CHAPTER II

REVIEW OF LITERATURE

Acquaintance with the contribution of previous investigations

will broaden the perspective and deepen the understanding of the

researchers. With this objective in mind, some related studies have been

reviewed and the list has been presented in this chapter.

Malhotra (1990) observed that at present both RBI and

NABARD are involved in various aspects of co-ordination and liaisioning

at the district level. As it would be advantageous to have a single agency

to plan, co-ordinate and monitor credit programmes of banks and co-

operatives at the district level, NABARD has been identified as the

appropriate agency to undertake these functions. For this purpose,

NABARD will be setting up offices in all the districts within the next four

to five years. These offices will be compact outfits with a manager and

twenty three technical subject matter specialists, with personal computer

support. NABARDs presence at the district level will be it in close

 51

proximity with gross-roots realities and bring about a new dynamism in its

activities for both agricultural and non-agricultural rural development1.

Bansal and Agarwal2 (1991) say that the NABARD is now

the single integrated agency for meeting the credit needs of all types of

agricultural and rural development activities in the country. It also

contemplates undertaking of all works relating to the establishment of

RRBs and administration of refinance scheme and monitoring of the

performance of RRBs. Ever since the NABARD came into being, it has

been playing an important role in strengthening and re-organising the co-

operative structure in the National Economy. It has actively taken over the

responsibilities of the Reserve Bank of India in relation to rural financing

and rural reconstruction.

The study by Shivaji3(1993) revealed that, NABARD has

been providing a variety of training to offices of the commercial banks,

RRBs, SCBs/DCCBs and SLDBs as to its own staff. It has also established

a central training institute at Lucknow called Bankers Institute for Rural

Development (BIRD) with a capacity to run two streams of training course

with 30 participants each, besides two regional training centres at Bolpur

1. Malhotra, R.N., Banking in 1990s, PIGMY, Economic Review, Monthly Economic

Journal of Syndicate Bank, Vol. 35, No.7, February 1990, pp.1-3 and 8.
2. Bansal, S.N., and V.K. Agarwal, Why Would Bank in Against Priority Sector Lending,
Kurukshetra, Vol.XXXIX, No.12, September 1991, pp.28-32, 37.
3. Shivaji. K., Human Resource Development in Co-operative Banks: NABARD, The
Banker: A monthly Banking and financing Journal, Vol.40, No.10, December 1993, pp.39-
43.
 52

and Mangalore. NABARD has also been providing financial and other

support to the junior level training centres of SLDBs and also to the

executives of cooperative banks.

According to Narasimban4 (1993) , the limits under the

general line of credit, (GLCI) provided by the Reserve Bank of India to the

National Bank for Agricultural and Rural Development (NABARD) for

short term seasonal agricultural operations were enhanced in January 1993

by Rs. 400 crore from Rs. 2,700 crore to support the Rabi agricultural

operations, it has been decided to further enhance the limits under GLCCI

by Rs. 400 crore from Rs. 3,300 NABARD has been provided additional

resources of Rs. 1,000 crores to support agricultural activities.

Indian Bank (1995) had conducted a similar study in Tamil

Nadu, covering 45 branches of their bank and 101 SHGs. The study

examined only the transaction costs of the branches under different models

for credit delivered for medium team loans upto Rs. 25,000. It concluded

that lending to SHGs, which on-lend to borrowers with NGO acting as

non-financial intermediary, resulted in saving of transaction costs to an

extent of 45 per cent as compared to lending under government sponsored

programmes and other direct lending projects5.

4. Narasimban Monetary and Credit Policy for the Second Half of 1993-94 : Additional
Resources to NABARD, The Banker : A Monthly Economic of Banking Journal, Vol. 40,
No.8, October 1993, pp.13-17.
5. Indian Bank, Performance of Indian Bank Branches in SHG Lending, Rural Banker, Issue
No.21, 1995, p.2
 53

Puhazhendi (1995) studied 19 SHGs and five bank branches

in Karnataka and Tamil Nadu and concluded that the intermediation of

SHGs reduced the time spent by bank personnel in identification of

borrowers, documentation, follow up and recoveries effecting 40 per cent

reduction in the transaction cost of bank, as compared to direct lending to

individual borrowers. Transaction cost of borrowers was reduced by 85 per

cent.6

Karnati Lingaiah and Anjana Devi (1996) expressed that

agricultural credit is one of the most crucial inputs in all agricultural

development programmes7. Institutional credit has been adopted to

provide cheaper and sufficient credit to farmers from 1950 onwards. The

major policy in the sphere of agricultural credit has been its progressive

institutionalization for supplying agriculture and rural development

programmes with adequate and timely flow of credit to assist weaker

sections and under developed areas- saying the functions of NABARD,

they indicate that NABARD provides short-term, medium term and long-

term and credit to State Cooperative Banks, Regional Rural Banks, Land

Development Banks and other financial institutions approved by Reserve

6. Puhazhendhi, V., Transaction Costs of Lending to the Rural Poor NGOs and SHGs of the
Poor as Intermediaries for Banks in India, The Foundation for Development Corporation,
Australia : Brisbane, 1995.
7. Karnati Lingaiah and C. Anjana Devi, NABARD AND Rural Credit: A Profile, Southern
Economist, Vol.34, No.21, March 1, 1996, pp.23 and 24.
 54

Bank of India. They add that NABARD inspects in the functioning of the

above mentioned banks and institutions and maintains a research and

development fund to promote research in agriculture and rural

development. NABARD also provides purpose-wise refinance assistance

to different schemes like Minor Irrigation Land Development, Farm

Mechanization, Plant Horticulture, Poultry, Sheep Breeding, Piggery,

Fisheries and Dairy Development.

Rajesh Suneja (1997)8 suggests that the NABARD should try

to impose upon itself certain disciplines like the time taken to dispose of

schemes and proposals which are present for consideration. The co-

operative banks should also have a feeling that NABARD is their apex

body in the matter of taking up their problems with the Government and

other financial institutions. Hence, NABARD should have its own

restructuring for streamlining its operations-moreover, it should raise the

bulk of its resources from the market and the bulk of its lending should be

at market related interest rates-subsidized lending by NABARD should

necessarily be a relatively small segment of its total lending. Development

of under-banked states should engage more attention of NABARD while

the relevant procedures should be simplified. For this purpose, it should

explore further avenues of refinancing more institutions.

8. Rajesh Suneja, NARABD needs Revamping for Rural Development, The Banker, Vol.44,
No.7, September 1997, pp. 6-7.
 55

Robinson (2000) defined microfinance as small scale

financial services provided to the people who work in agriculture, fishing

and herding; who operate small or micro enterprises; who provide services;

who work for wages or commission; and other individuals and groups at

the local levels of developing countries, both rural and urban. Financial

services usually include credit and savings, but there are Microfinance

Institutions (MFIs) who provide additional services also such as issue of

cheques, drafts, guarantees, etc.9

Shivamaggi (2000)10 observed that, while the rural

infrastructure development fund of the national bank for agricultural and

rural development NABARD is helping infrastructure projects to a

significant extent the development of brand names for agricultural products

water saving technology, cold storage, agro-processing and packaging have

also be assisted. Rural development projects tend to suffer if the banking

policy makers do not adopt a bold and flexible approach to rural credit.

One recent development under the leadership of NABARD and non-

government organization (NGOs) is the formation of informal self help

groups (SHGs) broadly on the model of the gramean banks of Bangladesh.

The number of SGHs linked to banks is now around 33000 NABARD has

9. Kishanjit Basu and Krishnan Jindal Micro-Finance Emerging Challenges Tata McGraw-Hill
Publishing Company 2000, pp.1-5.
10. Shivamaggi, H.B., Reforms in Rural Banking: Need for a Holder Approach, Economic and
Political Weekly, May 13, 2000.
 56

an ambitious plan for these groups. But much depends on the initiative and

efforts of voluntary organizations. Rural banking in India has made

tremendous quantitative progress. But quality is a different matter. On the

whole it has to be admitted that the policy makers have yet to arrive at a

banking structure and operational system which suit agriculturists credit

and saving needs and at the same time promote modern agriculture.

Dinabandhu Mahal (2000)11 in his article has highlighted

National Bank for Agriculture and Rural development(NABARD) is giving

great importance for the effective implementation of the schemes under the

non-form sector. The co-operatives have been playing a significant role in

dispensing credit. The NABARD provides various other facilities like

establishment of technical monitoring and evaluation (TIME) cell, training

to the participating banks. It is true that if the co-operative banks would

expand their network in the rural areas it would take various benefits under

the NFS financing and undertake proper asset management definitely they

would not only achieve viability but also proper and compete with other

financial institutions.

Nanda (2000)12 observed that NABARD has been directing

its parties and programs to support the rural credit institutions towards

11. Dinabandhu Mahal, Diversification of Lending Under Non-farm Sector Financing in India
Land Bank Journal, (quarterly) Vol.XXXIX, Issue II, September 2000, pp.13-20.
12. Says, Y.C., NABARD Chairmans Interview to Land Bank Journal, Land Bank Journal,
Vol.XXXIX, Issue 11, September 2000, pp.1-6.
 57

achieving the goal of providing adequate and timely credit support for on-

farm, off-farm and non-farm operations in the rural sectors. Vrious

schemes have been formulated and implemented by NABARD for policy

and refinance support to banks, in different fields like creation of

aggregation facilities, farm mechanization, plantation horticulture animal

husbandry, watershed, development, and agro-processing infrastructure in

rural areas. NABARD is supporting large scale investment in rural

infrastructure that includes a wide range of support services like irrigation,

food control, soil conservation, watershed development, roads bridges,

marketing in rural areas. These efforts will go a long way towards

improving the productivity and profitability of agriculture and the quality

of life in the rural areas. This should also lead to increased credit

absorption capacity in the rural areas.

The study by Gurumoorthy13 (2000) indicates that the self

help group (SHG) is a viable alternative to achieve the objectives of rural

development and to get community participation in all rural development

programmes. SHG is a viable organized set up to disburse micro credit to

the rural women for the purpose of encouraging and enterprising them to

enter into enterprising women and encouraging them to enter into

entrepreneurial activities. SHG can fulfil the credit needs for the rural

13. Gurumoorthy, T.R., Self Help Groups Empower Rural Women Kurukshetra, Vol.48,
No.5, February 2000, pp.36-39.
 58

women. The women led SHGs have successfully demonstrated how to

mobilize and manage thrift, appraise credit needs, maintain linkages with

the banks and enforce financial self discipline.

He adds that the district rural industries project has been

introduced by NABARD to develop rural non-farm sector industries. The

NABARD also organizes training programmes for members of the self

help groups like programmes on entrepreneurship development, financial

management, book keeping and skill development in the non farm sector.

He concludes that self help groups have proved that they

could indeed bring about a change in the mindset of the very conservative

and tradition bound illiterate women in rural areas. Self help groups have

made the rural women to contribute for the socio-economic progress of the

country.

Jaya Anand14(2000) in his article opines that the concept of

micro credit is undoubtedly superiors to the traditional rural credit system.

The impact of micro credit on household income reveals that participants

usually have higher and more stable income than they did before they

joined the group. The micro finance programmes have enabled the poor to

take up a micro enterprise by availing credit without an outsider dictating

as to how and the loan should be used. The most striking advantage is the

14. Jaya Anand, Microfinance in Kerala, Kurukshetra, Vol.48, No.11, August 2000, pp.16-21.
 59

thrift component which has totally relieved the group members from the

money lender.

In addition to self help, micro financing and NGO

intervention, the author proposes a new strategy called the community

development society model marking a new social movement in Kerala,

which is an effective way of eradicating poverty of the below poverty line

families. NABARD (1997) in its report conveys that the savings of over

Rs. 3.5 million was mobilized and distributed as loans for income

generating activities to more than 5200 members.

NABARD (2000) is a unique development finance institution

committed to rural development15. It provides refinance to banks and the

state Governments, takes development and promotional initiatives to

improve the impact of credit on development and attempts to bring about

equity and justice in such development. It also supervises the operations of

rural financial institutions like co-operative banks and RRBs. The year

1999-2000, gives high degree of satisfaction to NABARD. New heights

have been achieved in all its areas of operations. Innovations were

introduced and new strategies chalked out for better achievement in future.

The study by Patel16 (2000) reveals that rural credit

15. Impressive performance of NABARD During 1999-2000, National Bank News Review,
Vol.16, No.1, January-March 2000, pp.1-4.
16. Patel, A.R., Rural Credit Need for Banks Initiatives, Kurukshetra, Vol.48, No.12,
September 2000, pp.2-7.
 60

institutions in India have been providing production and investment credit

in agricultural and rural development section. There is a need for them to

play a catalytic role in these fields by way of responding to the changing

needs immediately and favourably. From time to time Government has

introduced rural development schemes which have become products for

bankers. Now banks will have to constantly survey study and search for

new products which suit to different strata of rural population area wise

and time spanwise. Their constant rapport with agricultural universities,

NGOs rural population, rural traders, teachers and land-holders will

helpfully understand the types of new products rural clients need.

Patel (2000) 17 observed that the rural credit structure in India

has completed 95 years and is un paralleled in the world. It serves around

120 million rural households in about seven lakh villages through its 92000

primary agricultural credit societies, 11426 branches of short term co-

operatives 32948 branches of commercial banks and 11426 branches of

regional rural banks. After independence, the rural credit system has

disbursed credit for farm development. He recommends that it is necessary

to form an internal committee consisting of a representative each from the

RBI, NABARD and ministry of finance to examine the recommendations

of several working groups expert committees.

17. Patel, A.R., Farm Credit Policy Needs a Relook, National Bank New Review, Vol.16,
No.2, April-June 2000, pp.43-46.
 61

The National Bank for Agriculture and Rural Development

(NABARD, 2000) conducted a study on the impact of Micro Finance (MF)

on the living standards of SHGs members. The study aimed to find out how

far the SHG bank linkage programme had lightened the burden of life for

the average member of SHG and to analysis the betterment of household

by gaining access to micro finance. The study covered 560 SHG member

households from 223 SHGs spread over 11 states. It showed positive

results. There were perceptible and wholesome changes in the living

standards of the SHG members, in terms of ownership of assets, increase in

savings and borrowing capacity, income generating activities and income

levels. The study revealed that almost all the members developed saving

habits in the post-SHG situation as against 23 per cent of households who

had this habit earlier and the average borrowing per year household

increased from Rs. 4,282 to Rs. 8,341. The study concluded that the

involvement in the group significantly contributed in improving the self-

confidence of the members. The feelings of self-worth and communication

with others improved after association with the SHGs and the members

were relatively more assertive in confronting social evils and problem

situation. As a result, there was a fall in the incidence of family violence.18

18. Srinivasan, Girija and Satish, Impact of SHG Lending on the Profitability of Branches,
Rural Banker, Issue No., 1999, 21, p. 22.
 62

Manab Sen (2000)19 has attempted a study to find out the

development of SHGs promoted by Sreemamahiala Samity and its impact

on women members. It was a study of 10 SHGs selected in Nadia district

on a random sampling technique in July, 1999. The study included focus

group discussion with the members of the SHGs in separate sessions

followed by interview of 100 members through structured schedule. The

findings of the study revealed that the individual loans were mostly used

for productive purposes, the rate of recovery was very high compared to

the rate of recovery of the formal institutional system and group dynamics

was an instrument for change in the quality of life of the poor people. The

study also revealed that other than economic activities, the groups worked

towards primary education, basic health care of family, safe drinking water

and environment protection. The study concluded that group cohesion,

group action, need-based credit timely repayment are essential elements for

sustainability of the groups.

In his budget presentation for 2000-2001, the then union

finance minister Yashwant Sinha20 expressed that sustained and broad

based growth of agriculture is essential for alleviating poverty, generating

incomes and employment, assuring, food security and sustaining a buoyant

19. Manab Sen, Self Help Groups and Micro Finance. An Alternative Socio Economic Option
for the Poor, in Kamta Prasad (eds.) (2000), NGOs and Socio Economic Development
Opportunities, New Delhi: Deep and Deep Publication Pvt.Ltd., 2000, pp.112-119.
20. Yashwanth Sinha, Budget 2000-2001, Kurukshetra, Vol.48, No.7, April 2000, pp.52-55.
 63

domestic market for industry and services. Credit must flow to agriculture

through institutional channels of commercial banks, co-operative banks

and regional rural banks. Yashwant Sinha stated that the government has

launched wide array of initiatives to promote the flow of rural credit. He

proposed to strengthen the earlier programmes and launch further

initiatives. The rural infrastructure development fund (RIDF) managed by

the NABARD has emerged as a popular and effective scheme for financing

rural infrastructure projects.

21
The study by Patel (2001) has shown that farm and rural

sector development has been accorded priority by our planners,

administrators, scientists and financiers in the planning process and

strategy for Indias economic development. Budget for the year 2000-01

has also very sharply focused the dynamic role agriculture has to play in

India, particularly with reference to assuring food security and poverty

alleviation, generating incomes and employment and sustaining a buoyant

domestic market for industry and services. While provision of good

infrastructure both in terms of adequacy and quality is most essential for

enhancing productivity of capital and labour, in rural areas, it also helps in

preventing the migration of rural population to urban areas.

21. Patel, A.R., Budget for the Year 2000-01 Role of Banks and Government, Financing
Agriculture, Vol.XXXII, No.1, January-March 2000, pp.11-17.
 64

Ojha (2001)22 in his study points out that the unemployment

problem prevalent in India sharply differs from that which prevails in

western nations. There are a number of possible routes to the promotion of

self employment, promotion and strengthening of self help groups (SHGs)

is one of them. They provide the benefits of economics of sale, cost

effective alternative for different financial services, collective learning,

democratic and participatory culture, a firm base and platform for dialogue

and co-operation. He adds that the NABARD has started a pilot project for

linking banks with self help groups. It has used several guidelines to the

banks.

Patel23 (2001) in his study, expresses the importance of

NABARD in estimating a production as well as investment credit

requirements for the period from 1998-99 to 2007-08 in the context of

doubling countrys food production. He emphasies that our farm

development policy needs to be re-oriented suitably and our farm credit

policy be relooked. He indicates that the banking sectors (co-operative

Banks, commercial Banks and Regional Rural Banks) should be efficient

to meet area specific needs. He lays emphasis on certain areas need to be

examined; redefining the concept of rural credit, arranging to conduct

22. Ojha, R.K., Self Help Groups and Rural Employment, Yojana, Vol.45, May 2001, pp.20-
23.
23. Patel, A.K., Rural Credit System: Need for Restructuring Kurukshetra, Vol.49, No.4,
January 2001, pp.16-21.
 65

feasibility study on the proposed rural banking subsidiaries as

recommended by the Narasimham Committee, examining the feasibility of

integrating the short term and long term co-operative credit wings,

examining the scope and extent to which RRBs can continue to maintain

their identity of merges with sponsors banks, reviewing the present role

and involvement of the state governments, examining and recommending

the concrete role which the supporting institutional infrastructure inrespect

of training the beneficiaries, providing technology and extension support,

input delivery system, processing, preservation storage transport and

marketing facilities and studying the existing status and recommend the

legal framework for speeding recovery of banks dues with the evolution of

the developmental role to be played by the National Bank.

Sarkar24 (2001) defines micro finance as the entire range of

financial and non-financial services, including skill upgradation and

entrepreneurship development, rendered to the poor for enabling them to

overcome poverty. In the context of designing programmes for the poor,

micro finance is recognized and accepted as one of the new development

paradigms for alleviating poverty through social and economic

empowerment of the poor, with special emphasis on empowering women.

24. Sarkar, A.N., Innovations in Microfinance-linked Development Programmes,

Kurukshetra, Vol.50, No.2, December 2001, pp.2-8.
 66

In conclusion, the author says that the SHG Bank linkage

programme has gained wide acceptance among the partners including

banks. NGOs and the poor are poised for sustained expansion.

Simultaneous with the strategy geared to augment productivity in farm

sector, it is necessary to promote accelerated growth of rural non-farm

sector, on which a large number of rural poor are heavily dependent for

their livelihood support through creation of gainful employment

opportunities.

Samit Kar and Malay Kr. Mukhopadhyay25(2001) in their

study reveal that one way of referring to the process of rural development

was the government aided (and controvelled) economic, social and political

process that go on inside the rural society, the ways in which these process

influence and interact with each other and are influenced by the process in

the society at large, and the out come of these processes in terms of

transformation of the rural society. An ideal system of local self

government finance should have freedom to raise taxation and to determine

how the resources are used. Financial viability and autonomy are

fundamental to the successful functioning of the local self-governing

institutions. The experience right from the Balwantrai Mehta Committee

report till the passing of the 73rd amendment in 1993 shows that these

25. Samit Kar and Malay Kr. Mukhopadhyay, Financing Rural Development: A Case Study,
Yojana, Vol.45, May 2001, pp.29-36 & 43.
 67

Panchayat Raj Institutions (PRIs) remained financially starved and

dependent upon the status resulting into mortaging their self governing

character. A sincere effort has been made under the 73rd amendment to pull

these bodies out of financial starvation.

They conclude that such a development model has already

found place in the rural development policy of the government, with more

and more allocations being made towards watershed management through

public participation. There is now a need to make this an all- encompassing

movement to prevent environmental degeneration and subsequent

economic loss.

Soundarapandian26 (2001) in his study expresses that the

pace of lending by commercial banks and RRBs has been past and it can

now be said that both commercial banks and RRB are more or less equal

partners in Indias rural credit system. Concomitant with the above

development, some distinctive features have also emerged in the rural

credit system. The distinctive features of the Indias rural credit system are

categorized into: i. credit for agricultural production ii. credit for

investment iii. finance for proverty alleviation and iv. Credit for

agricultural exports.

26. Soudarapandian, M., Issues in Rural Credit System, Kurukshetra, Vol.49, No.12,
September 2001, pp.25-29.
 68

Das Gupta27 (2001) says that NABARD will definitely

encourage the bankers to lend more in rural areas. Refinance to the states

by NABARD should be with held if the repayment performance of rural

loans at state level falls below 75 percent. NABARD can consider giving

grants to states for better repayments.

Arjun Sengupta28 (2001) says that NABARD will have to

take on huge responsibilities, take a lot of risks, become an active operator

in the field and would need large funds. The state governments were very

hesitant to draw long-term loans from NABARD up to the available limits.

This could not be explained by the refinance rates of NABARD , which

were substantially lower than the market rates, especially for loans below

Rs. 2 lakhs.

Dubhashi (2001)29 concludes that, the RBI and NABARD

have also been insisting for some time that the duality of control over co-

operatives deserved to be ended. The role of the government should be

limited to the legal tasks of registration and liquidation, whereas the

banking-related functions would be fully brought under the Banking

regulation act under the control and supervision of NABARD. The Capoor

27. Das Gupta, R., Rural Banking and Credit: Tale of Many Committees, Economic and
Political Weekly, Vol.XXXVI, No.4, March 3, 2001, pp.733-737.
28. Arjun Sen Gupta, The Budget in the Context of Long-term Development, Economic and
Political Weekly, Vol.XXXVI, No.11, March 17, 2001, pp.885-888.
29. Dubhashi, P.R., Revitalising Co-operative Rural Credit: A Critique of Capoor Committees
Report, Economic and Political Weekly, April 28, 2001, pp.1378-1380.
 69

committee reflects the thinking of the RBI and the NABARD in favour of

delimiting the control of the government over the co-operative credit

institutions, the later two institutions would like to tighten their own grip in

the name of sound banking.

Namboodiri, and Shiyani30 (2001) conducted a study to find

out the basic features and financial operations of SHGs promoted by both

SHPI and NGOs served by the Panchmahals Vadodara Grameen Bank

(PVGB). A sample of five branches of PVGB were selected, out of which

three are located in Dahod district and two in Panchmahals district, of

Gujarat state. The main findings that emerged from this study were that,

while the percentage of women groups promoted by the SHPI was 52 per

cent, it was as high as 84 per cent for those promoted by the NGOs. The

percentage of SHGs linked by the SHPI was 65 per cent and that of NGO

was 42 per cent. The average amount advanced to SHGs varied from

Rs.7,000 to Rs. 30,000 for those promoted by the NGOs. The SHG that

were promoted by the NGOs had a better saving performance compared to

that of SHPI, in terms of amount saved per SHGs as well as in terms of

credit saving ratio. The repayment performance of the SHGs promoted by

the SHPI was superior to that of NGOs.

30. Namboodiri, N.V., and R.L. Mohan, Potential Role of SHGs in rural Financial Deepening,
Indian Journal of Agriculture Economics, Vol.56, No.3, JulySeptember 2001, pp.401-405.
 70

The National Institute of Bank Management31 (2001) has

studied the performance of SHGs in four districts of Maharashtra promoted

under Maharashtra Rural Credit Project (MRCP). The study observed that

69 per cent of the groups were of the size 11-20, and 50 per cent of the

members were illiterate. The study further observed that 55 per cent of the

office bearers had at least a secondary level of education. The study

revealed that the average savings of the SHGs in MRCP was Rs. 24 per

month per member. This rate was more for new groups than for the old

groups. The study also found that the average amount of savings mobilized

amounted to Rs. 10,658 per group and that the SHGs and MRCP had

started lending their own thrift capital from the eighth month of the

formation.

Lalitha and Nagarajan32 (2002) conducted a critical study on

the functioning of the self help groups (SHGs) in selected districts of Tamil

Nadu. The study was undertaken to document the efforts of NGOs in

promoting SHGs. The objectives of the study were to trace the structure

and modalities of Self Help Groups, study the functioning of the SHGs,

examine the role of SHG in promoting empowerment of women,

investigate the group dynamics of SHGs, identify the factors which

31. National Institute of Bank Management (NIBM), Maharashta Rural Credit Project
(MRCP), Indian Journal of Agriculture Economics, Vol.56, No.3, July-September 2001,
pp.400-402.
32. Lalitha, N., and B.S. Nagarajan, Functioning of the SHGs in Selected District of Tamil
Nadu, (eds.), Self Help Groups in Rural Development, Dominant Publishers and
Distributors, New Delhi, 2002.
 71

contributed to the success/failure of the groups and study the income

generating programmes promoted by SHGs. The study was based on

multistage sampling techniques. It had been carried out in three districts.

NGOs who had organized SHGs for more than four years were identified.

Out of the 14 institutions, nine NGOs were selected and two SHGs from

each NGO were selected on the basis of non-proportionate random

sampling method. The study was based on survey method and had covered

both secondary and primary data. The study highlighted the facts that

SHGs were peoples institutions and with their support, the women could

march towards empowerment and that the groups could promote individual

and groups ventures of income generating activities under the effective

guidance of NGOs. The study also revealed that effective leadership, group

cohesiveness, savings, regular meetings, peer-group pressure, linkage with

other institutions and effective supervision by the NGOs were the factors

which contributed to the success of the groups.

Sudha Rani, Umadevi and .Surendra33 (2002) had undertaken

a study to evaluate the status of women in house management, leadership

qualities, health and sanitation and economic status after participation in

the Self Help Groups. Out of 600 Self Help Groups established by

Padmavathi Mahila Mandal, Tirupati, Andhra Pradesh, 50 Self Help

33. Sudha Rani, K., and D. Umadevi, SHGs Micro Credit and Empowerment, Social Welfare,
February 2002, pp.20-22.
 72

Groups were randomly selected for the study. From each group selected

two women members were selected randomly. The study was based on

primary data and a specially designed rating scale was administered to the

sample to collect the information. The findings of the study revealed that,

in all the four aspects there was positive correlation between the womens

educational status and empowerment. The study observed that the

participation in SHGs enhanced the empowerment of women in these four

aspects. Self confidence among the women increased. Their decision-

making power also increased during the period participation.

Laxmi R. Kulshrestha and Archana Gupta34 (2002) observe

that discussion about the launching of NABARDs pilot scheme micro

finance in the development of the buzz world of the nineties to cure the

illness of rural poverty gained visibility in the Indian development

landscape.

Patel35 (2002) focuses on the immediate need for re-

engineering the rural credit delivery system as multi-agency approach is a

must for a country of our size and diversified socio-economic environment.

He adds that our finance minister expects ground level disbursements of

bank credit of Rs 64000 crore in the year 2001-02 and Rs 75000 crore in

34. Laxmi R. Kulshesthra and Aschana Gupta, NGOs in Microfinancing Partners in Rural
Development, Kurukshetra, Vol.50, No.4, February 2002, pp.26-30.
35. Patel, A.R., Rural Credit System - Need for Revamping Kurukshetra, Vol.50, No.10,
August 2002, pp.4-8.
 73

the year 2002-03. This much disbursement on annual basis has been

however, quite inadequate to meet the increase expected in food

production, leave alone other needs. National bank, in the context of

doubling the food production during the period 1998-99 to 2007-08, has

estimated average annual disbursements of the order of Rs 1,28,176 crore

of production credit and Rs 32866 crore of investment credit. Co-operative

credit structure as revealed by the Capoar committee has been in no good

shape to deliver expected goods unless drastic restructuring measures are

immediately put in place.

Vijayalekshmi and Vijayalakshmi36(2003) in their study on

Women Empowerment Through Self Help Groups in Kanyakuamri

District, Conclude that SHG mainly concerned with the enlistment of the

women in the society through, social economical aspects. It leads to the

empowerment of the women. SHG not only mobilizes micro finance and

provides micro credit to the needed members, but also it provides self

employment training, awareness programme, promotes the leadership

qualities and confidential life to its members. Hence providing adequate

financial support, guidance to start small business, technical support can

uplift their standard of living. If they utilize these efficiently, they need not

face poverty. The good practice of the women SHGs in the study area is

36. Vijayalekshmi, A., and N. Vijayalakshmi, Impact of SHG Lending the Profitability of
Branches, Rural Banker, 2003, Issue No.21, p.22.
 74

repayment of the loan in time. Nearly 64% of the debtors paid their

monthly due within the time, even some members 19% paid their due in

advance. Since the repayment of loan is regular and within the time, we

may conclude that the economic activities of SHGs are quite successful in

developing women empowerment in rural areas in Kanyakumari district.

Hitesh and Viramgami37 (2003) view that NABARD has a

dual role to play as an apex institution and a refinance institution.

NABARD services as a refinancing institution for all kinds of production

and investment credit to agriculture, small scale industries, cottage

industries, handicrafts, real artisans and other allied economic activities

with a view to promoting integrated rural development, it provides long

term, medium term and short term credit to state co-operative banks,

regional rural banks, land development and other financial institutions

approved by RBI. During 1993-94, NABARD has given short term

agricultural credit of Rs 3940 crores, medium term credit of Rs 8 crores

and long term credit of Rs 3232 crores. The NABARD is playing an

energetic role is strengthening and re-organizing the co-operative structure

in the country and is also working towards an effective integration of co-

operative credit institutions.

37. Hitesh and Viramagami, S., A study of Working of Various Financial Institutions with
Reference to Agricultural Credit, Indian Journal of Marketing, Vol.XXIII, No.5, May
2003, pp.28-31.
 75

Srinivasan38 G.(2003) is of the opinion that credit for

agriculture must expand at a faster rate than before because of the

compulsive need to speed up agricultural growth not only to feed a

population of one billion plus but also to generate exportable surplus.

Alongside, there is a need to shift product mix towards animal husbandry,

fisheries and horticulture which have immense potential for income

generation to rural people, besides boosting the countrys export earnings

considerably. In this context the banking system and informal credit

agencies would have to evolve innovative methods and schemes to stay

alive to cope with the unmet credit needs of both organized farmers and the

informal activities of rural people. A proper synergy could be struck to

serve these important constituents of economic development over the long

haul by the existing credit delivery institutions.

Selvanathan39 (2004) in his study has found that NABARD

has estimated the production as well as investment credit requirements in

the context of doubling the food production for the period 1998-99 to

2007-08. Accordingly, average annual disbursements of Rs. 1281-76

billion and Rs. 32866 billion respectively would be made as against

disbursements of Rs. 107.45 billion and Rs. 62.68 million perannum

respectively made on the basis of average value of the past 14 years period.

38. Srinivasan, Rural Credit Delivery Reaching the Unreached, Kurukshatra, Vol.51, No.10,
August 2003, pp.10-12.
39. Selvananthan, V., Rural Banking, Kisan World, Vol.31, No.2, February 2004, pp.14-15.
 76

Naresh Singh40 (2004) observed that in early 1980s, Grameen

Bank, Bangladesh started a revolution by proving that micro-finance can be

an important intervention for poverty alleviation. Subsequently, micro-

finance sector in South Asia is quite significant from the development

perspective. It is estimated that in Bangladesh and India about 1000

institutions / non-government organizations (NGOs) are involved in micro-

finance delivery in each of the country. There are many best practices of

micro-finance delivery in both the countries which can be classified under

four different approaches. These approaches are : 1) group promotion

approach, 2) micro-finance institution (MFI) approach, 3) micro-enterprise

development approach (MED) and 4). Social development approach. This

paper is based on the comparative study of approaches to micro-finance

delivery systems in Bangladesh and India and how micro-finance has been

helpful in income generation and poverty alleviation.

Kamalakannan41 (2005) expresses the role of NABARD in

the development of women entrepreneurs especially in rural areas.

Assistance to Rural women in non farm development, assistance for

marketing of nonfarm products of rural women, formation of self help

groups and rural entrepreneurship development programmes are the major

40. Naresh Singh, Income Generation and Poverty Alleviation Through Micro-Finance: A
Comparative Study of Approaches to Micro-Finance Delivery Systems in Bangladesh and
India Below and Development, Vol.10, No.1, June 2004, pp.24-57.
41. Kamalakannan, K., The Role of Financial Institutions in Development of Women
Entrepreneurs, Kurukshetra, Vol.53, No.6, April 2005, pp.10-14.
 77

fields in which the NABARD plays its role. These assistance and

programme have been introduced to promote the entrepreneurial talent

among rural women and to provide gainful employment to the rural people.

The author concludes that women are the focus of all

development. Development of entrepreneurship among women has become

an important aspect of the over all economic development of women.

Financial institutions, commercial banks and non-government organations

are playing an important role in promoting entrepreneurship among

women.

Priya Basu and Pradeep Srivastava42 (2005), have made

empirical assessment on a recent rural access to finance by conducting a

survey of 6000 households. They feel that despite substantial efforts and a

vast network of rural banks, the rural poor still have very little access to

formal finance, and informal lending remains strong. Over the past decade,

new microfinance approaches designed to deliver finance to the poor have

emerged and some have shown promise. Based on this assessment, they

draw lessons for exploiting the potential of microfinance in India, outline

areas of concerned government policy towards microfinance and rural

credit for the poor. In their assessment, they evaluated the SHG bank

linkage and the effectiveness of it in targeting the poor.

42. Priya Basu and Pradeep Srivastava, Exploring Possibilities Microfinance and Rural Credit
Access for the Poor in India, Economic and Political Weekly, Vol.XL, No.17, April 23-29,
2005, pp.1747-1756.
 78

To meet the challenge of scaling up access, they stress

enabling policy, legal and regulatory frame work as the task of NABARD

attention to quality and importance of financial sustainability, clear

targeting of clients, appropriate products and services and good staffing,

inclusiveness and competition, overcoming geographical concentration,

longer-term reforms to scale up access, freeing up interest rates, entry of

new private banks in rural finance, and restructuring the RRBs and co-

operative banks.

Rajaram Dasgupta43 (2005) discuses that one of the reasons

for the lackluster performance of both public and private sector banks in

extending credit to weaker sections is their high level of NPAs (Non

performing assets). While credit under the Swarnjayanthi Gram Swarozgar

Yojna Scheme across states has been extended in proportion to the poor in

the population, this is not so in the case of self help group (SHG) credit that

has been growing at the rate of 120 percent per annum. However, growth in

SHG credit has been uneven. The southern states are seen as SHG

developed states while Bihar and Madhyapradesh are among those

characterized as SHG backward. But besides the SHG model extending

credit to weaker sections, other different models exist for extending micro

credit to the poor and weaker sections.

43. Rajaram Dasgupta, Microfinance in India-Empirical Evidence, Alternatives Models and

Policy Imperatives Economic and Political Weekly, March 19, 2005, pp.1229-1237.
 79

Mahendra Dev44 (2006) argues that Financial inclusion is

important for improving the living conditions of poor farmers, rural non-

farm enterprises and other vulnerable groups. Financial exclusion, in terms

of lack of access to credit from formal institutions, is high for small and

marginal farmers and some social groups. Apart from formal banking

institutions, which should look at inclusion both as a business opportunity

and social responsibility, the role of the self help group movement and

microfinance institutions is important to improve financial inclusion. This

requires new regulatory procedures and depoliticisation of the financial

system.

The study by the Economic and political weekly research

foundation (2006) highlights that credit delivery to the farm and informal

sectors has deteriorated because the institutional structures have been

allowed to weaken. The latest example is the curtailment of the refinancing

capabilities of the national bank for agriculture and rural development. The

time has come to reorient such an approach and ensure that NABARD

operates as a non-commercial apex institution engaged in financing and

promoting bank lending activities for the informal sector45.

44. Mahendra Dev, S., Financial Inclusion Issues and Challenges, Economic and Political
Weekly, Vol.XLI, No.41, October 14, 2006, pp.4310-4313.
45. EPW Research Foundation, Curtailing Capability of Economic and Political Weekly,
NABARD, Vol.XLI, No.42, October 2006, pp.4396-4402.
 80

Su (2007) pointed out in his article From Marginal

Tinkering to Major Changes Microfinance and poverty Alleviation that

the first step towards setting up self-help groups (SHGs) was taken by

Mysore Resettlement and Development Agency (MYRADA), which built

upon rural chit funds and informal lending networks to evolve a credit

management group. After a pilot project with this NGO in 1991-92,

National Bank for Agriculture and Rural Development (NABARD) worked

actively to frame the legal and financial structure for SHGs and induce

bankers to develop and adopt a fresh lending strategy. On the basis of the

recommendations of the Reserve Bank of India (RBI) working groups

setup in 1994, procedures for dealing with the informal legal SHG structure

were then firmed up in 1996. Several NGOs were also influenced by the

success of the Bangladeshi grameen bank concept of Mohammed

Yunus46.

Vasudevulu Naidu, and Rukmini Reddy47 (2007) visualise

that institutional source of credit is continuously increasing since a long

time. But, there are some problems like inadequate finance and outdated as

well as inappropriate institutional framework the twin problems of the two

institutional reforms are immediately requiring changes in the mindset and

redefining of the role of government. Politicians, intellectuals and farmers

46. Su, Economic and Political Weekly, Vol.XLII, No.5, February 2007, pp.349-352.
47. Vasudevulu Naidu, C., and Rukmini Reddy, M., Agricultural Credit in India: An
Analysis, Southern Economist, Vol.45, No.20, February 2007, pp.11-14.
 81

all need to accept that small loans are more expensive and must be priced

accordingly.

The agriculture credit functions of the reserve bank of India

(RBI) and refinance functions of the then agricultural refinance and

development corporation (ARDC) were transferred to NABARD on its

formation. This followed the recommendations contained in the

Narasimham committee to review the arrangements for institutional credit

for agriculture and rural development (CRAFICARD) which has been set

up by RBI in march 1997. This apex national bank was to oversee and

develop the entire rural credit system including agricultural credit.

They recommend that, under the Kisan Credit scheme, credit

through processors, input dealers, NGOs etc that are vertically integrated

with the farmers through contract farming, for providing them critical

inputs are processing their produce to increase the credit flow to agriculture

significantly.

Michael John Peter and Suseelabai, (2008) in their study on

Empowerment of Rural Women through Self-Help Groups in Kanyakuamri

District, suggested that

All SHGs must under go a SWOT analysis for effective and

successful functioning of SHGs.

 82

SHGs must encourage their members to undertake many income

generation programmes which enable the members to become

economically empowered.

SHGs must give more importance to literacy oriented activities and

services, so that the members can manage SHGs activities very

efficiently.

Necessary steps should be initiated to solve the problem of shortage

of the supply of raw materials to the members of SHGs.

Govt. should encourage export of goods which are produced by the

members.

Govt. should come forward to create separate cell for solving the

problem of SHGs48.

Pappa (2008) in her article SGSY and Women

Empowerment A case study of selected Self-Help Groups in Village

panchayats of Kanyakumari District, Concluded that 91.76 per cent of the

beneficiaries experienced an increase in income, it achieved its objective of

enabling the beneficiaries to earn monthly income of Rs. 2000. Poverty

status of women beneficiaries in the study area provides evidence that

credit facility alone may not help them to escape from poverty trap. For

this substantial and sustained growth in income is needed, requiring an

48. Michael John Peter, S., and M. Suseelabai, Impact of National Agricultural Technology
Project on Empowerment of Women in Agriculture through Self Help Groups, Karnataka
Journal of Agricultural Science, Vol.24, No.4, 2008, pp.561-564.
 83

improvement in human and physical capital of poor women. Results

confirm that exiting SGSY in the study area succeeded in empowering

women.49

Gurmeet Singh (2009) opines that the rural credit system in

India witnessed many reforms over the last five and a half decades.

However, credit supply from the Co-operatives did not match the demand

for credit. The establishment of NABARD in 1982 and the ongoing

financial sector reforms since 1992 have been supplementing the

institutional mechanism.

The author adds that microfinance is a financial service of

small quantity provided by financial institutions to the poor. The financial

services may include savings, credit, insurance, leasing, money transfer etc,

that is any type of financial service, provided to customers to meet their

normal financial needs, unlike normal credit, micro credit is limited with

collateral substitute and credit plans services. There are two major models

under microfinance namely Self-Help Group- Bank Linkage (SHG BL)

and Micro Finance Institution (MFIs). The SHG Banking linkage

programme was initiated in 1992 which tried to facilitate the flow of bank

credits to SHGs.

49. Pappa, M., Micro Finance: A Study of SHG and Bank Linkage, Journal of Business
Studies, Vol.5, No.9, 2008, pp.31-37.
 84

In conclusion, it is clear that the role of microfinance

institutions is very important in Rural Development and poverty

eradication. It is in this context that one needs to appreciate the role played

by micro finance institutions, Government, NGOs and social

organizations.50

Arunchalam (2009) says that in the mid 1980s NABARD

and Myrada promoted self help groups (SHGs) in India. In 1986-87

NABARD provided Myrada with rupees one million to train these groups

and match their savings. Three policy decisions were taken by the Reserve

Bank of India and followed in a commercial manner over the past 30 years

by NABARD. These were : i). To allow banks to lend to unregistered

groups provided they saved, maintained records of decisions, and accounts

ii). To allow banks to lend to groups without asking for the purpose prior to

lending; and iii) To lend without physical collateral provided there was

adequate social capital an affinity based on mutual trust, backed up by

the habit of savings and at least six months experience of internal lending.

These three decisions represent a major reform in financial sector, which

has not been recognized adequately. NABARD then launched the SHG

Bank Linkage program in 1992. Today, over 42 lakh SHGs are linked with

commercial, private and regional rural banks. With an average size of 15

50. Gurmeet Singh, Microfinance An Innovation in Rural Credit System, Kurukshetra,

Vol.57, No.4, February 2009, pp.3-6.
 85

members per group, the total number who have benefited from loans is

over 600 lakh. This makes the SHG bank linkage programme movement

the largest micro finance movement in the world51.

Balamirtham52 (2009) made a study on Women SHGs in the

Upliftment of Tsunami Victims and concluded that the upliftment of

women affected by Tsunami SHGs have been doing women service. SHGs

have been so active after Tsunami in Kanyakumari District. The active role

played by SHGs in assisting Tsunami affected women wiped the hard tears

of those who have been wounded by Tsunami. It is possible for the SHGs

only through the co-operation of the Government and NGOs who have

sponsored SHGs.

Lakshmi Narayanan and Ramanathan and Guvav (2010)

focus that capacity building is the key to healthy growth and sustainability

of SHG Bank Linkage Programme. A variety of capacity building

programs for all the partners involved in SHG banking including bank

branches, NGOs, Government officials, elected representatives of

Panchayat Raj Institutions, IRVs, Farmers Clubs and SHGs should be

undertaken. These may include training programs of various durations with

variations in modules according to needs of the participants besides

51. Arunchalam, P., Micro Credit and Inclusive Growth in India, (2009),
http://en,wikipedia.org/ wiki/ MicrocreditSummit Campaign
52. Balamirtham, P., Women SHGs in the Upliftment of Tsunami Victims, Southern
Economist, Vol.48, No.16, December 2009, pp.41-44.
 86

exposure visits, sensitization workshops and meets and working in tandem

with Government agencies and NGOs in the district53.

According to Gunasundra Devi* and Maria Rose Poomathi

(2010) the women leaders have so far crossed several barriers but still they

have to go a long way in achieving gender equality. SHG and women

leaders in the panchayat have altered the mindset of men in the society. In

the democratic process women have joined together and now they are

taking forward this process. This process is strenuous and painful. Yet it is

interesting as changes are being witnessed. The struggle will continue for

sometime. But gender equality will be achieved.

Women leaders have their own aspirations. They have

emerged as icons. They have introduced many innovations in gram

panchayats to respond to the challenges. For many of the women leaders

social work is a passion. Their response, transparency and accountability in

the panchayat administration have made the people repose confidence in

them. Delivery of service is an essential duty. They protect the dignity of

the women . Some of them successfully implemented government schemes

for which they were awarded. They created linkages and achieved synergy

with the SHGs. The women leaders have acted aggressively. Despite all the

barriers in our system. They are trying to perform with the potential they

53. Laxminarayanan Ramanathan and A.M. Gurav, Commercial Banks in SHG-Bank Linkage
Program an analysis of State Bank of India Southern Economist, Vol.49, No.13, November
2010, pp.32-40.
 87

have. Dalits repose faith on dalit women leaders due to their transformative

action. The study observed that women leaders nurtured true democracy at

the grassroots level54.

Prabakkar Rajkumar (2010) has suggested that, NABARD

should consider the following suggestions to improve its performance in its

various activities:

Gender planning and maintenance of gender disaggregated data are

of utmost importance and need to be built up on an on-going basis.

Women related action research projects and area programmes to be

supported.

Support for conducting skill training, skill up-gradation, REDPs and

other economic training for rural poor women assume significance

in the context of women empowerment.

Supplementary and alternative models for effective credit delivery

system for women need to be encouraged and supported and

Use of second tier financial intermediaries such as Voluntary

Agencies (VAS), Non-Government Organizations (NGOs) yields

better results.

Human development if not engendered is endangered.

Empowering people particularly women is a sure way to link growth and

54. Gunasundra Devi, K.R., and M. Maria Rose Poomathi, Political Empowerment of Women
at the Grassroots Level with Reference to Theni District, Tamil Nadu, Vikasini The
Journal of Womens Empowerment, Vol.25, No.3, 2010, pp.13-17.
 88

human development. NABARDS financial assistance through various

schemes to make the rural women equal partners in the economic

prosperity of India.55

Shashikala and Uma (2011) highlight that in India micro-

finance scheme is dominated by Self Help Groups, Bank linkage

programme aimed at providing financial services to the undetached poor

based on the philosophy of peer pressure and group securing as collateral

substitute. The SHG programme has been successful not only in meeting

peculiar needs of the rural poor, but also in strengthening collective self

help capacities of the poor at the local level, leading to their empowerment.

SHGs are making significant contribution to women empowerment and

empower the members in economic, Social and political spheres. The

micro finance programmes are also expected to become increasingly self

reliant and independent of donor funds through SHGs. This paper analyses

the role of micro finance and the role of SHGs in the empowerment of

women of Hunsur Taluk is Mysore district, in Karnataka state56.

Gurajala Sudarshan (2011) argues that the socio-economic,

political, cultural, philosophical, etc., activities of the person will determine

the development of the person. The active participation of members in

SHG is completely determined by socio-political and cultural as well as

55. www.nabard.org , 2010

56. Shashikala and Uma H.R., Women Empowerment through SHGs: A Study Southern
Economist, Vol.49, No.19, February 2011, pp.51-54.
 89

economic factors. The natural environments within which a community

survives and prospers has a profound effect upon the organization and

institution. They are evolved by the community to meet their needs. Hence,

analysis of socio-economic background of the respondents is imperative.

The younger generation is thriving to develop the women self

help groups and contributing to the development of socio-economic,

political, cultural, and philosophical, etc., activities of the people in the

country side. It remembers the life cycle theory which says that the taste

and preference of the people, employment, income, consumption, savings,

investment and production are high in the young age and all these factors

decrease in the later stages of age. The scheduled castes, scheduled tribes,

windows and divorced women are out of the purview of women self help

groups and forward castes and backward castes women are availing the

benefits of women self help groups57.

Reji (2011) examines in his article Microfinance and

women Empowerment : Evidence from Field study says that the

empowerment impact of microfinance programme of Neighbourhood

Groups (NHGs) in Kerala is based on primary data collected from 200

respondents in 30 NHGs functioning in 11 Gram Panchayats in Nilambur

block in Kerala. The study revealed that apart from providing savings and

57. Gurajala Sudarshan, Problems and Prospects of Women Self-Help Groups in the Economic
Development of Coastal Andhra A Study, Vision, Vol.XXX1, No.1, January-March
2011, pp.58-68.
 90

credit to its members, NHGs were instrumental in bringing desired social

change among the members, The ability to contribute to household income

as a result of the credit access and increased income from income

generating activities helped the members to get respect in their family and

community as well. This acceptance, in turn, helped to gain confidence,

increased role in household decision-making, and control over resources,

ability to freely interact with members of the group as well as outsiders,

ability to deal with adversities and involvement in community activities.

The group activities are also found to be helpful in developing a greater

sense of solidarity, closeness and will to shoulder responsibilities among

the group members which is a true reflection of empowerment as a result of

participation in group activities.58

Venkatesh, (2011) has concluded that womens livelihood

has been prominently empowered by Microfinance. Serving the women

through microfinance means fighting poverty and promoting gender

equality. The weapon of choice can be said as micro finance. There are two

special ways to look at this; one is that microfinance is excellent for

women; the other is that women are excellent for microfinance. The

lessons have exposed that women are liable to repay their loans than men.

For any microfinance institution interested in profit it is significant. The

methodology used by many microfinance providers have made the women

58. Reji, E.M., Journal of Rural Development. Vol.30, No.1, January-March 2011, pp.25-44.
 91

more inclined to work in the cooperatives to reach large numbers of clients

efficiently. Microfinance is specifically considered as one way to correct

some of the broader gender inequalities which are existing around the

world. SHGs are the groups where a greater part of groups are linked with

the help of NGOs. And it provides support in financial services and

specialized training which has a higher scope to create a positive blow on

women empowerment.59

Based on the above past studies reviewed in the chapter, the

present study is conducted the Impact of NABARD on the Rural

Development in Kanyakumari district of Tamil nadu state.

The foregoing review of earlier studies made in different

parts of India, has helped the researcher to under the dimensions of the

problem. It will be a guide to conduct a meaningful study on the NABARD

Investments and their impact on Rural Development in kanyakumari

District.

59. Venkatesh, J., SHG Based Microfinance : The Root for Augmentation of Women, South
Asia Journal of Socio-Political Studies, Vol.11, No.2, January-June 2011, pp.118-119.