Impact assessment of microfinance For poverty alleviation in kota District

Abstract

Microfinance is defined as a package of financial services like credit, saving, newlineinsurance and deposits for the poor sections of society who are deprived of these newlinefacilities from formal financial system and do not have collaterals to guarantee their newlineborrowing. High cost of serving the poor due to small loan requirements and limited newlinesavings, daily-weekly requisite of collection along with wide area of operation made newlinethem unattractive clients among traditional financial service providers. This left newlinethem to the mercy of fate and exploitation of money lenders. Microfinance is a ray newlineof hope to millions of poor around the world. This initiative has brought numerous newlineunbanked poor into formal banking channel and has been growing in number since newlinelast three decades. In India also microfinance has come a long way after its humble newlinestart in 1990s beginning as NABARD Self Help Group Bank Linkage program. In newlinelast three decades program statistics have grown exponentially. The thrust on newlinemicrofinance by policy makers thus call for a critical assessment of this intervention newlineand its impact. Findings of statistical analysis suggested significant positive impact of newlineparticipation in microfinance program on housing structure, farm and poultry assets, newlineconsumer durables, consumption expenditure on FMCG goods, consumables, newlineclothing/ ornaments, utensils and festivals, household annual and seasonal income, newlinesavings and place of saving, amount and frequency of loan, usage of loan for newlineoccupational and consumption purposes; and expenditure on education and health. Furthermore, results reported no association between participation in microfinance newlineprogram and ownership of house, farm and non-farm assets, sources of income. newlineFindings of the study also identified various problems faced by SHG members after newlineparticipation in microfinance program and henceforth required suggestions for newlineelimination of the problems identified are also proposed.