Influence Of Microfinance On Economic Empowerment Of Women

Abstract

Women have competencies of changing the society along with the world. In developing countries, women are facing evil of gender discrimination. Men and women are not equally privileged but scenario is changing now because females are being empowered but still women are suffering from gender inequality problem. Women empowerment is need of hour for development of the world. The government took initiative in form of microfinance to carry forward women in life. So, it becomes necessary to analyse influence of microfinance on women empowerment. It is based on descriptive research design with using multistage sampling technique. The sample size is 400 rural women beneficiaries of Haryana and information is collected by pre-designed questionnaire through interview Data is conducted through SPSS. Regression and correlation analysis is used to examine data through SPSS. Microfinance measured through micro-credit and micro saving. Economic empowerment selected indicators are household income and household saving. The researchers found that there is positive impact of microfinance on economic empowerment of women. This study will be fruitful for the government, microfinance institutions and banks in policies making to empower women. This study could encourage women for savings and investing activities. It might inspire women to take part in microfinance schemes

Full text

Influence Of Microfinance On Economic Empowerment Of Women
Shalini1*, Prof. Bindu Arora2, Dr. Anil Dangwal3
1. Shalini* (Research scholar), Department of Management Studies, Kanya Gurukul
campus, Gurukula Kangri (Deemed to be University) Haridwar, Uttarakhand (India)
2. Dr. Bindu Arora (Professor), Department of Management Studies, Kanya Gurukul
Campus, Gurukula Kangri (Deemed to be University) Haridwar, Uttarakhand (India)
3. Dr. Anil Dangwal (Assistant Professor), Faculty of Management Studies, Gurukula
Kangri (Deemed to be University) Haridwar, Uttarakhand (India).
*Corresponding author: shaliniarya@live.in
Abstract
Women have competencies of changing the society along with the world. In developing
countries, women are facing evil of gender discrimination. Men and women are not equally
privileged but scenario is changing now because females are being empowered but still women
are suffering from gender inequality problem. Women empowerment is need of hour for
development of the world. The government took initiative in form of microfinance to carry
forward women in life. So, it becomes necessary to analyse influence of microfinance on women
empowerment. It is based on descriptive research design with using multistage sampling
technique. The sample size is 400 rural women beneficiaries of Haryana and information is
collected by pre-designed questionnaire through interview Data is conducted through SPSS.
Regression and correlation analysis is used to examine data through SPSS. Microfinance
measured through micro-credit and micro saving. Economic empowerment selected indicators
are household income and household saving. The researchers found that there is positive impact
of microfinance on economic empowerment of women. This study will be fruitful for the
government, microfinance institutions and banks in policies making to empower women. This
study could encourage women for savings and investing activities. It might inspire women to
take part in microfinance schemes.
Keywords: Microfinance, economic, empowerment, women, household, saving, credit
Journal of University of Shanghai for Science and Technology
ISSN: 1007-6735
Volume 23, Issue 9, September - 2021
Page-1020

1. INTRODUCTION
Gender inequality is the leading challenge in the way of development of world especially in
developing countries. Development is not possible without gender equality. Men and women
have equal rights in constitution only, not in reality (Modi et al., 2014). Women are the
vulnerable part of society. Scenario is changing in modern times but total change needed if we
want to see our country in the list of developed countries. A country can’t develop without
development of women. So, gender discrimination evil can be abolished with empowering
women. Empowerment of women is the need of hour for the growth country in positive
direction. For empowerment of women, government has inaugurated several programs of
microfinance. The government is spending huge fund on these program. The government is
promoting microfinance through two models are followed Self-help group (SHG) model and
Joint Liability group (JLG) model. Self-help group is an informal group of 10-20 members and
they start saving and lending money to accomplish their requirements. The government lends
money at lower rates to groups’ members for investing in income generating activities. The
government organises orientation training program and skill development program to train
members through NGOs and banks. Second is Joint Liabilities Group model is called credit
lending model. In this model, women come near to form group of 5-10 women for borrowing
money. In this model women give guarantee of group. Obligation of group members will arise
due to default instalment. Installments are paid weekly, fortnightly and monthly basis.
Microfinance Institutions are following this model to empower women. Women should come
forward to take fuller utilization of schemes.
2. MICROFINANCE
Dr. Muhammad Yunus is the father of modern microfinance concept. In 1976, he founded
Grameen bank and started microcredit services to poor rural people without any security. Now,
microfinance is used worldwide to empower women or poor. Microfinance is a type of financial
service that included micro-credit, micro-saving, micro-insurance and training services without
any indemnity. Reserve Bank of India identified microfinance as an instrument for economic
development to achieve the goal of poverty eradication by providing financial and non-financial
services of microfinance. In addition to, Schreiner (2000) defined microfinance as an authorised
Journal of University of Shanghai for Science and Technology
ISSN: 1007-6735
Volume 23, Issue 9, September - 2021
Page-1021

system to uplift poor with saving and lending services. Further, Annan (2005) called
microfinance an idea to change lives.
3. WOMEN EMPOWERMENT
Women empowerment is a multi-dimensional process of encouraging economically, socially,
politically and psychologically to women. Women must achieve honourable position in family as
well as in society. Women empowerment is an initiative to facilitate women for raising voice
against injustice and bring them into decision making process.
Economic empowerment is the key dimension of women empowerment. United States Women
identified that investment in economic empowerment is the main way to abolished evil of gender
discrimination and poverty. CARE international defined economic empowerment as process to
increase their rights in financial resources and authority to take advantage for family, society and
themselves.
4. LITERATURE REVIEW
Cheston and Khun (2002) exposed involvement of women increased in household decision-
making because employment increased their contribution in household expenses. Further, Swain
and Wallentin (2007) revealed that members of SHGs saved money more than non-members.
Again in, Mohapatra and Sahoo (2009) identified positive impact of microfinance on income,
employment, education and resources of member as compared to non-members. Whereas,
Hussain (2012) found that BRAC diverted members to productive activities and increased their
income and expenditure of family. The researcher also observed minor effect on saving but
encouraging attitude towards saving. Further, Arora and Arora (2012) exposed that women
became able to improve their earnings level. Also, Zoynul and Famida (2013) analysd impact of
micro-credit on income and found microcredit assisted them employment and earned income. In
addition to, Kavitha and Meenakshisundaram (2013) observed increased saving habit of women.
Again, Rahman, Moajjam, Ansari (2015) observed that microfinance helped women to bring
positive change in domestic conditions. Further, Herath et al. (2015) revealed that microcredit
increased member’s level of income and decision to use fund. Whereas, Mahmood et al. (2016)
found that women spend borrowed fund on income generating activities. Women expressed
Journal of University of Shanghai for Science and Technology
ISSN: 1007-6735
Volume 23, Issue 9, September - 2021
Page-1022

increment in household income, expenditure and standard of living after getting microfinance. In
addition to, Akter and Pustika (2017) exposed that men and women have equal access of
financial resources and women have more control over household income. Further, Nagaraja
(2018) observed financial support of women in family earnings and national income. Whereas,
Naiz and Iqbal (2019) observed that there was marginal expansion in income of beneficiaries.
After them, Joshi (2019) found an enhancement in average household income of members after
joining SHGs.
5. RESEARCH METHODOLOGY
It is based on descriptive research design with using multistage sampling technique. On first step
Haryana state is selected on the basis of low sex ratio. On second step, two districts Gurugram
and Nuh selected. Gurugram is district of lowest sex ratio and Nuh with highest sex ratio in
Haryana. On third step, selected Patudi and Nuh block where maximum no. of SHGs to collect
data of 400 from women members of SHGs. Processed data is collected from NRLM website,
NABARD’s report and published journals. Regression and correlation analysis is used to
examine data through SPSS.
6. OBJECTIVES OF THE STUDY
1. To analyse the influence of micro-credit and micro-saving on household income.
2. To analyse the influence of microcredit and micro-saving on household saving.
3. To analyse the relationship among micro-credit, micro-saving and household income.
4. To analyse the relationship among micro-credit, micro-saving and household-saving.
7. HYPOTHESES
H01: There is no significant impact of micro-credit and micro-saving on household income.
H02: There is no significant impact of micro-credit and micro-saving on household saving.
H03: There is no relationship among micro-credit, micro-saving and household income.
H04: There is no relationship among micro-credit, micro-saving and household saving.
Journal of University of Shanghai for Science and Technology
ISSN: 1007-6735
Volume 23, Issue 9, September - 2021
Page-1023

8. RESEARCH APPROACH
The conceptual research suggests that the independent variable is microfinance and measured
through micro-credit and micro-saving. The dependent variable is economic empowerment and
selected indicators are household income and household saving.
9. CONCEPTUAL FRAMEWORK
Journal of University of Shanghai for Science and Technology
ISSN: 1007-6735
Volume 23, Issue 9, September - 2021
Page-1024

10. ANALYSIS AND INTERPETATION
Model – I: Dependent Variable – Average household income
Table 1: Correlations
Micro credit
cycle
Micro Saving
Average
Household
Income
Micro credit cycle
Pearson Correlation
1
.784**
.856**
Sig. (2-tailed)
.000
.000
Micro Saving
Pearson Correlation
1
.798**
Sig. (2-tailed)
.000
Average Household
Income
Pearson Correlation
1
Sig. (2-tailed)
.000
**. Correlation is significant at the 0.01 level (2-tailed).
Interpretation- Table-1, showing strong correlation among the Micro credit cycle, Micro
saving and average household income.
Table 2: Result of Multiple Regression Analysis – Model I
Y= Dependent variables
Average Household
Income
Intercepts
B = 19.464
t = 4.360
P = .000***
X1= Micro Credit cycle
B =1 .125
t = 2.65
P = 0.024**
X2= Micro Saving
B= 0.86
Journal of University of Shanghai for Science and Technology
ISSN: 1007-6735
Volume 23, Issue 9, September - 2021
Page-1025

t = 2.21
P= 0.035
t = 3.656
P= 0.001***
F
F=7.91
P=0.000***
R Square
0.659
Adjusted R Square
0.654
*P<0.1**P<0.05***P<0.01
Regression Equation
The estimated regression equation 2 as follows:
Y=19.464+1.125X1+0.86X2
Interpretation: Table 2 shows results of multiple regression analysis in which average
household income is dependent variable. R Square is 0.659 which explains 65.95 % variations in
Average household income and regression model is fitting with observations.
Table 2 describes p values are 0.02 for X1 and 0.001 for X2 which is less than predicted value. It
explains significant contribution of micro credit cycle and micro-saving in the model.
Model – II: Dependent Variable – Household saving
Table 3: Correlations
Micro credit
cycle
Micro Saving
Average
Household
Income
Micro credit cycle
Pearson Correlation
1
.784**
.784**
Sig. (2-tailed)
.000
.000
Micro Saving
Pearson Correlation
1
.822**
Sig. (2-tailed)
.000
Journal of University of Shanghai for Science and Technology
ISSN: 1007-6735
Volume 23, Issue 9, September - 2021
Page-1026

Household Saving
Pearson Correlation
1
Sig. (2-tailed)
.000
** Correlation is significant at the 0.01 level (2-tailed).
Interpretation- Table-1, showing strong correlation among the Micro credit cycle, Micro
saving and Household saving.
Table 4: Result of Multiple Regression Analysis – Model II
Y= Dependent variables
Average Household
Saving
Intercepts
B = 6.52
t = 4.21
P = .000***
X1= Micro Credit cycle
B = 0.46
t = 2.65
P = 0.018**
X2= Micro Saving
B= 0.98
t = 2.25
P= 0.025**
F
F=7.91
P=0.000***
R Square
0.602
Adjusted R Square
0.599
*P<0.1**P<0.05***P<0.01
Regression Equation
The estimated regression equation 2 as follows:
Y=6.52+0.46X1+0.98X2
Table 4 shows results of multiple regression analysis in which household saving is dependent
variable. R Square is 0.602 which explains 60.20 % variations in household saving and
regression model is fitting with observations.
Journal of University of Shanghai for Science and Technology
ISSN: 1007-6735
Volume 23, Issue 9, September - 2021
Page-1027

Table 4 describes p values are 0.018 for X1 and 0.025 for X2 which is less than predicted value.
It explains significant contribution of microcredit cycle and micro-saving in the model.
11. CONCLUSION AND FUTURE RESEARCH
Microfinance is an effective tool for empowering women because microfinance provides
financial assistance to poor women. The researchers found strong correlation among the
microcredit cycle, micro-saving and average household income. It is also found that there is
strong relationship among microcredit cycle, micro-saving and household saving. It is also
revealed from findings that microfinance (microcredit cycle and micro-saving) has positive
influence on indicators of economic empowerment (household saving and household income).
There are some supporting literatures which reveal that there is positive impact of microfinance
on economic empowerment of women (Swain and Wallentin, 2007; Mohapatra and Sahoo, 2009;
Kavitha and Meenakshisundaram, 2013).
This study will be fruitful for the government, microfinance institutions and banks in policies
making to empower women. This study could encourage women for savings and investing
activities. It might inspire women to take part in microfinance schemes. The main limitation of
the study is that the sample is taken from Haryana state only therefore care is required when
generalizing the results. Future research can be implemented with taking data from selected
states of India.
Journal of University of Shanghai for Science and Technology
ISSN: 1007-6735
Volume 23, Issue 9, September - 2021
Page-1028

REFERENCING
Akter, S., Rutsaert, P., Luis, J., Htwe, N.M., San, S.S., Raharjo, B. and Pustika, A., 2017.
Women’s empowerment and gender equity in agriculture: A different perspective from Southeast
Asia. Food Policy, 69, pp. 270-279.
Arora, S. and Arora, S., 2012. Role of Micro-financing in women empowerment: An empirical
study of urban Punjab. Pacific Business Review International, 5(1), pp. 46-60.
Cheston, S. and Kuhn, L., 2002. Empowering women through microfinance. Draft, Opportunity
International, 64, pp. 1-64
Herath, H.M.W.A., Guneratne, L.H.P. and Sanderatne, N., 2015. Impact of microfinance on
women's empowerment: a case study on two microfinance institutions in Sri Lanka. Sri Lanka
Journal of Social Sciences, 38(1), pp. 51-61.
Herath, H.M.W.A., Guneratne, L.H.P. and Sanderatne, N., 2015. Impact of microfinance on
women's empowerment: a case study on two microfinance institutions in Sri Lanka. Sri Lanka
Journal of Social Sciences, 38(1), pp. 51-61.
Hossain, M. K., 2012. Measuring the impact of BRAC microfinance operations: A case study of
a village. International Business Research, 5(4), pp. 112-123.
Joshi, G., 2019. An analysis of women’s self-help groups’ involvement in microfinance program
in India. Rajagiri Management Journal, 13(2), pp. 2-11.
Kavitha, L. and Meenakshisundaram, K.S., 2013. Role of microfinance on women empowerment
especially in the rural areas. AMET International Journal of Management, pp. 67-75.
Mahmood, T., Arby, M. F., Hussain, T. and Sattar, A., 2016. Impact of microfinance on income
generation and living standards. Pakistan Economic and Social Review, 54(1), pp. 73-80.
Journal of University of Shanghai for Science and Technology
ISSN: 1007-6735
Volume 23, Issue 9, September - 2021
Page-1029

Mohapatra, S. and Sahoo, B. K., 2016. Determinants of participation in self-help-groups (SHG)
and its impact on women empowerment. Indian Growth and Development Review, 9(1), pp. 53-
78.
Nagaraja, K., 2017. Empowerment of women through higher education. International Journal of
Current Research, 10(2), pp. 66113-66115.
Niaz, M. U. and Iqbal, M., 2019. Effect of microfinance on women empowerment: A case study
of Pakistan. Paradigms, 13(1), pp. 52-59.
Modi, A., Patel, K. J. and Patel, K., 2014. Impact of microfinance services on rural women
empowerment: An empirical study. IOSR Journal of Business and Management, 16(11), pp. 68-
75.
Schreiner, M., 2001. Informal finance and the design of microfinance. Development in Practice,
11(5), pp. 637-640.
Rehman, H., Moazzam, D.A. and Ansari, N., 2020. Role of microfinance institutions in women
empowerment: A case study of Akhuwat, Pakistan. South Asian Studies, 30(1), pp.107-125
Silva, I. D., 2012. Evaluating the impact of microfinance on savings and income in Sri Lanka:
quasi-experimental approach using propensity score matching. Margin: The Journal of Applied
Economic Research, 6(1), pp.47-74.
Zoynul, A. M. and Fahmida, M., 2013. Women empowerment through micro credit: A case
study of Dinajpur, Bangladesh. Studies in Business & Economics, 8(2), pp.5-19.
Webpages
http://www.care-international.org
http://www.nabard.org
http://nrlm.gov.in
http://ada-microfinance.org
Journal of University of Shanghai for Science and Technology
ISSN: 1007-6735
Volume 23, Issue 9, September - 2021
Page-1030