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ISSN : 0378 4568 UGC Care Group 1 Journal
Vol. 51, No.1(II) January June 2021 174
SOCIAL EMPOWERMENT VIA MICROFINANCE
SHALINI Research scholar
Prof. BINDU ARORA Faculties of Management Studies, Gurukul Kangri Vishwavidyalaya,
Haridwar, Uttrakhand, India
ABSTRACT
The purpose of the paper is to examine the relationship between microfinance and selected
indicators of social empowerment in rural Haryana using the latest primary data. The study is based
on empirical data and information is collected through simple random sampling. The sample size is
70 rural women beneficiaries of Haryana by a pre-designed questionnaire. Secondary data collected
from government reports and websites. Data analysed through Correlation by using SPSS. The
selected indicators of social empowerment are family and social relationship. The outcome of
correlation revealed that indicators of social empowerment (i.e. respect from husband, recognition
within groups, participation in community activities, consideration of your views for household,
consideration of your views in children’s education) do not hold a significant relationship with
microcredit cycle. But the two indicators i.e. respect from parents and respect from children holds a
positive and significant relationship with microcredit cycle.
Keywords: Microfinance; Microcredit; Women; Social Empowerment; Family; Social; Relationship
INTRODUCTION
Microfinance plays an important role in poverty reduction and women empowerment. Through
microfinance, well-being is improving profoundly. Zoynul and Famida, 2013 observed that around
70% of the world’s women are poor. In developing countries like India, Men women have not equal
rights still women are dominated by men (Modi, et al.,2014). Discrimination is done within this
society. It is an evil which should be eliminated by empowering them. Now women empowerment is
the main agenda at the world level. International women empowerment day is celebrated on 8 March
and 2001 as women’s empowerment year. United Nations is focusing on development by eradicating
poverty and to empower women. For empowerment of women, our Government started several
microfinance programs such as Swarnajayanti Gram Sawrojgar Yojna, Swarnajayanti Shahri Rojgar
Yojna (NULM), Program for Advance Gender Equity, Swayamisiddha, SHG-Bank Linkage Program
etc. Microfinance institutions are also focusing on women only because women have higher saving,
investment and repayment ability than men (Cheton, 2004). As we know that women are the
backbone of the country. According to Muhammad Yunus, women have potential to convert their
skill into productive activities. Microfinance provides financial assistance to invest in income-
generating activities without collateral securities which helps in uplifting their families as well as the
countries. In microfinance programs women make a group of 10-20 female members and start saving
and internal lending activities. They borrow money from group members and consume them in
personal and productive activities. The government also provides financial assistance and training to
make them independent.
DEFINITIONS
Microfinance
Empowerment
Women
empowerment
Schreiner, 2000
Kofi Annan, 2005
“Microfinance defined as formal scheme designed to improve
the well-being of poor through better access to saving and
services loans.”
“Microfinance is an idea whose time has come.”
Mayoux, 1998
“Empowerment is also related to the process of internal
change.”
The National Policy,
2001
“Increasing the spiritual, political, social or economic strength
of women.
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ISSN : 0378 4568 UGC Care Group 1 Journal
Vol. 51, No.1(II) January June 2021 175
SOCIAL EMPOWERMENT
Social empowerment reinforces that aptitude to contribute economically and politically which in
revolve reinforces women’s status in society Social empowerment, often achieved through public
policy and education, liberates women from the mistreatment, exploitations and oppression that
inhibit women from reaching their full potential. After availing microfinance, women acquire respect
from husband & family, Recognition in groups and community which empower socially to women.
Social Transformation through Women Empowerment
Social Mobilisation- Microfinance institutions organise the poor in small groups.
Training- Provide training to those through capacity building programmes.
Finance- Provide them bank credit and government subsidy.
When women have both economic and political power they become a full member of society. With
the help of microfinance, women can get a secure place in society if they are socially empowered by
becoming educating they can get knowledge about their rights. They can be treated equally to the
man if they are socially strong.
LITERATURE REVIEW
MICROFINANCE AND WOMEN EMPOWERMENT
Dimensions of women
empowerment
Existing
Literature
Selected Indicators
Findings
1. Economic
empowerment
2. Psychological
Empowerment
Mohapatra
and Sahoo
(2009)
Rajendran and
Raya (2011)
Gangadhar
and Malyadri
(2015)
Roa and Soni
(2016)
Singh and
Kaur (2017)
Meganathan
and
Arumugam
(2012)
Kato and
Kratzer (2013)
Hansen (2015)
Rahim, Shah
1. income
2. Assets
1. savings habit
2. the income of the family
1. household economic
decision making
2. economic security
1. living standard
2. economic development
1. Contribution to
household income
2. Standard of living
1. self-confidence,
2. communication skill,
3. decision-making skill
1. self-efficacy
2. self-esteem
1. internal control
beliefs
SHG mechanism increases
the savings habit and
enhances the income of the
family.
The researcher concluded
that there is a positive
impact of microfinance on
member's income,
employment, education
achievement, Assets and
landholding as compared to
other people.
Microfinance is a powerful
tool in enhancing economic
empowerment for its
indicators like household
economic decision making
and economic security
Microfinance brought
improvement in the standard
of living and economic
development.
The respondents reported an
increased contribution to
household income and
standard of living.
They concluded that
microfinance increased self -
confidence, communication
and communication skill.
The researchers found
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ISSN : 0378 4568 UGC Care Group 1 Journal
Vol. 51, No.1(II) January June 2021 176
and Raki
(2018)
1. confidence
greater improvement in self-
efficacy and self-esteem of
women beneficiaries.
Women members of groups
reported improved internal
control belief.
There is a positive impact of
microfinance on confidence.
MICROFINANCE AND SOCIAL EMPOWERMENT
FAMILY RELATIONSHIP AND SOCIAL RELATIONSHIP
Good family and social relationship are essential for the growth of human being. Ward
(1981) observed the effect of the family relationship on the social relationship of a person thereafter
Todd (2001) observed that members had no involvement in community affairs. Kabeer (2005)
explained social relations as multi-strand and she also found an association between social relations
and financial services. Sarah (2008) observed that microfinance is failed to build a good position in
the family because of the traditional thinking of family. Samantha (2009) revealed that women have
no control over the decision to use credit which results in no empowerment of women. Reji (2009)
identified that participation in household decision making is the major indicator of empowerment. He
revealed that women feet improved participation in household and community activities. Women
reported that they felt respected in the family after joining SHGs. Arora and Arora (2012) observed
that if women contribute in household income she is respected by the husband as well as family
members but family relations are not much influenced by microfinance thereafter Kato and Kratzer
(2013) reported a significant relationship between MFIs and participation in household decision-
making of members. Alemu, Kempen, Ruben (2018) SHGs encourage women to go outside to
participate in group meetings and involvement in group activities. Rajagopal (2020) found that
government designed NHGs to improve social activities of females.
SCOPE FOR FURTHER STUDY
In this study microcredit cycle is taken as independent variable other study can be done
through micro-saving as independent variable.
RESEARCH METHODOLOGY
This study is based on empirical data. Primary data is collected by simple random sampling.
The sample is collected from 70 rural women beneficiaries of Haryana through interview schedule.
Secondary data is collected from government reports and websites. Correlation and histogram are
used to analyse the data by using SPSS. Microfinance is an independent variable which is measured
by no. of microcredit cycle and social empowerment is a dependent variable. The selected indicators
of social empowerment are family and social relationship.
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THE OBJECTIVE OF THE STUDY
To examine the relationship between microcredit cycle and social empowerment.
HYPOTHESES
H01: There is no association between microcredit cycle and family relationship.
H02: There is no association between microcredit cycle and social relationship.
ANALYSIS AND INTERPRETATION
Table 1: Correlation between microcredit cycle and respect from husband
Variables
Microcredit cycle
Respect from husband
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
** Correlation is significant at the 0.01 level (2-tailed)
* Correlation is significant at the 0.05 level (2-tailed)
Interpretation: Table 1 shows (correlation coefficient= .152 and P-value is .210) which is
insignificant. This shows a weak relationship between microcredit cycle and respect from the
husband. It is not statistically significant. So, the null hypothesis is accepted.
Table 2: Correlation between microcredit cycle and respect from parents
Variables
Microcredit cycle
Respect from Parents
Pearson Correlation
Sig. (2-tailed)
N
Pearson Correlation
Sig. (2-tailed)
N
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Vol. 51, No.1(II) January June 2021 178
** Correlation is significant at the 0.01 level (2-tailed)
* Correlation is significant at the 0.05 level (2-tailed)
Interpretation: Table 2 shows (correlation coefficient= .327 and p-value is .006) which indicates a
significant relationship between microcredit cycle and respect from parents. Also, the relationship
between microcredit cycle and respect from parents was positive. This shows that the more
microcredit cycle increases, the more respect from parents will increase positively. Therefore as p-
value is less than 0.01 we reject the null hypothesis. This shows that there is a positive and
significant relationship between microcredit cycle and respect from parents.
Table 3: Correlation between microcredit cycle and respect from children
Variables
Microcredit
cycle
Respect from Children
Microcredit cycle
Respect from
Children
Pearson Correlation
1
.401**
Sig. (2-tailed)
.001
N
Pearson Correlation
70
.401**
70
1
Sig. (2-tailed)
N
.001
70
70
** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level
(2-tailed)
Interpretation: Table 3 shows (correlation coefficient= .401 and p-value is .001) which indicates a
significant relationship between microcredit cycle and respect from children. Also, the relationship
between microcredit cycle and respect from children was positive. This shows that the more
microcredit cycle increases positively, the more respect from children will increase positively.
Therefore as p-value is less than 0.01 we reject the null hypothesis. This shows that there is a
positive and significant relationship between microcredit cycle and respect from children.
Table 4: Correlation between microcredit cycle and recognition within groups
Variables
Microcredit cycle
Recognition within
groups
Microcredit cycle
Recognition within
groups
Pearson Correlation
1
-.022
Sig. (2-tailed)
.859
N
Pearson Correlation
70
-.022
70
1
Sig. (2-tailed)
N
.859
70
70
** Correlation is significant at the 0.01 level (2-tailed)
* Correlation is significant at the 0.05 level (2-tailed)
Interpretation: Table 4 shows (correlation coefficient= -.022 and P-value is .859) which is
insignificant. This shows a weak and negative relationship between microcredit cycle and
recognition within groups. It is not statistically significant. So, the null hypothesis is accepted.
Table 5: Correlation between microcredit cycle and participation in community activities
Variables
Microcredit cycle
Participation in
community
activities
Microcredit cycle
Participation in
community
activities
Pearson Correlation
1
.209
Sig. (2-tailed)
.082
N
Pearson Correlation
70
.209
70
1
Sig. (2-tailed)
N
.082
70
70
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** Correlation is significant at the 0.01 level (2-tailed)
* Correlation is significant at the 0.05 level (2-tailed)
Interpretation: Table 5 shows (correlation coefficient= .209 and P-value is .082) which is
insignificant. This shows a weak relationship between microcredit cycle and participation in
community activities. It is not statistically significant. So, the null hypothesis is accepted.
Table 6: Correlation between microcredit cycle and consideration of your views for household
Variables
Microcredit
cycle
Consideration of your
views for household
Microcredit cycle
Consideration of
your views for
household
Pearson Correlation
1
.164
Sig. (2-tailed)
.174
N
Pearson Correlation
70
.164
70
1
Sig. (2-tailed)
N
.174
70
70
** Correlation is significant at the 0.01 level (2-tailed) * Correlation is significant at the 0.05 level
(2-tailed)
Interpretation: Table 6 shows (correlation coefficient= .164 and P-value is .174) which is
insignificant. This shows a weak relationship between microcredit cycle and consideration of your
views for the household. It is not statistically significant. So, the null hypothesis is accepted.
Table 7: Correlation between microcredit cycle and consideration of your views in children
education
Variables
Microcredit cycle
Consideration of
your views in
children education
Microcredit cycle
Consideration of
your views in
children education
Pearson Correlation
1
.187
Sig. (2-tailed)
.122
N
Pearson Correlation
70
.187
70
1
Sig. (2-tailed)
N
.122
70
70
** Correlation is significant at the 0.01 level (2-tailed)
* Correlation is significant at the 0.05 level (2-tailed)
Interpretation: Table 7 shows (correlation coefficient= .187 and P-value is .122) which is
insignificant. This shows a weak relationship between microcredit cycle and consideration of your
views in children education. It is not statistically significant. So, the null hypothesis is accepted.
FINDINGS AND CONCLUSION
The study analyzes the relationship between microcredit cycle and social empowerment of
women in rural areas. The outcome of correlation revealed that indicators of social empowerment
(i.e. respect from husband, recognition within groups, participation in community activities,
consideration of your views for household, consideration of your views in children education) do not
hold a significant relationship with microcredit cycle. But the two indicators i.e. respect from parents
and respect from children holds a positive and significant relationship with microcredit cycle. The
findings also revealed the fact that microcredit serves the purpose of providing credit to women but
less focused on indicators that lead to women empowerment. The study shows that women
beneficiaries do not have any participation in decision making in the family. From a financial
perspective too, women do not hold any control on financial resources as consistent with the findings
of (Samant et al., 2019), (Sangeetha., 2017). Although, respect from parents and respect from
children holds a positive response in the study and also it will be of great advantage to women
beneficiaries (Modi et al., 2014). Microcredit plays an immense role for empowering women but as
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ISSN : 0378 4568 UGC Care Group 1 Journal
Vol. 51, No.1(II) January June 2021 180
per the empirical findings of the current study, focusing on providing credit only does not serve the
purpose but to create awareness among women beneficiaries and making them economically
independent should be highlighted to empower women. To have a better status in society there
should be a balanced relationship between financing member beneficiaries and improvement in their
socio-economic and psychological factors for the betterment of women and society as a whole. The
study will be advantageous for government, Microfinance institutions, and banks in developing
policies for empowering women. The study will also motivate women to take part in the
development process by saving and investing money in income-generating activities
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Women empowerment through microcredit: A case study of Dinajpur
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