Microfinance and Rural Poverty
This chapter reviews the progress of the SHG–Bank linkage programme and examines its impact on the socio-economic conditions of SHG member households. The programme has grown at a tremendous pace during the last two decades and emerged as the most prominent means of delivering microfinance services in India. Commercial banks, regional rural banks, cooperative banks and NGOs have contributed significantly to the rapid spread of the programme. Though the regional spread of the programme is highly skewed with highest concentration in the southern region, it has started picking up pace in other regions. The results concerning the impact of the programme on the socio-economic conditions of SHG member households reveal that the average annual net income, assets and savings of these households have increased significantly in the post-SHG situation. The average amount of loans and the regularity in repayment of loans have increased, and the dependence on moneylenders has reduced. The percentages of loans used for productive purposes and employment per household have increased, and the incidence of poverty among SHG members has declined significantly after bank linkage. Social empowerment of women has improved after their participation. The study offers important policy suggestions.
KeywordsCommercial Bank Bank Loan Total Loan Compound Annual Growth Rate Cooperative Bank
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