EMPOWERMENT OF RURAL POOR WOMEN THROUGH MICRO-FINANCE

Micro Finance
It is a basis financial services:Small loans, saving accounts, fund transfers and insurance. Alongside non-financial services such as business training. Micro finance assists people living in the poverty.

Microfinance Origins
Concept of Microfinance is not new; savings and credit groups have operated for centuries
Susus in Ghana, Chit funds in India, Tandas in Mexico, Arisan in Indonesia, Cheetu in Sri Lanka, Tontines in West Africa, Pasanaku in Bolivia

Evolution of Microfinance 1900s

Subsidised Credit Experimental Programmes

Commercial Approach

Broadening of Offerings

Focused on agricultural credit through state-owned development finance institutions

Bangladesh, Brazil and few other countries Based on solidarity group lending primarily women Focus on credit for income generation activities

High repayment rate and cost-recovery interest rates Demonstrated that poor were willing and able to pay interest rates that allowed MFIs to recover costs

Rural development banks suffered massive erosion of capital base due to subsidised lending rates & poor repayment discipline

Micro-credit replaced by Microfinance to include not only credit but also savings and other financial services such as insurance and money transfers

Microfinance in India Milestones

1992 NABARD conducts pilot project refinancing SHG programmes 1996 Encouraged by the above pilot project, the govt. appoints the working group made important recommendations including inclusion in the priority sector list. 1999 A task force on NBFCs made recommendations on microfinance 2000 The RBI announces broad guidelines to banks on microfinance in its credit & monetary policy 2002 Informal Group set up to suggest to the govt. on microfinance 2005 Khan Report (RBI) on policy options, development and regulatory issues 4 Recent Developments
Microfinance Development & Equity Fund increased from Rs. 100 cr to Rs. 200 cr. ECBs upto USD 5 million allowed for MFIs (meeting certain criteria) Exim Bank ties up with a number of NGO/MFIs for funding/promoting cluster projects New equity funds for microfinance industry Lok Capital, Bellwether, & Aavishkar fund RBI guidelines on MFIs as banking correspondents

Impact of Microfinance Impact of Microfinance

Poor , participating in microfinance programmes are able to improve their well-being at both individual and household level Poor households with access to financial services not only send their children to school but also allow them to stay in school longer Access to financial services and resultant transfer of financial resources to women, over time, lead to women becoming more confident, assertive and better able to confront systemic gender inequities

Microfinance Vision
Enabling socioeconomic, environmental, grassroots development

Direct Credit Programs

Assisting poverty alleviation

Micro-enterprise Development Services De-centralized Technology innovations

Holistic Financial Solutions to shrink the Bottom of the Pyramid

Savings / Insurance and other financial services

Augmenting sustainable livelihoods

Supporting entrepreneurship Promoting micro-equity funding models

Fostering financial inclusivity, empowerment

Why Microfinance? It works in synergy with other development interventions, like those that promote, health, education, nutrition,
and offers an empowering hand up, not a hand out. Microfinance is an intervention capable of producing a quadruple bottom line: Relieve suffering 1. Bring dignity 2. Become sustainable 3. Inspire supporters

- Microcredit Summit Campaign report 2006

VisionFund is the microfinance subsidiary of World Vision

Empowerment
It is a process of change Gain power and ability to take control over their life. Involves access to resource and increase in participation in decision making and bargaining power. Increased controlled over benefits, resources, self confidence, self- esteem, self- respect.

Women Empowerment
Refers to increasing the spiritual, political, social or economical strength Decision-making power Positive thinking on the ability to make the change. Change others perceptions by democratic means. Increasing ones self- image and overcoming stigma.

Rural women empowerment through micro-finance

Role of NABARD Micro-Finance and Empowerment of women Entrepreneurship development among rural women through micro-credit. Role of self help groups.

Investing for Impact

Invest
Every small loan promises big returns when invested in the passion of the enterprising rural Poor women.

Impact
Work means dignity for parents, food, health care and education for their children and jobs, future and empowerment for rural Poor women.

Transform
Small loans can energize communities to move beyond poverty. But transformation comes when all the causes of poverty are tackled together.

Impact of micro-finance on rural women

Conclusion
Microfinance is emerging as a powerful instrument for poverty alleviation in the new economy. In India, Microfinance scene is dominated by Self Help Group (SHGs)-Bank Linkage Programme as a cost effective mechanism for providing financial services to the Unreached Poor which has been successful not only in meeting financial needs of the rural poor women but also strengthen collective self help capacities of the poor ,leading to their empowerment.

Economic empowerment results in womens ability to influence or make decision, increased self confidence, better status and role in household etc. Micro finance is necessary to overcome exploitation, create confidence for economic self reliance and empower the rural poor women

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