Version classiqueVersion mobile

Microfinance challenges: empowerment or disempowerment of the poor?

Isabelle Guérin
Jane Palier

Part III - Assessing microfinance

23. From passive participation to effective leadership: a study on empowerment of women in Dakshina Kannada, India

Uday Kumar

Texte intégral

1Economic planning in India has been a specialised venture, meticulously pursued by a team of experts through the planning commission. The experts and technocrats, who tailored development programmes for such a vast country, failed to provide the necessary space for the involvement of the local community in the design, implementation and monitoring of such programmes. This has been a serious limitation in the development programmes pursued during the post-independence period. Microfinance, a development programme that has gained currency during the recent past, has, to a considerable extent, gone beyond the above inherent limitation. Microfinance is a flexible and effective programme that accommodates the interests and aspirations of the poor and the marginalized. Unlike many of the earlier programmes, microfinance, with a small dose of capital, was able to activate the semi-skilled and unskilled human resource located on the margins of the economy. This programme was also instrumental in injecting a small dose of democratic spirit into the public sphere, where it was operating. The relevance of democracy in economic growth at the individual and institutional levels is well articulated by economists such as Amartya Sen in their work.

2An analysis of the major research works, and a critical look at the arguments in favour of microfinance highlight two issues of concern. These are:

  • The limiting of microfinance to the lending and recovery cycle, and

  • The tendency to call any group a self-help group (SHG).

3The speed at which these SHGs have been growing reveals that there is pressure on the groups to limit their activities to the cycle of lending and recovery, and the generation of material benefits. Consequently, there has been excessive concentration on credit management, with social empowerment, a vital issue, taking a backseat. Unless social empowerment takes place, it may not be possible to address the strategic issues upon which economic growth rests. In situations where there was large-scale growth of SHGs, social empowerment seems to have been negotiated for economic gains.

4The government and the NGO sector are actively engaged in the practice of and research on microfinance and there have been sufficient studies on the impact of microfinance on target groups. Most of these studies emphasise material effects such as the creation of assets, the generation of employment and so on. Undoubtedly, these are important issues. However, if one concedes the point that microfinance should make a value addition to human capital by developing leadership, it also becomes necessary to look beyond the material benefits accruing out of microfinance. Therefore, it is necessary that any microfinance programme should leave its beneficiaries with sufficient strength in terms of material and non-material variables, towards the acceptance of the next dose of policy support. Since the central focus in microfinance is the development of the self and extending help for others in the community in the same condition, it is necessary to develop leadership among the members of the group. Unless there is emergence of leadership within the group or the community, there will always be dependency on the agencies external to the target group. Absence of proper leadership within the group results in the beneficiaries becoming mere tools in the hands of the intervening agencies. The target groups in the development programmes should be at the centre of the programme, not the intervening agencies. Therefore, one should look at the increase in the level of socio-political empowerment by the members of the group. Unless there is socio-political empowerment, the programme may limit microfinance to the lending and recovery cycle. In such a situation, it likely that the intervening agencies would walk away with enormous social benefits, which would make their presence inevitable for the poor and marginalized. Therefore, it is essential to measure not only credit management and economic benefits, but also social gains, in terms of leadership, education, and awareness about citizenship rights. The present paper is an attempt in this direction.

5This paper attempts to study the impact of microfinance on women’s empowerment, and is divided into two parts; in the first part, the objectives of the study and methodology are discussed, and in the second part, some case studies are discussed in the context of the indicators developed to measure the social and economic impact of the programmes.

6The study has the following objectives:

  • To assess the role of microfinance in the empowerment of women.

  • To explore the reasons underlying the empowerment of women.

  • To analyse the role of the Neo-Literates Association (NLA) in the development of leadership among women.

1. Method of study

7The study uses both primary and secondary data towards the fulfilment of the objectives stated earlier. Present studies on the evaluation of microfinance do not have any specific tools to measure the effectiveness of the central focus (empowerment) of the programme. Therefore, it was necessary to devise a specific index to measure the level of empowerment achieved by the target group or the beneficiaries. A pilot study conducted in the study region during the period May-June 2003 reinforced the above idea. A close look at the objectives of microfinance reflects that the main focus is on the following factors:

  • To involve people in the development programme, which is designed for their benefit;

  • To work towards the enhancement of the economic conditions of people;

  • To create a conducive atmosphere for the emergence of social, economic and political leadership among people.

8The existing studies on microfinance lack proper methods to measure the empowerment level achieved by the beneficiaries. In the absence of any such tools, one has to make some general statements about the success or failure of the programme. Therefore, it was thought essential to develop some kind of index to measure the level of empowerment of the SHGs. To measure the first factor, a general index with five components was developed. To measure the second factor, an economic empowerment index with six components was developed. In order to measure the third factor, a social empowerment index with fifteen components was designed.

9The economic empowerment index was applied to some select SHGs promoted by various intervening agencies in the study region. A small sample was selected from among the intervening microfinance institutions, which were classified as non-governmental organisations (NGOs), civil society organizations, and the co-operative sector. In these three groups, the organisations were ranked according to the year of establishment, area of operation, number of SHGs formed, savings mobilised, and loans availed. Information regarding the above criteria was collected from the secondary source, namely, interviews with the executives, field workers, beneficiaries, and researchers in the area. Sufficient care was taken to verify the reliability of information through field visits and cross-verification. Organisations that topped the list were selected for the purpose of this study. Considering the number of NGOs, it was decided to have due representation in the sample. Accordingly, two organisations were selected from among the NGOs. The following table shows the information about the sample selection.

Table 1. Sample selected for the application of the empowerment index

Table 1. Sample selected for the application of the empowerment index

10In the final analysis, ranking of each component in the empowerment index was done on a five-point scale (A=80, B=60, C=40, D=20, E=0). The fieldwork was conducted by the author from October-December 2003. In the following paragraphs, some sample cases are presented, to represent the SHGs selected for the purpose of this study.

2. Case studies

2.1. Case 1

11Preethinagara is a colony in the suburbs of Mangalore, mostly inhabited by people living on the margins of the economy. In almost all the families, it is the women who had to bear the burden of running the household, as most of the men were alcoholics. The women narrated how they had to haul up their drunken husbands from the roadsides and gutters, especially on the days when they were paid their wages. A social worker from an NGO called “Sisters of Charity” came to the colony to educate the women about the advantages of forming an SHG. Reluctantly, the women did so. They started saving money, procured civic amenities in the colony and enhanced their economic conditions and social status. Members now discuss their common problems, and stand by one another during a crisis. They are confident of fighting any injustice by local miscreants or corrupt officials. Their only worries are about the decline of the beedi industry, and an economic recession.

2.2. Case 2

12Heernabail is a small locality in Kemmai village in Dakshina Kannada. The NLA was able to help the women of the locality build up the confidence to form an SHG. In the initial stages, the men in the family just about tolerated the women taking part in the activities of the SHGs. But when there was an increase in the family income, the men started recognising the strength of the women as leaders and economic agents. After attending the meetings, the women concentrated on what could be done to improve the quality of life. They shared their ideas with the men in the family, and with other members in the group. Women who did not have any formal education have acquired the skills of reading and writing. They have gained enormous confidence after attending the Neo-Literates Association (NLA) and today they are very good organisers, managers and inspiring leaders. They have been successful in making the men give up alcohol. Today, the women are aware of their rights, and know that they must be assertive in order to be effective.

2.3. Case 3

13Marnaad is a village situated about 9 km from Karkal Taluk Centre. Shri Kshetra Dharmasthala Rural Development Project (SKDRDP) is an NGO run by the Temple Trust. Jnana Vikasa Yojane (JVK) is one of the programmes launched by SKDRDP in 1992. The organisation has a welldefined structure and samyojike (field supervisors) take the initiative to form SHGs of women. The SHGs so formed elect a leader, who will be the secretary of the group. SKDRDP considers economic empowerment of women to be the most important function of an SHG. To realise this objective, each JVK mobilises deposit from its members and distributes loans to members according to their needs. Members are clearly instructed to follow the rules in the group and the violation of rules attracts a penalty. Generally, the supervisor suggests a place for the meeting and he leads the discussion in the meetings. Once a year a “Sathyanarayana Pooja” (a religious rite performed by Hindus) is organised to seek the blessings of God. Members of the group contribute free labour and money for this function. Members said that they were able to improve their economic position. Members have also attended training programmes for self-employment.

2.4. Case 4

14Manjanakatte is situated 6 km from Moodbidri, and is well-connected by road. There are about 40-50 families of the Scheduled Caste or Scheduled Tribes. Persuaded by an employee of the Bank, women of this locality formed a Navodaya SHG in 1999. There are 19 members in the group. Most of them are economically weak and socially disadvantaged, but all except two have primary education. Nevertheless, these two are able to sign now, after attending an adult education programme. They have availed of loans to repair their homes, buy gold, dig a well, and for other consumption purposes. In their meetings the women discuss general issues concerning routine life in the village, and conduct competitions for the members. Once a year, they visit places in nearby localities. On investigation, it was found that socially disadvantaged communities like SC/STs and Other Backward Castes were under the mercy of the landholding class until recently. Generally, nobody could contest in elections to local bodies against this landholding class. The educated younger generation who resisted this domination and oppression were attacked physically. The Dalith Sanghrasha Samithi (DSS), a front line organisation of the SC/STs, intervened and it attracted public attention. The government too, had to intervene. After this incident, no major atrocity has been recorded. Their position now is far better, compared to their life a decade ago.

3. Level of socio-economic empowerment

15The level of socio-empowerment in the sample cases is measured with the help of the indices developed for the purpose as stated earlier.

16From the table 2 below, it is obvious that Group 2 scores over others in the sample, in the overall empowerment level. However, we find that when it comes to economic empowerment, almost all of them are close to one another. However, there is a significant difference in the overall level of (social + economic) empowerment between them. A close look at the formation, management, and the role of the sponsoring agency, reveals some interesting observations. Of the four SHGs, the one formed by the NLA remains different from others. The NLA was formed as a civil society organisation during the early 1990s and its members have undergone training in various socio-economic issues, such as literacy, leadership, fighting against corruption, women’s empowerment, co-operation, child labour, de-addiction, Panchayati Raj institutions (PRI) and the like. Subsequently, when there was emphasis on microfinance programmes, members of the NLA formed SHGs. The initiative appears to have come from the members or the volunteers (Preraka/Preraki). The NLA, as a civil society organisation, operates on democratic principles, mainly consisting of people from the poor and the marginalized, where women are in large numbers. It does not have a rigid structure, and members have sufficient freedom and autonomy. Perhaps this has been responsible for its success. However, this is to be investigated further before a conclusion can be drawn. This is to reaffirm the fact that SHGs did not limit their activity only to credit management, it went beyond that, which contributed to the overall empowerment of the women. However, this advantage was not there in the case of other SHGs, and we found that intervening organisations reached people with the state-supported microfinance scheme, formed SHGs and went ahead with the expansion in the number of SHGs. Consequently, one finds that it is the intervening institutions that utilise idle resources, and not the people who utilise the financial resources for their benefit. Ultimately, who makes use of whom, has a telling effect on the level of socio-economic empowerment scaled by the target groups.

Table 2. Empowerment Levels as per the Empowerment Index

Table 2. Empowerment Levels as per the Empowerment Index


  • 178 Lakshman rekha is an imaginary line, which women in India find very difficult to cross. There is my (...)

17SHGs in the region have succeeded in activating idle physical and human resources. Women, especially, who lived on the margins of the economy, were able to gain confidence and courage to cross the “lakshman rekha”178. Ground realities point to the fact that a democratic process towards redistribution of power and resources is yet to get kick-started.

18In a hierarchical society divided on the lines of caste and community, development initiatives should always keep open the option of moving towards equality. SHGs by their very existence have been able to create a network of people who derive strength from one another. Taking into account the existence of SHGs over a decade, what is achieved may not be substantial but it has given new lease of life to many. There are innumerable small segments that are empowered economically and socially. If all these segments are woven into the wider social fabric, it will make a strong bargaining group capable of making qualitative changes in the socioeconomic realm. If continued further, this newly emerged leadership among women is capable of leading to this end. However, the likely impediments could be of SHGs taking traditional channels (based on hierarchy, caste, religion and the like) to reach the poor and the needy. In a number of cases the trajectory through which this programme has traversed has restricted the SHG movement from growing. Experiments such as the NLA, which deserves due focus, has unfortunately lost the public attention in the rhetoric of intervening agencies.


178 Lakshman rekha is an imaginary line, which women in India find very difficult to cross. There is mythological basis to this in the Indian epic Ramamyana. Lakshman, the brother of King Rama, goes out leaving Seetha (Rama’s wife) alone in the hut. He draws a line and warns her not to step out of the line, under any circumstances. However, she crosses the line and has to face lot of hardships.

Table des illustrations

Titre Table 1. Sample selected for the application of the empowerment index
Fichier image/jpeg, 80k
Titre Table 2. Empowerment Levels as per the Empowerment Index
Fichier image/jpeg, 302k


Reader, Mangalore University College, Mangalore (India)

© Institut Français de Pondichéry, 2005

Conditions d’utilisation :


Rechercher dans OpenEdition Search

Vous allez être redirigé vers OpenEdition Search