ECONOMIC EMPOWERMENT THROUGH SHGS: A CRITICAL ANALYSIS OF MICROFINANCE SCHEMES IN RURAL INDIA

Abstract

The paper examines how rural women in India have been economically empowered by being enrolled in Self
Help
Group (SHG) related microfinance programs. The study examines the extent of income and savings behaviour, asset
own ership and self employment among SHG beneficiaries in three different states in India (Bihar, Odisha and
Karnataka) using a structured Economic Empowerment Scale. A cross sectional survey of 300 participants was
carried out in a quantitative way, and the d ata were analysed both descriptively and inferentially. The results indicate
that SHG membership is highly beneficial in increasing the household income, disciplined savings, investment in
productive assets and self employment. The effect is however differ ent in different regions and this is largely
dependent on institutional support, quality of training and the length of SHG membership. Other challenges that the
study identifies include lack of uniformity in access to training, inefficiency in regional ban king, and inability to
monitor informal earnings. These lessons highlight the promise of SHG based microfinance as a revolutionary
instrument of rural development, as well as the necessity of policy interventions, sustained capacity building, and
monitorin g mechanisms that are more regular. The paper provides a better insight into the potential of microfinance
in inclusive economic growth and the areas of future research.