Synergistic Effects of Microfinance Through SHGs: A Study of Basic Health and Primary Education Indicators



Traditionally, money-lending institutions such as banks, lent funds only to people who had property, steady earnings, and a credit history. In the last few decades, however, the concept of banking for the poor has become a reality, and popular parlance terms it ‘micro-finance’. Often, microfinance is extended to groups of people rather than to individuals as a means of ensuring greater security to the lending institution through the vehicle of ‘peer pressure’ among the group members. In this chapter, an attempt has been made to study the grass root reality in the functioning of microfinance mechanism through self-help groups in West Bengal and their developmental influences on the health and primary education. Group-based microfinance, through the mechanism of self-help groups, provides a good opportunity to provide awareness about the need for primary education and basic health care, through their meetings and peer consultations. The chapter’s first section provides a brief description of microfinance and highlights the positive impacts on client, their families, and the community at large. Then it discusses the issue of positive externalities (health and education), resulting from microfinance interventions. The discussion revolves around the success of SHGs in implementing microfinance strategies to accomplish better health and education. The case study of microfinance initiatives by way of grade improvement in self-help groups in West Bengal, and their impact on basic parameters of health and primary education is deliberated upon. The analysis in this chapter is meant to provide policy making bodies a better understanding of client needs and how to (re)structure programs to increase their impact in addressing multiple needs.


Primary Education Poverty Alleviation Primary Level Institutional Delivery Microfinance Institution 


  1. Amin S, Arends-Kuenning M (2004) School incentive programs and children’s activities: the case of Bangladesh. Comp Educ Rev 48:295–317CrossRefGoogle Scholar
  2. Barman D, Majumdar PG (2009) “Demand and supply side barriers in access to childhood immunization services: a case study of Murshidabad, West Bengal”. Working Paper 9, Future Health Systems, IndiaGoogle Scholar
  3. Blom A, Canton E (2004) Can student loans improve accessibility to higher education and student performance: an impact study of the case of SOFES, MexicoGoogle Scholar
  4. Card D (2001) Estimating the return to schooling: progress on some persistent econometric problems. Econometrica 69(5):1127–1160CrossRefGoogle Scholar
  5. Chowdhury M, Nath S, Chowdhury R (2003) Equity gains in Bangladesh primary education. Int Rev Educ 49(6):601–619CrossRefGoogle Scholar
  6. De Armendariz AB, Morduch J (2005) The economics of microfinance. The MIT Press, CambridgeGoogle Scholar
  7. Dixon P, Tooley J (2003) Private schools for the poor: a case study from India. Working paper, Centre for British TeachersGoogle Scholar
  8. Dunford C (2002) Building better lives: sustainable integration of microfinance with education in child survival, reproductive health, and HIV/AIDS prevention for the poorest entrepreneurs. In: Daley-Harris S (ed) Pathways out of poverty. Kumarian Press Ltd, Connecticut, pp 82Google Scholar
  9. Dutta A and Khasnabis R (2012) “Health sector reform in West Bengal: A GP level analysis” in Pranab Kumar Chattopadhyah & Sudipta Bhattacharya (ed): “Challenges of livelihood & inclusive rural development in the era of globalization‟. New Delhi PublishersGoogle Scholar
  10. Edmark K Erica E (2002) Impact of microcredit on children’s primary and secondary schooling. In: Grameen dialogue published by Grameen trust, April 2002. 5 Microfinance and Health: a case for integrated service deliveryGoogle Scholar
  11. Goldberg N (2005) Measuring the impact of microfinance: taking stock in what we know. Grameen Foundation USAGoogle Scholar
  12. Gonzalez-Vega C, Maldanado J, Romero V (2002) The influence of microfinance on human capital accumulation: evidence from Bolivia. Working paper, Ohio State UniversityGoogle Scholar
  13. Hans Dieter Seibel (2006): ‘Ensuring quality in self help banking, an assessment’. APMASGoogle Scholar
  14. Khumawala S, Frazier B (2007) A framework for microfinance supported education programs. Working Paper, University of HoustonGoogle Scholar
  15. Kropp EW, Suran BS (2002) Linking banks and Financial self help groups in India—an assessment, paper presented at the seminar on SHG bank linkage programme, Microcredit Innovations Dept, NABARDGoogle Scholar
  16. Maldanado JH (2005) The influence of microfinance on the education decisions of rural households: evidence from Bolivia. Working paper, Ohio State UniversityGoogle Scholar
  17. Microfinance and Health (2000) A case for integrated service delivery. In: Remenyi J, Quiñones B (eds), pp. 7Google Scholar
  18. Mizan AN (1994) In quest of empowerment: the Grameen bank impact in women’s power and status. The University Press Limited, BangladeshGoogle Scholar
  19. Mosley H, Chen L (1984) "An analytical framework for the study of child survival in developing countries". Bulletin WHOGoogle Scholar
  20. NABARD (2005) SHG Bank linkage model-wise cumulative position up to 31 March 2005 Reserve Bank of India. Report of the internal group to examine issues relating to rural credit and microfinanceGoogle Scholar
  21. Patrinos HA, Psacharopoulos G (2004) Returns to investment in education: a further update. Educ Econ 12(2):111–134Google Scholar
  22. Sebstad J, Cohen M (2000) Microfinance, risk management and poverty. Synthesis report generated under the AIMS (Assessing the Impact of Microenterprise Services) project at management systems international for USAID, p 20Google Scholar
  23. Singh K (2005) Banking sector liberalisation in India: Some disturbing trends. Public Interest research centre, India, Asia Europe dialogue project reportGoogle Scholar
  24. Streeten P (1981) Development perspectives. The MacMillan Press Ltd, London, p 337Google Scholar
  25. Takahashi K (ed) (1998) Globalization and the challenges of poverty alleviation. The Foundation for Advanced Studies on International Development, Japan, pp 83–84Google Scholar
  26. Tooley J (2000) Serving the needs of the poor: the private education sector in developing countries. Can Market Save Our Schools, pp 167–184Google Scholar
  27. Tooley J (2005) Private schools for the poor in C R Hepburn ed ‘Can Market Save our Schools?’ The Frazer Institute, Vancouver. Educ Next 5(4):22–33Google Scholar

Copyright information

© Springer India 2014

Authors and Affiliations

  1. 1.Department of Business ManagementUniversity of CalcuttaKolkataIndia
  2. 2.Department of EconomicsUniversity of CalcuttaKolkataIndia

Personalised recommendations