Thursday, December 31, 2009

Micro-credit scheme for rural poor


"Micro-credit can means women have a chance at running their own businesses, which not only improves their economic circumstances but also their status in society,"

The study also evaluates the benefits and limitations of micro-credit as a resourceful means of enhancing women's economic activities in the labor market and eliminating poverty among market and rural women.

Micro-credit is making available of small amounts of credit to the poor, is seen as a vital tool for poverty alleviation and women's empowerment in developing societies.

Micro-credit is emerging as a powerful instrument for poverty alleviation in the new economy. In India, micro-Finance scene is dominated by Self Help Groups (SHGs). Micro-credit involves lending in groups (originally of five members) who were jointly responsible for the loan. It required repayment in small periodic installments, over a relatively short period. It lent not only to farmers but also to rural laborers, petty traders, and most importantly to women.

Banks linkage Programme, aimed at providing a cost effective mechanism for providing financial services to the 'unreached poor'. In the Indian context terms like "small and marginal farmers", " rural artisans" and "economically weaker sections" have been used to broadly define micro-finance customers.

The Finance Minister of India on Jun. 20, 2008, launched a micro credit scheme to provide loans at low interest rates to the slum dwellers. The scheme is supported by a slew of state-run banks and Life Insurance Corporation of India in collaboration with an NGO, ‘Asha’.

Micro-credit schemes and institutions which provide soft loans to women have become a critical tool in development programmes aiming to empower women. This study therefore investigates women's economic empowerment in relation to micro-credit schemes

The significance of the Grameen Bank and other micro credit experiments was that they countered this axiomatic belief by showing that even formal financial institutions could provide loans exclusively to the poor and still be assured of repayment. This is because they are based on the principle of "group lending" whereby loans are made to a group (of between 5 and 20 people) and therefore peer pressure acts as an effective mode of ensuring repayment.

Women borrow money from the micro-credit schemes to establish businesses, allowing them independence and the ability to provide for themselves and their families well into the future.

The schemes join those who have few or no opportunities into co-operatives, where they can borrow money and receive training.

The role of social mobilization in reducing poverty; working of community banking programmes at the village level is the efforts to create space for women to carry out credit and savings transactions.  The process of empowerment through the formation of women's groups and the improvement of women's lives through savings and credit activity.

1 Comments:

At February 6, 2010 1:44 PM , Blogger OIPA – India Representative said...

lease don't promote meat, wine and smoking....promote Eco-friendly articles under micro financing scheme.

 

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