Micro finance is a novel approach to ‘banking with poor’ with a social mission. It is aimed at the socio-economic empowerment of the rural poor, especially women. Micro finance has its major initiatives in India through the setting up of SHGss,           by NGOs’. Today micro finance institutions are gaining in popularity among the un banked and under banked population and are playing an increasing role in their upliftment. Micro finance is aimed at empowering women to enhance their roles as decision makers in the family and to pave the way for altitudinal and behavioural changes.


The micro finance operation in India is highly focused on women, as women are considered to be the vulnerable section of the society. MYRADA, PRADAN, SEWA are pioneers  who are doing good work and bringing changes in women’s life. Though most of them have started with a social mission, many of them remain only as providers of financial services: they assume that with providing economic services, social empowerment and gender justice gets achieved as well.


To what extent the MFI’s could empower the rural poor, especially the women folk is a question to be explored. Based on available literature and limited empirical evidence from the three southern states of India, it is realized that MF has produced only limited impact in the rural scene and the empowerment of women is not as it ought to be: empowerment achieved is not to the extent visualised by the MFIs’ and, NGOs’ etc. The overall gender discrimination visible in the Indian society in both macro and micro level is visible in the matter of micro finance too. 


*The development of MF is hampered to a great extent due to the male domination in the family and the society. Many a rural women are not at all permitted to associate with any SHG, NGO or MF institution. How far women are able to decide on what do with the loan taken from SHGs needs study. Their status remains, where it was centuries ago. Need for empowerment did not come to their mind, especially in certain communities and groups in the remotest villages. They are contented with the limited resources and earnings of the family made available by their men folk. It is observed that empowerment of women goes side by side with their education, employment and social status: this too is in fact akin to many a rural woman.


Schemes for general education, skill training, skill up gradation and other economic training for rural poor women have significance in the context of associating them with MF and empowerment. There is need for the involvement of strong institutions/ agencies, either formal or informal, in social intermediation to help the formation of NGO’s, SHG’s and other agencies aimed towards developing MF. The reluctance of the women and the hindrance in their association with SHG’s should be tackled through awareness creation and dissemination of adequate information in the  grass root level by the state and the various other formal and informal agencies and organizations. The development of MF and the tackling of gender issues should go side by side. An urge for knowledge upgradation, skill training, role in decision making, health and family planning, education to themselves and their children and so on leading to empowerment should be developed among the rural women. Women related action research programmes in the remotest rural areas has scope and significance for addressing the issues in the development of MF and the problem of gender issues therein.


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