Impact of microfinance on self help groups in coimbatore district
Review of Literature
Microfinance is the provision of financial services, primarily savings and credit, to
poor households that do not have access to formal financial institutions and that, microfinance has captured the imagination of opinion leaders, governments and donor agencies as key strategy for poverty reduction. At the same time, however, significant differences of opinion have emerged between the supporters of the microfinance movement and various critics, who have become increasingly numerous and vocal. Self Help Groups (SHGs) is being used in India to refer to unregistered groups of 10 to 20 members involved primarily in savings and credit activities. As in the case of the typical Accumulating Savings and Credit Associations described by (1995), noted that members save periodically in the group and the savings are lent out to members who require loans at a fixed rate of interest. SHGs however differ from typical ASCAs in their small size, their being promoted1 among the poor by external agencies, most importantly in their obtaining loans from banks. Over 90 percent of these groups have only women members as (2002) provides an overview of microfinance SHGs in India. Microfinance has captured the imaginations of many people working to reduce poverty as the premise is simple rather than giving handouts to poor households, microfinance programs offer small loans to foster small-scale entrepreneurial activities. Such credit would otherwise not be available or would be only available at the very high interest rates charged by moneylenders. Moneylenders operate with little competition since potential entrants quickly find that costs and risks are high and borrowers are usually unable to offer standard forms of collateral (1993). However, the emerging microfinance movement demonstrates institutional innovations that appear to greatly reduce the risk and cost of providing financial services to poor households. Innovations include contracts that give borrowers incentives to exclude bad credit risks and monitor other borrowers’ activities, schedules of loans that increase over time conditional on successful performance, weekly or semi-weekly loan repayment requirements (1999).
Questionnaire
The questionnaire will cater to survey questionnaire method that focusers towards Self help groups and details on microfinance thus, linking to case study inquiry from wherein research subjects or respondents are located. The survey will be distributed in Coimbatore District in India. The questionnaire will be in a form of survey related statements that uses a five point scaling system function to rank responses of the subjects on each of the statement items that ranges from 1 to 5 classification of strongly disagree, disagree, neutral, agree and strongly agree respectively. Furthermore, methodology adheres to case study approach in comprehensive and spontaneous manner to be gathered and collated by means of primary and secondary research sources as supporting literature is a vital factor for the research process to achieve a unified degree of research validity and reliability posits, as the latter may serve as one important research method at hand. Through this method, first hand information will be achieved as there uses in research participants to give in ideal response known in case study assimilation. A total of 50 respondents will be in random sample, this will comprise of self help group members relating to microfinance indication of the Coimbatore District in India. The survey statements will deal to the impact of microfinance in self help groups of the district. (refer to below format of what the survey will be like) as the following survey questionnaire (statement) formation are to be adopted in the whole duration of the research investigation as one core method to utilize.
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Strongly Disagree
2
Disagree
3
Neutral
4
Agree
5
Strongly Agree
No
STATEMENTS
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Microfinance has reduced the incidence of poverty through increase in income, enabled the poor to build assets and thereby reduce their vulnerability
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Enabled households that have access to it to spend more on education than non-client households. Families participating in the program have reported better school attendance and lower drop out rates
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5
3
Empowered women by enhancing their contribution to household income, increasing the value of their assets and generally by giving them better control over decisions that affect their lives
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4
Contributed to a reduced dependency on informal money lenders and other non-institutional sources
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5
Facilitated significant research into the provision of financial services for the poor and helped in building capacity at self help group level
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5
Credit:ivythesis.typepad.com
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