SUBJECT: CENTRAL BANKING

PROJECT ON: WOMEN EMPOWERMENT

THROGH MICRO FINANCE

GROUP MEMBERS
NAME ROLL NO
ANIKET INDULKAR 36
PRANAV PATOLE 37
PRITI CHAVAN 38
POOJA SHETTY 39
YOGITA BHADEMAR 40
 ACKNOWLEDGEM
ENT
A student collects some bouquets and brickets while collecting information
about project he/she has undertaken. If there is, bouquet, we would like to share
them with those who played a part in its making.

We feel great privilege and pleasure to express my sincere gratitude to our Prof.
(Mrs.) Mrunmaye.T for her useful suggestions without which this project would
not have been a success. We are thankful for the insight we have gained through
numerous discussion with her. The planning and presentation of this project has
been seriously made by our own efforts.

Last but not the least we would like to express our sincere thanks to all the
staffs, our family members and friends for their valuable suggestions and also
for their constant support.
 “WOMEN EMPOWERMENT THROUGH

MICRO-FINANCE”

(A BOON FOR DEVELOPMENT)

INTRODUCTION:-

In recent years, micro finance programme offering financial

services to low income households, specially targeting women. This was based
on the premise that women in poor households are more likely to be credit
constrained and hence less able to undertake income-earning activities with the
aim to meet the Millennium Development Goals & micro finance programmes
role in supporting it, there has been an increasingly expectation on their impact
in women empowerment.

CONCEPT AND FEATURES OF MICRO FINANCE:-

Bangladesh banker and Grameen Bank founder and recent

Nobel Peace Prize recipient, Muhammad yunus is largely known as the pioneer
of microfinance.

The term Micro finance is of recent origin & is commonly

used in addressing issues related to poverty alleviation, financial support to
micro entrepreneur, gender development etc.
 Microfinance is the “extension of very small loans to those
in poverty designed to spur entrepreneurship.”

Non Government organizations (NGOs), community-based

development institutions, credit unions, commercial / state banks and
microfinance institutions offer possibilities for financial services to the poor.

Microfinance is the supply of loans, savings and other basic

financial services to the poor through groups of individuals, formed either in
joint Liability or co-obligation mode. The other dimensions of micro finance
approach are –

 Savings / thrift precedes credit

 Credit is linked with savings / thrift
 Absence of subsidies
 Groups play an important role in credit appraisal, monitoring and
recovery.

Basically, groups can be of two types.

1. Self Help Groups (SGHs) – This is predominant model in India.

2. Grameen Groups – Individual loans are provided on the strength of joint
liability / co obligation (Bangladesh Model)

EMPOWERMENT:-

Since women’s empowerment is the key to socio-economic

development of the community bringing women into mainstream of national
development has been a major concern.

Three types of Empowerment

1. Economic Empowerment: -
Women’s access to savings and credit gives them a greater
 economic role in decision-making through their decision about savings
and credit. When women control decisions regarding credit saving and
credit, they will optimize their own and the household’s welfare.

2. Increased well-being:-
Access to savings and credit facilities and women’s decision
about what is being done with savings and credit strengthens women’s
say in economic decisions of the household. This enables women to
increase expenditure on the well-being of themselves and their children.
This is the main concern in the poverty alleviation paradigm.

3. Social and political empowerment:-

A combination of women’s increased economic activity and
control over income resulting from access to micro-finance with
improved women’s skills, mobility, and access to knowledge and support
networks. Status within the community is also enhanced. These changes
are reinforced by group formation, leading to wider movements for
social and political change.

OBJECTIVE OF THE STUDY:-

1. To Provide Access To Funds To: -

Typically, the poor acquire financial services like loans
through informal relationships. These loans, however, come at a high cost
per dollar loaned and can be unreliable. Furthermore, banks have not
traditionally viewed poor people as viable clients and often will reject
them due to unstable credit or employment history and lack of collateral.
 MFIs dismiss such requirements and provide small loans at high interest
rates, thus providing MFIs the funds they need to continue operation.
2. Encourages Entrepreneurship & Self Sufficiency To: -
Underprivileged people may have potentially profitable
business ideas, but they cannot put them into action because they lack
sufficient capital for start-up coast. Microcredit loans give clients just
enough money to get their idea off the ground so they can begin turning a
profit. They can then pay off their micro-loan and continue to gain
income from their venture indefinitely.
3. Manage Risk: -
Microcredit can give impoverished people enough financial
stability to cross from simply surviving to accruing savings. This gives
them protection from sudden financial problems that could have been
devastating. Savings also allow for educational investment, improved
nutrition, better living conditions and reduced illness. Micro insurance
provides people the ability to pay for health care when needed; they can
receive treatment for health conditions before they become grave and
more costly to treat.
4. To Empower Women: -
Women make up a large proportion of microfinance
beneficiaries. Traditionally, women have been unable to readily
participate I economic activity. Microfinance provides women with the
financial backing they need to start business ventures and actively
participate in the economy. It gives them confidence, improves their
status and makes them more active in decision-making, thus encouraging
gender quality. According to CGAP, Long-standing MFIs even report a
decline in violence towards women since inception of microfinance.
5. Community – Wide Benefits: -
Generally speaking, microfinance institutions seek to reduce
 poverty worldwide. As they obtain funds and services from MFIs,
recipients gain enormous financial benefits which trickle down to others
in their families and communities. New business ventures can provide
jobs, thereby increasing income among community members and
improving their overall well being. Microfinance services gives hope to
people who previously had little or no opportunity to be self-sufficient.

FINDINGS OF THE STUDY:-

Based on the interview and discussions with the group

members, fields workers of local NGO and group questionnaire, survey
results the following findings emerged.
1. The social profile of SHG members indicates that majority of
members are tribal i.e. their overall average is 66.2%. The overall
literacy rate is only 7.43% against the District Tribal Female Literacy
Rate of 15.88%.
2. It is found that the operational efficiency and group dynamics of the
SHG is not the same in all blocks. This could be attitude to several
factors like SHG formation, Internal problem, Support provided by the
promoters, effective leadership etc.
3. It is observed that the average membership in SHG was around
16.26%. Membership is highest in Thane block and lowest in Murbad
block. This may be due to the urban-base of Thane in contras to
Murbad, where 70% of members are tribal. The members have joined
the group in order to earn more income, promoter savings habits and
to develop collective economic and social activities.
4. So far as frequency of group meetings as concern, it is observed that
monthly meeting are the most common in Thane, Dombivli, Kalyan
block. The SHG members arrange their meetings twice in a month.
But, in Murbad meetings are held once in a month / two months.
 5. The groups maintain cash books, passbooks and attendance register,
the members in charge of accounts are being given trainee in book
keeping by the CCD. But the member who looks after all this
secretarial work is not paid any financial incentive.
6. From the study it found that individual members contribute Rs. 10 to
Rs. 50 per month. 70% of SHG circulated thrift and their period of
circulation is monthly.
7. There is a bank linkage programmes establish to SHGs. The SHG
members opened their accounts in various national banks and
cooperative banks. SHG members are getting both internal loan and
external loans under the security of NGOs.

PROBLEMS AND CHALLENGES:-

Survey has shown that many elements contribute to make it
more difficult for women empowerment through micro businesses. These
elements are:
1. Lack of knowledge of the market and potential profitability, thus making
the choice of business difficult.
2. Inadequate book-keeping.
3. Employment of too many relatives which increases social pressure to
share benefits.
4. Setting prices arbitrarily.
5. Lack of capital.
6. High interest rates.
7. Inventory and inflation accounting is never undertaken.
8. Credit policies that can gradually ruin their business (many customers
cannot pay cash; on the other hand, suppliers are very harsh towards
women).