Joybaba

Do the Benefits of Development of Microfinance Programs Reaches to the

Poor Villagers at Grass Root Level - An Experimental Evidence in the rural

areas of Rasulpur of Burdwan District, West Bengal

NAME: RAHUL GUPTA

ROLL NO: 2012110

BATCH: 2012-14

P a g e - 2

SUMMER INTERNSHIP COMPLETION CERTIFICATE SIGNED BY

INDUSTRY GUIDE

This is to certify that Summer Project Report on ―Do the Benefits of Development of

Microfinance Programs Reaches to the Poor Villagers at Grass Root Level - An Experimental

Evidence in the rural areas of Rasulpur of Burdwan District, West Bengal

" prepared by ―RAHUL GUPTA” Roll No. 2012110 of PGDBM 2012-2014 Batch is his/her

genuine effort under my guidance and supervision. His/hers internship commenced on

__________________ (Date) & was completed on___________________ (Date).

The student has successfully discharged all duties assigned to him/her during his internship

with the organization. His conduct was found to be good.

Signatures of the Industry Guide

Name of the Industry Guide: A.K.MONDAL

Designation of the Industry Guide: BRANCH MANAGER OF RASULPUR BRANCH,

PASCHIM BANGA GRAMIN BANK

P a g e - 3

INFORMATION SHEET

NAME OF THE COMPANY: PASCHIM BANGA GRAMIN

BANK

ADDRESS OF THE COMPANY: RASULPUR BAZAR,

BURDWAN, WB

PHONE NO. OF THE COMPANY: 09775736544

DATE OF INTERNSHIP COMMENCEMENT: 01/05/2013

DATE OF INTERNSHIP COMPLETION: 10/07/2013

NAME OF THE INDUSTRY GUIDE: A.K.MONDAL

DESIGNATION OF THE INDUSTRY GUIDE: BRANCH MANAGER

STUDENT’S NAME: RAHUL GUPTA

STUDENT’S ROLL NUMBER: 2012110

STUDENT’S E-MAIL ID: [email protected]

STUDENT’S MOBILE/ RESIDENCE

NUMBER:

08800577370

P a g e - 4

CERTIFICATE OF COMPLETION DULY SIGNED BY THE

FACULTY GUIDE

This is to certify that Summer Project Report on ―Do the Benefits of

Development of Microfinance Programs Reaches to the Poor

Villagers at Grass Root Level - An Experimental Evidence in the rural

areas of Rasulpur of Burdwan District, West Bengal ―prepared by

"RAHUL GUPTA" Roll No. "2012110" of PGDBM 2012-14 Batch

is his/her genuine effort under my guidance and supervision.

Signatures of the Faculty Guide Signatures of the Student

Name of the Faculty Guide Name of the Student

RITU SRIVASTAVA RAHUL GUPTA

========================================================

P a g e - 5

Do the Benefits of Development of

Microfinance Programs Reaches to the Poor

Villagers at Grass Root Level - An Experimental

Evidence in the rural areas of Rasulpur of Burdwan District, West

Bengal

A project report submitted to NIILM-CMS in partial fulfillment of

requirement for summer internship Program

Supervisor:

Ms. Ritu Srivastava

Faculty Member of NIILM-CMS

Submitted by:

RAHUL GUPTA

Roll no:- 2012110

P a g e - 6

Acknowledgement

I would like to convey my sincere thanks to Mrs. Ritu Srivastava, Faculty in

charge of NIILM-CMS for her continuous inspiration.

I wish to take this opportunity to express my deep sense of gratitude to my j

supervisor Mrs. Ritu Srivastava, faculty members in NIILM-CMS for their

precious guidance and help to complete my project report successfully.

I would like to convey my sincere thanks to RASULPUR BRANCH

Mr. A.K.MONDAL, for his valuable guidance and suggestion.

Last but not least it is my foremost duty to thank all my respondents, who

help me to collect necessary information during the field survey.

I also express our gratitude to our sincere library staff who has provided us

with study material time to time. We owe debt to my family, colleagues and

friends who are in some or other way responsible for the completion of this

project.

ROLL NO: - 2012110

P a g e - 7

Self-Declaration

I hereby declare that this project report entitled ―Do the Benefits of Development

of Microfinance Programs Reaches to the Poor Villagers at Grass Root Level? :

An Empirical study through Self Help Group (SHG) -‖ has been prepared by me

during the year 2012- 2013 under the supervision of PASCHIM BANGA

GRAMIN BANK Linkage in the rural areas of RASULPUR IN

BURDWAN District, WEST BENGAL

P a g e - 8

Table of Contents

Page no

Executive Summary 09

Chapter- I: Introduction 15

Chapter-2: Bank Profile 17

Chapter-3: Objectives and Hypotheses 20

3.1 Primary Objective 20

3.2 Specific Objectives 20

3.3 Hypotheses 20

Chapter-4: Literature Review 22

Chapter- 5: Data Collection and Methodology 25

Chapter- 6: Analysis and Findings 27

6.1General information of the SHG members 27

6.2 Economic activities relating to occupation of the SHG

Members

29

6.3 Literacy level of the SHG members 30

6.4 Impact of Microfinance Programs 32

6.4.1 Average annual personal income (Rs.) of the SHG

Members

32

6.4.2 Average annual household income ( Rs.) of the SHG

Members

33

6.4.3 Average annual household expenditures (Rs.) of SHG

Members

34

6.4.4 Average annual household savings (Rs.) of SHG

Members

35

6.4.5 Social impact in terms of standard of living of the

SHG members as well as their families between Pre &

Post- SHG Situation

36

Chapter-7: Recommendation 38

Chapter-8: Conclusion 40

Chapter-9: 42

Annexure-I: Bibliography 42

Annexure-II: Sample Questionnaire 44

P a g e - 9

Executive Summary

The main objective of the study is to assess the impact of microfinance programs

through SHG PASHIM GRAMIN BANK Linkage on the socio-economic

empowerment of the poor people in the rural areas RASULPUR of BURDWAN

District, WEST BENGAL.

Specific Objectives:

1. To assess the impact of microfinance programs on the economic empowerment

(in terms of increment of income, expenditures, saving) of the SHG members as

well as their families between Pre and Post-SHG situations;

2. To assess the impact of SHG survey to develop the day to day life slandered.

3. To assess the impact of microfinance programmes on the social empowerment

(in terms of upliftment of standard of living) of the SHG members as well as

their families between Pre and Post-SHG situations;

Hypotheses:

: There is no variation in average annual personal income of the SHG members

between Pre and Post-SHG situations;

: There is no variation in average annual household income of the SHG

members between pre and post – SHG situations;

P a g e - 10

: There is no variation in average annual household expenditures of the SHG

members between pre and post – SHG situations;

: There is no variation in average annual household savings of the SHG

members between pre and post – SHG situations;

: There is no relationship of various indicators of standard of living of the SHG

members as well as their families between Pre and Post – SHG situations;

This study is based on both primary and secondary data. The primary data has

been collected from the field survey in the different rural areas of RASULPUR

in BURDWAN District, WEST BENGAL.

For this purpose both open-ended and close-ended questionnaires have been prepared

to collect necessary information as well as to justify the socio-economic empowerment

of the SHG members as well as their families.

On the other hand, secondary data relating to general information about the selected

SHGs has been collected from the internal records of the Rasulpur Branch, Paschim

Banga Gramin Bank Beside these few information has also been collected from the

internet, journals, magazines, newspapers and books to gather knowledge about

microfinance programs in India through SHG-Bank Linkage and its impact on socio-

economic empowerment of the poor people.

In this study Two Stage (Mixed) Sampling Technique has been used for the collection

of primary data as well as for testing hypothesis between Pre and Post-SHG situations.

P a g e - 11

The RASULPUR Branch of PASHIM BANGA GRAMIN BANK, BURDWAN

District has been able to form 300 SHGs (as on 30th June, 2011). In the first stage out

of the 300 SHGs, 100 SHGs have been selected on the basis of their loan repayment

performance. In the second stage out of 100 SHGs, one SHG member from each group

has been selected randomly in this study. The collected data has been summarized in a

‘Master Sheet’ in such a systematic manner that can fulfill the objectives of the study.

However the summarized data has been analyzed with the help of few mathematical

and statistical tools like Percentage, Mean, Standard Deviation (SD), Coefficient of

Variation (CV), Pearson Correlation Coefficient etc. by using the software (Minitab

15.0).

Major Findings

The economic activities relating to occupation of the SHG members in

the pre-SHG situation were found that 8% members were employed

and the rest 92% were unemployed. But on the contrary the economic

activities relating to occupation of the SHG members in the post-SHG

situation are found that 98% members are employed and the rest 2%

are unemployed. Here is the Positive Impact of Microfinance, because

almost all members are engaged in economic activities to generate

personal income as well as their families.

Out of 100 group members in Pre-SHG situation 65% were illiterate

and 35% were literate, among which 20% passed primary standard and

P a g e - 12

15% passed secondary standard. On the other side in the Post-SHG

situation out of 65 of illiterate members of pre-SHG,15% remains

illiterate and the 75% members have been able to read and write and

10 % can do sign only. Here is the Positive Impact of Microfinance,

because microfinance programme has changed the scenario of Literacy

Level among the SHG Members.

The mean average annual personal income of the SHG members

(Rs.36852) in the Post-SHG is higher than the Pre-SHG (Rs.33612).

The high inequality of average annual personal income distribution

has been found for both Pre -SHG (C.V = 22.28) and Post-SHG (C.V

= 16).

The high variation in average annual personal income distribution has

been found for the SHG members between Pre and post-SHG

situations.

The mean average annual household income of the SHG Members

(Rs.76788) in the Post-SHG is higher than the Pre-SHG (Rs.71040).

The high inequality of average annual household income distribution

has been found for Pre -SHG (C.V = 13.80) but moderate inequality

has been found in the Post-SHG (C.V = 8.65).

P a g e - 13

The high variation in average annual household income distribution

has been found for the SHG members between Pre and post-SHG

situations.

The mean average annual household expenditures of the SHG

Members (Rs.71448) in the Post-SHG is higher than the Pre-SHG

(Rs.68076).

The high inequality of average annual household expenditures has

been found for Pre -SHG (C.V = 14.35) and but moderate inequality

has been found for Post-SHG (C.V = 8.21).

The high variation in average annual household expenditures has been

found for the SHG members between Pre and post-SHG situations.

The mean average annual household savings of the SHG Members

(Rs.5340) in the Post-SHG is higher than the Pre-SHG (Rs.2964).

The high inequality of average annual household savings has been

found for both Pre -SHG (C.V = 20.31) and Post-SHG (C.V = 21.52).

The high variation in average annual household savings has been

found for the SHG members between Pre and post-SHG situations.

The Correlation between the use of own Deep Tubewell in the Pre-

SHG and the improvement from the other sources to own Deep

Tubewell in the Post-SHG shows a high positive correlation (r =

0.798).

P a g e - 14

The Correlation ( r = 0.396) between the better earthen housing

condition in Pre-SHG and the improvement to better condition in Post-

SHG shows a moderate positive correlation.

The Correlation between Personal Lavatory with Bath Room in Pre

and Post-SHG situations indicate a high positive correlation (r =

0.606).

The Correlation of better dress quality of the members between Pre

and Post-SHG situations shows a high positive correlation (r = 0.588).

The Correlation of watching the TV Serial / Cinema between Pre and

Post-SHG situations indicate a high positive correlation (r = 0.511).

P a g e - 15

Chapter - 1

Introduction

The Microfinance Programmes through SHG (Self Help Group) – Bank

Linkage have been launched by the Government of India as a strategy of

poverty alleviation and rural development. The National Bank for Agriculture

and Rural Development (NABARD) has made pioneering efforts which is

vested with the task of framing appropriate policy for rural credit, provision of

technical assistance backed liquidity support to banks, supervision of rural

credit institutions and other development initiatives. The emphasis is on

improving the access of the poor to Microcredit. There is a basic difference

between Microcredit and Microfinance. The microcredit caters to commercial

needs of poor for enabling them to raise their income levels and to improve

standard of living‖. Thus in microcredit more emphasis is given on loans, while

microfinance also includes support services where people open up channels for

thrift, market assistance, technical assistance, capacity building, insurance,

social and cultural programs etc. So where microcredit is ‗only credit‘ there

microfinance is ‗credit plus. The main theme of Microfinance Programs are that

where the poor people do not have access to normal bank loans for income

generating activities, Microfinance provides small loans to very poor people for

self-employment purpose. It enables the poorest of the people, especially

the women to generate income for them as well as for their families.

P a g e - 16

The SHGs is the basic constituent of microfinance programme in

India. SHG is a group of 10 to 20 poor members and also women

who hugely organize themselves for the eradication of poverty. The

SHG is generally formed by a name. The group members agree to

save regularly a very small amount of money (say Re.1 per day per

member) and aggregate their savings into a fund known as ‗Corpus

Fund‘ from which they can borrow up to 4:1 ratio (maximum loan

amount is a multiple of the total funds deposited in the group

account) as and when necessary for their income generating purpose

.Such a group is linked with a bank, where the group maintains a

saving account. Sometimes the group can withdraw the deposited

amount from the saving account for their personal or family related

purpose. The withdrawal is permitted by the bank if a resolution is

drafted by the members in the group meeting. Group leaders and

deputy group leaders mainly motivate the groups. Generally they

maintain the meeting resolution, record books and register which act

as coordinator between the group and a bank.

.

P a g e - 17

Chapter - 2

. Profile of the Paschimbanga Gramin Bank

Paschim Banga Gramin Bank is one of the leading Regional Rural Banks

formed by amalgamation of three erstwhile Gramin Banks viz. Howrah

Gramin Bank, Bardhaman Gramin Bank and Mayurakshi Gramin Bank as

per Govt of India Notification No: 1/4/2006-RRB dated 26.02.2007.

On amalgamation of erstwhile three Gramin Banks now termed/treated as

transferor Banks, newly established Paschim Banga Gramin Bank has four

districts viz. Howrah, Hooghly, Burdwan and Birbhum as its area of

operation.

Howrah, Hooghly and Burdwan districts traditionally have immense potential

both for agriculture and industry, whereas Birbhum District is not so

advanced in terms of agricultural activities and mostly has mono cropped land

area. Revised and modified industrial policy at the State Level is accelerating

the pace of Industrial Development in the aforesaid districts. Besides,

introduction of non-traditional crop cultivation and multi-dimensional

approach for rising food production arising out of new thrust areas in the

agricultural policy, may contribute to upliftment of the economy of the

aforesaid districts.

P a g e - 18

The region of Bengal is one of the most densely populated regions on earth,

with a population density exceeding 900/km. Most of the Bengal region lies

in the low-lying Ganges–Brahmaputra River Delta or Ganges Delta, the

world's largest delta. In the southern part of the delta lies the Sundarbans—

the world's largest mangrove forest and home of the Bengal tiger. Though

the population of the region is mostly rural and agrarian, two megacities,

Kolkata (previously Calcutta) and Dhaka (previously Dacca), are located in

Bengal. The Bengal region is renowned for its rich literary and cultural

heritage as well as its immense contribution to the socio-cultural uplift of

Indian society in the form of the Bengal Renaissance, and revolutionary

activities during the Indian independence movement.

Remnants of Copper Age settlements in the Bengal region date back 4,300

years. After the arrival of Indo-Aryans, the kingdoms

ofAnga, Vanga and Magadha were formed by the 10th century BC, located in

the Bihar and Bengal regions. Magadha was one of the four main kingdoms

of India at the time of Buddha and consisted of several Janapadas. One of the

earliest foreign references to Bengal is the mention of a land

named Gangaridai by the Greeks around 100 BC, located in an area in

Bengal. From the 3rd to the 6th centuries AD, the kingdom of Magadha

served as the seat of the Gupta Empire.

P a g e - 19

The first recorded independent king of Bengal was Shashanka, reigning

around early 7th century. After a period of anarchy, the native Buddhist Pala

Empire ruled the region for four hundred years, and expanded across much of

the Indian subcontinent into Afghanistan during the reigns of

Dharmapala and Devapala. The Pala dynasty was followed by the reign of

the Hindu Saiva Sena dynasty. Islam made its first appearance in Bengal

during the 12th century when Sufi missionaries arrived. Later, occasional

Muslim raiders reinforced the process of conversion by

building mosques, madrassas and Sufi Khanqah. Beginning in 1202 a military

commander from the Delhi Sultanate, Bakhtiar Khilji, overran Bihar and

Bengal as far east as Rangpur, Bogra and the Brahmaputra River. Although

he failed to bring Bengal under his control, the expedition managed to

defeat Lakshman Sen and his two sons moved to a place then

called Vikramapur (present-day Munshiganj District), where their diminished

dominion lasted until the late 13th century.

P a g e - 20

Chapter-3

Objectives and Hypotheses

3.1 Primary Objective:

The main objective of the study is to assess the impact of microfinance programmes

through SHG –Paschim Banga Gramin Bank Linkage on the socio-economic

empowerment of the poor people in the rural areas RASULPUR of BURDWAN

District, West Bengal.

3.2 Specific Objectives:

4. To assess the impact of microfinance programs on the economic empowerment

(in terms of increment of income, expenditures, saving) of the SHG members as

well as their families between Pre and Post-SHG situations;

5. To assess the impact of microfinance programs on the social empowerment (in

terms of upliftment of standard of living) of the SHG members as well as their

families between Pre and Post-SHG situations;

3.3 Hypotheses:

: There is no variation in average annual personal income of the SHG members

between Pre and Post-SHG situations;

: There is no variation in average annual household income of the SHG

members between pre and post – SHG situations;

P a g e - 21

: There is no variation in average annual household expenditures of the SHG

members between pre and post – SHG situations;

: There is no variation in average annual household savings of the SHG

members between pre and post – SHG situations;

: There is no relationship of various indicators of standard of living of the SHG

members as well as their families between Pre and Post – SHG situations;

P a g e - 22

Chapter-4

Literature Review

The microfinance offers an important and effective means to achieving change on a

number of different fronts, economic, social and perhaps also political. The success of

microfinance organizations in building up the organizational capacity of poor women

provides the basis for their social mobilization that many other development

interventions have not been able to achieve (Kabeer, 2005). The SHG-bank linkage

programme in India has a greater economic impact on households, with increases in

income and decline in vulnerability. There is significant impact on SHG households in

terms of control, management ability, self-confidence, change in behavior and

decision-making. Apart from social empowerment, the SHG households also

demonstrate greater awareness and participation in local politics. However, the impact

is not reflected in certain key decisions, such as, no significant changes are observed in

the decision-making power of women in the field of adopting family planning

measures or buying and selling of land (Swain, 2006). The case study reveals that the

SC/STs have significantly improved their ability to collectively bargain, to plan

projects and to organize group activities besides improving their social position within

their own groups and within the wider community. An unexpected finding is the poor

economic empowerment measured in terms of improvement in assets and income and

significantly positive results has been found. There is general improvement in the

borrowing capability for majority of the poor. Even so, reckoned in terms of leadership

P a g e - 23

empowerment increase in self-confidence and general gender rights awareness building

have an impressive record especially among SC/ST groups. The several successful

cases have been shared with this study include those of a young woman who lost her

earning husband leaving the burden of educating and marrying children on her, a

woman whose husband is a drunkard and who also lost the only male child and a

woman who now lives a positive life having escaped a suicide attempt. They are

recorded here because, to show how Self –help group based microfinance does supply

significant bonding ‗social capital‘ along with credit support (Oommen, 2008). The

empirical results show that rural women in the studied areas have well been

empowered through microfinance programme. The empowerment has been measured

on the basis of four criterions such as increment in income, upliftment of standard of

living, improvement in literacy level and ability to take major economic decisions in

the family. But SHG members have not been able to earn income equally in the Post-

SHG situation due to the lack of organized local markets (Das; Mukherjee and Dutta,

2009). The empirical results also show that women group members as well as their

families have well been empowered economically and socially through the

microfinance programme (Das; Dey and Dutta, 2009). The group based microfinance

interventions has a positive impact on the socio- economic development of poor

villagers in Orissa. The empirical results show that group based microfinance impacted

the client household positively in the increase of income, assets position, savings, and

literacy and in the reduction of migration. The expenditure pattern was altered for

P a g e - 24

households who participated in the group based microfinance intervention where more

impact was on the expenditure on productive assets and household consumables

followed by house construction and repair. The impact was the least but positive in the

case of the food expenditure (Panda, 2009). There is positive impacts on empowerment

and nutritional intake in group based microfinance programme areas overall and

heterogeneity of impacts between members of pre-existing and newly formed groups,

as well as non-participants. Female social and economic empowerment in programme

areas increased irrespective of participation status. Nutritional benefit was more

pronounced for new participants than for members of pre-existing groups (Deininger

and Liu, 2009).

However the researchers have concluded the positive impact of the microfinance on the

socio-economic empowerment of the poor people in India and across the world. The

researchers had conducted the impact assessment studies of microfinance through SHG

– Bank Linkage towards the socio-economic empowerment of the poor people between

Pre and Post-SHG situations.

P a g e - 25

Chapter- 5

Data Collection and Methodology

This study is based on both primary and secondary data. The primary data has been

collected from the field survey in the different rural areas of Burdwan District of West

Bengal. For this purpose both open-ended and close-ended questionnaires have been

prepared to collect necessary information as well as to justify the socio-economic

empowerment of the SHG members as well as their families. The survey has been

conducted from the month of July to August; 2011.

On the other hand, secondary data relating to general information about the selected

SHGs has been collected from the internal records of the Rasulpur Branch of Paschim

Banga Gramin Bank. Beside these few information has also been collected from the

internet, journals, magazines, newspapers and books to gather knowledge about

microfinance programs in India through SHG-Bank Linkage and its impact on socio-

economic empowerment of the poor people.

In this study Two Stage (Mixed) Sampling Technique has been used for the collection

of primary data as well as for testing hypothesis between Pre and Post-SHG situations.

The RASULPUR Branch of PASHIM BANGA GRAMIN Bank, BURDWAN District

has been able to form 300 SHGs (as on 30th June, 2011). In the first stage out of the

300 SHGs, 100 SHGs have been selected on the basis of their loan repayment

P a g e - 26

performance. In the second stage out of 100 SHGs, one SHG member from each group

has been selected randomly in this study. The collected data has been summarized in a

‘Master Sheet’ in such a systematic manner that can fulfill the objectives of the study.

However the summarized data has been analyzed with the help of few mathematical

and statistical tools like Percentage, Mean, Standard Deviation (SD), Coefficient of

Variation (CV), Pearson Correlation Coefficient etc. by using the software (Minitab

15.0).

P a g e - 27

Chapter- 6

Analysis and Findings

6.1 General information of the SHG members:

Table-1

Sample size-100

Religion Hindu

Muslim

96%

4%

Sex Female

Male

82%

18 %

Marital status Married

Unmarried

97%

3%

Age 20-30

31-40

41-50

16%

43%

41%

Motives behind the

SHG formation

Savings

Recognition in the Society

Self-Help in terms of

income generation

Enhancement of family

Income

3%

4%

10%

83%

P a g e - 28

Analysis and Findings:

According to the field survey in the rural areas of Adra of Purulia District -

1. The religious status of the SHG members is Hindu (96%) and Muslim

(4%).

2. The sex ratio is female (82%) and male (18%).

3. The marital status of the SHG members is married (97%) and unmarried

(3%).

4. The SHG members belong to the age group of 20-30 (16%), 31-40 (43%)

and 41-50 (41%).

5. The motives of the members behind the formation of SHG were savings

(3%), recognition in the society (4%), self-help in terms of income

generation (10%) and enhancement of family income (83%).

P a g e - 29

6.2. Economic activities relating to occupation of the SHG members

Table-2

Pre-SHG Post-SHG

Employed 8% 90%

Unemployed 92% 10%

Analysis and Findings:

The economic activities relating to occupation of the SHG members in the pre-

SHG situation were found that 8% members were employed and the rest 92%

were unemployed. But on the contrary the economic activities relating to

occupation of the SHG members in the post-SHG situation are found that 90%

members are employed and the rest 10% are unemployed. Here is the Positive

Impact of Microfinance, because almost all members are engaged in economic

activities to generate personal income as well as their families.

0

20

40

60

80

100

Employed Unemployed

Pre SHG

0

20

40

60

80

100

Employed Unemployed

post SHG

P a g e - 30

6.3. Literacy level of the SHG members

Table- 3

Pre-SHG Post-SHG

Illiterate Literate (35 %) Illiterate Literate

Primary Secondary Sign Only Read &

Write

65% 20% 15% 60% 10% 30%

Literacy level of the SHG members Pre and post

0

20

40

60

80

Illiterate 65% Literate 35%

Pre-SHG

0

20

40

60

Illiterate60% literate40%

Post-SHG

P a g e - 31

Analysis and Findings:

1. Out of 100 group members in Pre-SHG situation 65% were illiterate and

35% were literate, among which 20% passed primary standard and 15%

passed secondary standard. On the other side in the Post-SHG

situation,60% remains illiterate and the 30% members have been able to

read and write and 10 % can do sign only. Here is the Positive Impact of

Microfinance, because microfinance programme has changed the scenario

of Literacy Level among the SHG Members.

P a g e - 32

6.4 Impact of Microfinance Programs

6.4.1 Average annual personal income (Rs.) of the SHG members

Table- 4

Pre-SHG Post-SHG

Mean 33612 36852

Standard Deviation 7490 5897

Coefficient of Variation 22.28 16.00

Analysis and Finding;

i. The mean average annual personal income of the SHG members

(Rs.36852) in the Post-SHG is higher than the Pre-SHG (Rs.33612).

ii. The high inequality of average annual personal income distribution

has been found for both Pre -SHG (C.V = 22.28) and Post-SHG (C.V

= 16).

iii. The high variation in average annual personal income distribution has

been found for the SHG members between Pre and post-SHG

situations.

P a g e - 33

6.4.2 Average annual household income ( Rs.) of the SHG members

Table- 5

Pre-SHG Post-SHG

Mean 71040 76788

Standard Deviation 9807 6644

Coefficient of Variation 13.80 8.65

Analysis and Findings:

i. The mean average annual household income of the SHG Members

(Rs.76788) in the Post-SHG is higher than the Pre-SHG (Rs.71040).

ii. The high inequality of average annual household income distribution

has been found for Pre -SHG (C.V = 13.80) but moderate inequality

has been found in the Post-SHG (C.V = 8.65).

iii. The high variation in average annual household income distribution

has been found for the SHG members between Pre and post-SHG

situations.

P a g e - 34

6.4.3 Average annual household expenditures (Rs.) of SHG members

Table- 6

Pre-SHG Post-SHG

Mean 68076 71448

Standard Deviation 9768 5867

Coefficient Of Variation 14.35 8.21

Analysis and Findings:

i. The mean average annual household expenditures of the SHG

Members (Rs.71448) in the Post-SHG is higher than the Pre-SHG

(Rs.68076).

ii. The high inequality of average annual household expenditures has

been found for Pre -SHG (C.V = 14.35) and but moderate inequality

has been found for Post-SHG (C.V = 8.21).

iii. The high variation in average annual household expenditures has been

found for the SHG members between Pre and post-SHG situations.

P a g e - 35

6.4.4 Average annual household savings (Rs.) of SHG members

Table- 7

Pre-SHG Post-SHG

Mean 2964 5340

Standard Deviation 601.9 1149

Coefficient of Variation 20.31 21.52

Analysis and Findings:

i. The mean average annual household savings of the SHG Members

(Rs.5340) in the Post-SHG is higher than the Pre-SHG (Rs.2964).

ii. The high inequality of average annual household savings has been

found for both Pre -SHG (C.V = 20.31) and Post-SHG (C.V = 21.52).

iii. The high variation in average annual household savings has been

found for the SHG members between Pre and post-SHG situations.

P a g e - 36

6.5 Social impact in terms of standard of living of the SHG member as well

as their families between Pre and Post-SHG Situations

Table-8

Indicators of social aspects Pearson correlation coefficient (rxy)

Sources of drinking water 0.798

Housing Condition 0.396

Sanitation Facilities 0.606

Clothing (Dress quality better) 0.588

TV Serial & Cinema watching 0.511

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Sources ofdrinking

water

HousingCondition

SanitationFacilities

Clothing(Dressqualitybetter)

TV Serial &Cinema

watching

Pre&PostPearson correlation coefficient (rxy)

Pre&PostPearson correlationcoefficient (rxy)

P a g e - 37

Analysis and Findings:

Sources of drinking water

i. The Correlation between the use of own Deep Tube well in the Pre-SHG

and the improvement from the other sources to own Deep Tube well in the

Post-SHG shows a high positive correlation (r = 0.798).

Housing Condition

ii. The Correlation ( r = 0.396) between the better earthen housing condition

in Pre-SHG and the improvement to better condition in Post-SHG shows a

moderate positive correlation.

Sanitation Facilities

iii. The Correlation between Personal Lavatory with Bath Room in Pre and

Post-SHG situations indicate a high positive correlation (r = 0.606)

Clothing (Dress quality better)

iv. The Correlation of better dress quality of the members between Pre and

Post-SHG situations shows a high positive correlation (r = 0.588)

TV Serial & Cinema watching

v. The Correlation of watching the TV Serial / Cinema between Pre and

Post-SHG situations indicate a high positive correlation (r = 0.511)

P a g e - 38

Chapter-7

Recommendation

The SHG program is one of the most successful project by Government of India. Just after Andhra

Pradesh, West Bengal is the second largest area of SHG program. My study is limited by number of

SHGs in Rasulpur area of Bardhaman District. The hypothesis and analysis clearly signifies the

improvement of BPLs in SHG program. On the other hand it also made a dramatic change in Socio

economic environment. But there are several recommendations we wish to give to our respective

Bank as well as Government.

Improving NGO management/ Accountability:

West Bengal has around 1.7 lakh NGOs under its fold thereby putting a large burden on the

WBPIU(West Bengal project implementation unit) to keep track of their field activities. Some

of these NGOs might also not be adequately qualified / staffed to handle the job. It becomes

impractical/ unviable for the PIU to maintain a strong staff strength to merely monitor the

NGOs. Instead, improvements in NGO accountability could to a certain extent be achieved.

Monetary Incentives To NGOs Linked With quality:

Linking the ‗quality‘ aspects to the incentives provided to NGOs can also be explored.

Currently, the incentives for NGOs (the formation, cost, training cost, support cost etc) are

linked only to the number of SHGs and not to the quality of the groups formed thereby not

providing any sort of motivation / incentives for the NGOs to improve the quality of the groups

formed. This initiative should be taken by Government.

P a g e - 39

Bank should improve their grading system: Bank has to improve their grading

system and best on that system Gramin bank will able to measure to performance of the

SHGs member and decide how much loan will provide to SHG members after analyze

their attentiveness.

Less Responsible: Some of SHG members are less responsible regarding their

repayment of loan because of the lack of knowledge about the program.

P a g e - 40

Chapter-8

Conclusion

From this study it has been observe that few group members were involved in

economic activities in the Pre-SHG. But now maximum number of members

involved in the economic activities. Although there is high inequality in income

distribution among the selected SHGs members as well as their families, but all

of the group members and their families have economically well been empowered

in the Post-SHG. We have also observed that along with economic

empowerment, group members as well as their families are well been empowered

socially in the Post-SHG, which ensures the optimum standard of living of the

group members as well as their families. Interestingly the analysis shows that the

literacy level of the group members has been improved at optimum level through

the microfinance programme in the Post-SHG. During the field survey the group

members told that they were dependent on the informal money lenders in the Pre-

SHG. Now they are free from the clutches of informal money lenders through

microfinance programme.

However, poor rural People in the study area have well been empowered

economically and socially through the microfinance programme. But they have

not been able to earn income equally in the Post-SHG because of lack of

organized local markets. In this aspect Govt. should intervene and assist them to

market their products.

P a g e - 41

In conclusion it can say that of course the benefits of development of

Microfinance Programs reaches to the poor villagers through SHG – Bank

Linkage at Grass Root Level.

P a g e - 42

Chapter -9 :

Annexure - I

Bibliography:

1. Das, S; Dey, A and Dutta, S.K. (2009). Impact of Microfinance Programme

through SHG-Bank Linkage: An empirical study towards the socio-economic

empowerment of the rural people, especially women. The Annamalai Journal of

Management (Special Issue), 113-124.

2. Das, S; Mukherjee, S and Dutta, S.K. (2009). Microfinance programme through

SHG-Bank Linkage and Rural Development: A micro-level comparitive study

towards the empowerment of poor people, especially women in the rural areas of

Burdwan and Birbhum Districts of West Bengal. 92nd Annual Conference

Volume; Structural Reforms and Agriculture. II, pp. 217-236. Bhubaneshwar:

Indian Economic Association.

3. Deininger, K and Liu, Y. (2009, March). Economic and Social Impacts of Self

Help Groups in India. The World Bank Policy Research Working Paper

2009:4884 , 1-32. (www.microfinancegateway.org/gm/document-

1.9.38493/39.pdf)

P a g e - 43

4. Kabeer, N. (2005, October). Is microfinance a 'Magic Bullet' for women's

empowerment?: Analysis of Findings from South Asia. Economic and Political

Weekly , 4709-4718.

5. (Oommen, M. (2008, April). Microfinance and Poverty Alleviation: The case of

Kerala's Kudumbashree. Working Paper2008:17;Centre for Socio-Economic and

Environmental Studies , 1-15.

6. Panda, D. (2009). Participation in the group based Microfinance and its Impact on

Rural Households: A Quasi-experimental evidence from an Indian State. Global

Journal of Finance and Management , I (2), 171-183.

7. Swain, R.B (2006, September). Microfinance and women's empowerment:

Evidence from Self help group bank linkage programme in India. Division for

market Development , 1-24.

P a g e - 44

Annexure – II

Sample Questionnaire

(The information collected from the respondent will strictly be used for academic

purpose only)

1) Name of the member:

2) Name of the group:

3) Religion: (i) Hindu (ii) Muslim

4) Material Status: (i) Married (ii) Unmarried

5) Age group: (i) 20-30 (ii) 31-40 (iii) 41-50

6) Motives behind the group formation:

(i) Savings (ii) Recognition in the society (iii) Self help in terms of income

generation

(iv) Enhancement of family income

7) Economic activities of the member:

PRE – S.H.G POST– S.H.G

Unemployed Employed Unemployed Employed

8) Literacy level of the SHG member:

P a g e - 45

PRE – S.H.G POST– S.H.G

ILLITERATE LITERATE ILLITERATE LITERATE

Primary Secondary H.S Graduate Sign

only

Read

& Write

both

9) Average annual Income, Expenditures and Savings (Rs.):

PRE – S.H.G POST– S.H.G

Ave.

Annual

Personal

Income

of the

Member

Ave.

Annual

Income

of the

Family

Family

Expenditures

Family

Savings

Ave.

Annual

Personal

Income

of the

Member

Ave.

Annual

Income

of the

Family

Family

Expenditures

Family

Savings

P a g e - 46

11. (a) Source of Drinking water:

PRE – S.H.G POST– S.H.G

Personal deep

tube well

(old)

Collection from

other source

Specify:

Collection from

other source

Specify:

Personal deep

tube

well (New)

(b) Housing condition:

PRE – S.H.G POST– S.H.G

Earthen Earthen but

improved quality

Earthen Earthen but

improved quality

(c) Sanitation:

PRE – S.H.G POST– S.H.G

Personal lavatory

with bath room

(Old)

General (open-

air)

Personal lavatory

with bath room

(New)

General (open-

air)

P a g e - 47

(d) Clothing (Dress quality):

PRE – S.H.G POST– S.H.G

Better Poor Better Poor

(e) TV Serial or Cinema watching:

PRE – S.H.G POST– S.H.G

Yes No Yes No

12) Do you have any problem regarding the microfinance programme?

(i)

(ii)

13) Do you have any suggestion towards the bank to promote microfinance

programme in better way?

(i)

(ii)