In today’s world, mostly the developing nations, the concept of micro-financing has become a popular jargon thanks to the Grameen Bank, a novel initiative from Bangladesh to finance the poor for starting their individual businesses and becoming economically stable. This management tool promises a bright future for the poverty stricken population of a country, to provide them with a hope of livelihood through small-home businesses in order to improve socio-economic levels and above all provide empowerment to the women.At the same time, the concept shows the road to self-sustenance, encourages self-help groups with a dedicated focus on the Bottom of Pyramid of an economy to empower them.
If catered and empowered well, this sector has the potential to grow phenomenally and eventually contribute significantly to the overall growth of the state. Women being central to the entire development process and at the precursor of social transformation, one can demonstrate and safely conclude that both microfinance and role of women will be instrumental in giving the economy a new outlook and will change the paradigms of management.Some of the success stories stand as testimony to the marvelous work achieved, business models depicted by the Grameen Bank’s success, SHGs of ICICI Bank, Shakthi Ammas at HLL, CEMEX, AMUL, LIJJAT, the success of Avon, Mary Kay, and Tupperware in US and other parts of the world. For these schemes to be successful, it is quintessential as a part of social responsibility that the involved groups spread awareness about the availability of better loan facilities and advantages.The involved microfinance institutions and self-help groups facilitate the entire process on collaboration with banks or corporate to benefit the poor (or the ultimate beneficiaries).
The above level of activity helps the bank to grow and address the issue of “inclusive banking”. This paradigm shift in the functioning of banks has been given due importance and stress repeatedly by notable dignitaries including the RBI Deputy Governor Smt. Usha Thorat, etc. It is seen as an important goal to foster a win-win situation for both the banks, in terms of revenues and profits, and the ultimate beneficiaries, in terms of sustainable growth.MICROFINANCE is nothing but a big idea that is based on small changes. Some researchers attribute the origin of microfinance to a village bank movement in Germany in 1864 that was successful in providing loans to rural farmers.
Others consider modern micro-financing to have begun in the 1970s when community development banks started in places such as Chicago (ShoreBank) and Bangladesh (Grameen Bank). However, regardless of its origin, microfinance was initially the subject of much skepticism.In early 1970’s before the term ’emerging economies’ became current, international organizations and academicians were already beginning to look with interest at the myriad of farmers, labourers, artisans who make up a large part of the economies of Latin America, Asia and Africa. The International Labour Office, which conducted a study of employment in Kenya in 1972, was one of the first development institutions to look at microenterprises as a source of employment generation in developing countries, using the term “informal sector” to describe what we now call as “microenterprises”.Thanks to the Nobel Peace Prize awarded in 2006 to Mohammad Yunus, founder of Grameen Bank, there has been a surge of interest in recent years in microfinance, a tool made especially to help the poor people in emerging economies. These small business loans, averaging about $345, play a vital role in lifting millions of people out of poverty. The ex-Secretary General of the UNO has quite rightly pointed out that – “Microfinance is an idea whose time has come. “The first and perhaps the most critical Millennium Development Goals of all is to make a pivotal difference in reducing the extreme poverty and hunger by half within 2015.
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Around the globe, the United Nations Development Program (UNDP) seeks to promote various approaches to reduce human poverty by emphasizing the importance of social inclusion and equity, human rights and women’s empowerment. MICROFINANCE AND THE ROLE OF WOMEN offers a convincible & conceivable model for study with prospects for immense growth. It also addresses the burdening issues of poverty, illiteracy, empowerment of women and the evils of men-dominated communities.Research studies have shown that there is a tremendous scope of utilizing the skills and knowledge (of producing home products, etc) of women in the remote areas of the country to help them earn a livelihood. The traditional wisdom and skills available in such pockets of the country can contribute a lot to the economic growth.
Albeit these facts sound interesting, they come with a manageable prerequisite i. e. easy influx of aid from public and private organizations in the form of microcredit. The strength of microcredit lies in its ability to organize idle women into a productive workforce with their proven creditworthiness.It is believed that 25 million people worldwide are now using microcredit to undertake income-generating or self-employment activities; of these, 90% are women.
In India, women produce 30 percent of all food commodities consumed but get only 10 percent of the property or wealth of the country. There is a growing realization that rural women have been under-estimated and discriminated against all walks of life, despite their substantial contribution to the household economy and in turn, the national economy as such.This sector needs to be addressed more diligently with due financial aid and consulting inputs. The obvious benefits in the long run for these groups, showcasing the paradigm shift in the orientation of the rural population base, using the microfinance / microcredit machinery are as follows: (a) increases family income and quality of life, and as women represent 90% of the borrowers, their contribution is note-worthy; (b) promotes saving habits among poor women borrowers; (c) raises awareness and empowers women to contribute to various socio-economic activities.Targeting women is being increasingly advocated because of evidence of their higher repayment rates. Microfinance programs like the Self Help Bank Linkage Programs introduced by the NABARD in India have been increasingly promoted for their positive economic impact and the belief that they empower women.
The SHG program of the National Bank for Agriculture and Rural Development (NABARD) in India is the largest and fastest-growing microfinance program in the developing world.Implemented since 1996 on a national scale, it has reached an estimated 121. 5 million people in March 2005, by mainly targeting women. During the last few decades, the country has witnessed the genesis of few organisations and their phenomenal growth, starting as small rural groups of 7-8 women. These organisations with their self-confidence, dedication to quality and commitment to produce whatever little they could have eventually resulted in some of the multi-million dollar churning conglomerates e. g. AMUL, LIJJAT to name a few.
