Empowering Rural Women through Microfinance by Cooperative Credit Institutions in India-An approach through Informal Groups

Abstract

Ensuring economic and social empowerment of rural poor especially women, through informal group concept has been recognized as an effective tool for poverty alleviation and financial inclusion across the developing countries more particularly in India. This paper attempts to document and evaluate the performance of informal groups promoted by a Cooperative bank in India with the support of its subsidiary which perform the developmental and promotional role both in terms of empowerment of rural women through participation and employment generation. The study was conducted in a southern state of India and primary data collected from 100 randomly selected groups formed the basis for the analysis. The selected groups were disaggregated based on the age to quantify the impact of the group functioning. The factors contributing to women’s participation were assessed based on scoring technique. The study finding concluded that flexibility in group formation, homogeneity, appropriate capacity building strategies with social commitment were some of the salient futures for the success of group lending for achieving social and economic empowerment of members, especially women. Appropriate inclusion of these variables, even at the designing and early implementation stage, would contribute for the overall success of the group lending program.