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- Title
Microcredit - A Tool for Women Empowerment.
- Authors
Gupta, Rakesh
- Abstract
Microcredit is a path toward financial inclusion through the lending of small loans, without collateral, to the poor. Microcredit is part of the broader spectrum of microfinance institutions (MFIs) that provide additional financial services like micro-insurance and financial literacy. Globally, 55 per cent of women live in poverty and 42 per cent do not have access to financial institutions. The majority are subject to subordination by patriarchal societies and reliant on their male counterparts because they do not have access to financial independence. This prevents women from better providing for themselves and their families. However, with the arrival of microcredit and microfinance institutions in the last couple of decades, millions of women around the world are uplifting generations out of poverty. Research has established that women spend 90 per cent of their income on family needs compared to only 35 per cent of men. This also means educational attainment for their children increases, which can double or triple a young girl's future income. Research also shows that when women control family money, their children are more likely to survive by 20 per cent. Microcredit allows for the kinds of investments and benefits for gender equality to occur through avenues of financial independence. Nobel Laureate Muhammad Yunus has said that "if illiterate and poor women can transform themselves into entrepreneurs, imagine what millions of high school and university graduates around the world, empowered by enormously powerful technology, can do". Historical evidence suggests that in India, representation of women entrepreneurs was abysmally low during both the colonial and postindependence era, much of it due to the social set-up and the role entrusted upon women. To support women entrepreneurial initiatives, many banks, such as Small Industries Development Bank of India (SIDBI), National Agricultural Development Bank of India (NABARD), and commercial banks started to offer credit assistance to women. Several schemes were also launched to provide necessary momentum to women entrepreneurship in the country. The Government of India and the RBI has taken a number of initiatives from time to time to promote financial inclusion and to bring these bottom of pyramid, in banking fold in order to effectively deal with poverty issues. Facilitating banks' outreach, leveraging digital technology such as mobile phones and micro ATMs, Business Correspondents (BC) model are able to help reach banking services to remote unbanked areas. Microfinance evolutionary growth has given a great opportunity to the rural poor to attain reasonable economic, social and cultural empowerment, leading to better living standard and quality of life for participating households. Micro credit to women entrepreneur has been a panacea for poverty reduction in India.
- Subjects
INDIA; BUSINESSWOMEN; MICROFINANCE; YUNUS, Muhammad, 1940-; QUALITY of life; WOMEN'S empowerment; FINANCIAL literacy; POOR women; WOMEN'S education; ENTREPRENEURSHIP education
- Publication
Vinimaya, 2021, Vol 42, Issue 2, p5
- ISSN
0970-8456
- Publication type
Article