.0 package.
Impact Assessment
IMPACT = SATISFN + OBMICR + QLIFE + ASTIMPCT +
ESTEEM + WEMP
Where SATISFN stands for overall satisfaction from the scheme,
OBMICR stands for objectives of microfinance, QLIFE stands
for quality of life, ASTIMPCT stands for increase in number of
assets, ESTEEM stands for confidence level and self respect
and WEMP stands for women empowerment.
Findings

Increase in the number of loan takers, amount of loan
taken, income and number of assets owned by members

Improvement in the standard of housing

Increase in the level of annual income and savings
Findings

Results of Regression Analysis show maximum impact
contribution from size of SHG and improvement in group
performance with age of the group.

Amount of bank loan and education level of members also
found to contribute significantly
Findings

Results of overall impact due to different socio-economic variables
show- Caste and family type has overall impact significant at 1 %
significance level
- Age and education level has overall impact significant at 5 %
significance level
- Training and occupation has insignificant overall impact

Income of the members has increased significantly after availing
microfinance. The mean value of INCJOIN comes out to be 1.246
and the mean value of INCLOAN comes out to be 1.725. The
difference of means is -0.4795 and t-value is -13.79.
Policy Implications





There is a strong case of financing for Group Housing for the
members of SHGs in the rural areas to solve the problem of housing
Introducing saving and investment schemes at higher interest rates to
motivate the members for saving and investment to help in increasing
Marginal Propensity to Save (MPS) and Marginal Propensity to Invest
(MPI) of the members
Introduce micro insurance products and bring together various players
in the insurance sector for supporting composite insurance products
which could cater for life, health, crop, assets and accidents
Older SHGs should be given more support in the form of training,
marketing and infrastructure development so as to make them stand
successful. Younger age members should also be given opportunities
while forming SHGs
Less educated members particularly the women feel more empowered
after availing microfinance, they need to be taken on priority so that
the objective of empowerment and social justice can be achieved
Policy Implications
 It is found that number of members in a Self Help Group was
10-12 in majority of the groups whereas the ideal number is
found to be 5
 Instead of providing subsidies, loans at zero rate of interest
should be provided to the beneficiaries on the basis of
“Islamic Banking Model” and the financing bank may be
compensated with this subsidy amount
 Diversification of economic activities from primary to
secondary/ tertiary sectors particularly the manufacturing
sector.
 Economic activities such as waste management, bio-gas,
distribution of electricity, recycling the garbage, harvesting
of rain water should be encouraged to achieve the objective
of Sustainable Rural Development.
Policy Implications
 ‘Group Approach’ rather than ‘Individual Approach’ is found to
be more effective
 Result oriented’ ’ rather than ‘Target Oriented’ Approach
should be adopted
Conclusion
There is a strong case for credit under rural group housing
scheme. Loans for education and non-farm activities at low
rates of interest instead of subsidies can help in achieving
better results. It will help in making microfinance under SHGs
a success story for achieving Sustainable Rural Development.
Thank You