Thesis on Empower Women Through Micro Credit Programmes

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INTRODUCTION A significant development in recent years has been the mushrooming of community-based organizations and initiatives at the local level for women. Reports indicate that self-help programmes, often in the form of savings and credit or micro credit schemes, have succeeded in changing the lives of poor women, enhancing incomes and generating positive externalities such as increased self-esteem. This paper addresses the challenging issue of whether self-help micro credit programmes are tools for empowering poor women. ‘Micro credit is about much more than access to money.

It is about women gaining control over the means to make a living. It is about women lifting themselves out of poverty and vulnerability. It is about women achieving economic and political empowerment within their homes, their villages, their countries. ‘ As Noeleen Heyzer of UNIFEM reveals in the above statement, there is clearly an important role for microfinance to play in the ‘empowerment’ of women. However, there remains much debate over exactly what this role should look like, as well as over exactly what is meant by the concept of ‘women’s empowerment. Much of the debate centers on the perceived tradeoffs between women’s empowerment efforts and organizational financial sustainability. Many microfinance institutions (MFIs) struggle with if and how they should incorporate empowerment strategies in their organizations in light of these perceived tradeoffs. Recent trends in donor funding away from organizations that place primary emphasis on women’s empowerment and toward organizations focused on achieving financial sustainability have created added skepticism around the value of adopting empowerment approaches in microfinance institutions.

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This paper challenges leaders in the microfinance field to look beyond these debates and trends and consider adopting new ‘participatory approaches’ to empowerment that will allow MFIs to create fundamental changes in gender relations while minimizing conflict with financial sustainability aims. It also encourages MFIs to ‘rethink’ many of the current program services in order to make them more empowering to women.

Moreover, the paper presents a compelling case for why strategically planning for empowerment approaches is so crucial in the context of a microfinance sector where more and more practitioners are becoming complacent toward empowerment under the assumption that microfinance practices automatically produce significant empowerment benefits for women. By challenging this assumption and highlighting the other benefits of empowerment approaches, this paper hopes to move both practitioners and donors to take action toward adopting and encouraging new empowerment approaches in microfinance institutions. In most of the developing countries today, more and more emphasis is laid on the need for development of women and their active participation in the main stream of development process. It is also widely recognized that apart from managing household, bearing children, rural women bring income with productive activities ranging from traditional work in the fields to working’ in factories or running small and petty businesses. They have also proven that they can be better entrepreneurs and development managers in any kind of human development activities.

Therefore, it is important and utmost necessary to make rural women empowered in taking decisions to enable them to be in the central part of any human development process. The empowerment of women also considered as an active process enabling women to realize their full identity and power in all spheres of life. Against the background of the patriarchal system of society, the women need special attention to ensure their development and participation in the decision making process at home, in the community and governance.

Hence what is needed is a conductive environment to maximize their potentials. This conducive environment should include basic amenities such as better health and nutrition, education and sensitization to their rights and protection under the law and employment opportunities, etc. over the decades, various strategies have been adopted to empower rural women with some mixed results. One of the viable strategies, quite often talked about, is the role of enterprise to empower rural women.

For example, promotion of rural enterprise makes full use of family labour, requires less capital in production and uses locally available raw material. In addition, family ties and kinship linkages may help in promoting rural enterprise. Thus, enterprise development has been considered, among other factors, a powerful tool to eradicate poverty especially among rural women as they are at the lowest rung of poverty ladder in almost all afro-asian countries. For women to become a successful entrepreneur, she needs access to capita , technical and managerial know-how and market. The essence to empower rural women lies in catalyzing appropriate economic activities at the grass root level and creating new opportunities for them to earn higher income in order to improve their standard of living. This objective could be accomplished by establishing enterprises that are based on the locally available resources and preferably indigenous knowledge. Development experience shows that gender inequalities are a major factor impeding progress towards the Millennium Development Goals of poverty reduction.

This is particularly true in rural areas, where women are generally very involved in productive work but lack access to assets they need to play that role effectively. As a result of this imbalance, rural women are often more vulnerable to poverty than men, and their limited ability to secure assets independently makes them more likely to be negatively affected by ongoing changes in rural markets and institutions. This paper is divided into three sections.

In the first section we shall discuss the concept of Self-Help Groups (SHGs) as an instrument of economic empowerment, its various models and the strength of informal sector over formal sector. In section II we shall present the progress of the SHG-Bank led model of micro-financing in India, and finally in section III we shall conclude with the presentation of strategy of women empowerment by linking benefits extended by the governments to the members of Self-Help Groups (SHGs) with open and distance education, degrees or diplomas.

SECTION I SELF-HELP GROUPS AS AN INSTRUMENT OF ECONOMIC EMPOWERMENT Concept of SHG: SELF HELP GROUPS are small informal associations created for the purpose of enabling members to reap economic benefit out of mutual help, solidarity, and joint responsibility. The benefits include mobilization of savings and credit facilities and pursuit of group enterprise activities. The concept of self-help groups gained significance, especially after 1976 when Prof. Mohammed Yunus of Bangladesh began experimenting with micro-credit and women SHGs.

Self – Help Group (SHG) is a small voluntary association of poor people, preferably from the same socioeconomic background. They come together for the purpose of solving their common problems through self-help and mutual help. The SHG promotes small savings among its members. The savings are kept with a bank. This common fund is in the name of the SHG. Usually, the number of members in one SHG does not exceed twenty. The concept of SHG is based on the following principles: Self-help supplemented with mutual help can be a powerful vehicle for the poor in their socioeconomic development; •Participative financial services management is more responsive and efficient; •Poor need not only credit support, but also savings and other services; •Poor can save and are bankable and SHGs as clients, result in wider out reach, lower transaction cost and much lower risk costs for the banks; •Creation of a common fund by contributing small savings on a regular basis; •Flexible democratic system of working; Loaning is done mainly on trust with a bare documentation and without any security; •Amounts loaned are small, frequent and for short duration; •Defaults are rare mainly due to group pressure; and •Periodic meetings non-traditional savings. Micro finance programmes are currently being promoted as a key strategy for simultaneously addressing both poverty alleviation and women’s empowerment. Before 1990s, credit schemes for women were almost negligible.

There were certain misconception about the poor people that they need loan at subsidized rates of interest on soft terms, they lack skills, capacity to save, credit worthiness and therefore are not bankable. Nevertheless, the experiences of several and SHGs reveal that rural poor are actually efficient managers of credit and finance. Availability of timely and adequate credit is essential for them in their enterprises rather than subsidies. Earlier government efforts through various poverty alleviation schemes for self-employment by providing credit and subsidy received little success.

Since most of them were target based involving various government agencies and banks. Meaning of Empowerment The concept of empowerment has been the subject of much intellectual discourse and analysis. For the purposes of this discussion, the conceptual framework expounded by United Nations is a useful starting point (United Nations 2001). Empowerment is defined as the processes by which women take control and ownership of their lives through expansion of their choices.

Thus, it is the process of acquiring the ability to make strategic life choices in a context where this ability has previously been denied. The core elements of empowerment have been defined as agency (the ability to define one’s goals and act upon them), awareness of gendered power structures, self-esteem and self-confidence. Empowerment is not essentially political alone; it is a process having personal, economic, social and political dimensions with personal empowerment being the core of the empowerment process.

In fact political empowerment will not succeed in the absence of economic empowerment. The Scheme of Micro-financing through SHGs create empowerment promoting conditions for women to move from positions of marginalisation within household decision making process and exclusion within community, to one of greater centrality, inclusion of voice. The Social processes of Micro financing programmes strengthens women’s self esteem and self worth, instill a greater sense of awareness of social and political issues leading to increased mobility and reduced traditional seclusion of women.

Most importantly micro-finance programmes enable women to contribute to the household economy, increasing their intra-household bargaining power. Thus, micro financing through Self-help groups has transferred the real economic power in the hands of women and has considerably reduced their dependence on men. But the lack of education often comes in the way and many a times they had to seek help from their husbands or any other educated man/ woman for day-to-day work. The political as well as economic empowerment will not succeed in the absence of women education in skills and vocations they require the most.

The Governments in developing countries therefore must take effective steps to enroll the members of SHGs in the Schemes of open schooling or any other distance mode to impart education. Although it is also true that economic empowerment alone does not always lead to reversal in gender relationship. SECTION II PROGRESS OF MICRO-CREDIT THROUGH SHGS IN INDIA A pilot project for linking SHGs with banks was launched by NABARD in 1992. The Reserve Bank of India persuaded Commercial Banks, Regional Rural Banks and Cooperative Banks to actively participate in the linkage programme.

Under the RBI’s guidelines, banks were given permission to open saving bank account in the name of SHG, and relaxation of security requirements. Thus, an informal credit system was evolved with assistance from formal financial institutions. The agencies involved inthe schemes were NABARD, Banks, NGOs and SHGs members. The main objectives were to provide the following: • Supplementary credit to SHGs • Reductions in transactions cost for both banks as well as SHGs by reducing paper work. • To mobilize small savings among poor rural women. To build mutual trust and confidence between Banks, NGOs and rural poor • To create healthy relations between SHGs members and linking agencies • Constant supervision and monitoring by banks through NGOs. In March 1999, about 0. 56 million families engaged in micro enterprises were financed under the scheme through 33000 SHGs (of which 84% were women SHGs. In all 202 banks consisting of 129 (64%) RRBs 38 (19%) Commercial Banks and 35 (17%) Cooperative Banks participated in the programme. A total of 550 NGOs, were involved. The aggregate loan outstanding was Rs. 70 million. The average loan outstanding per SHG and per micro entrepreneur worked out to Rs. 17297 and Rs. 1019 respectively. The average number of micro entrepreneurs per SHG is 19. The number of SHGs linked to banks has increased to 7,17,360 as on March 31,2003. This translates into an estimated 11. 6 million very poor families brought within thefold of formal banking services. About 90 percent of groups linked with banks areexclusive women groups Cumulative disbursement of bank loans to these SHGsstood at Rs. 2048. 7 crore with an average loan of Rs. 28,560 per SHG.

The government of India has launched “Swarnajayanti Grameen SwarozgarYojana” (SGSY) by merging all the poverty alleviation programmes. The SGSYenvisaged the routing credit preferably through SHG conduits. The earlierprogrammes like IRDP (Integrated Rural Development Programme) that provided credit at low rates of interest along with subsidy failed because of lack of incentives in the form of repeat loans and also because of absence of poor pressure from group members. Further, in SGSY credit is one of the ingredients that contribute to the success of micro entrepreneurs. The uccess actually depends on variety of other factors, like level of education, social customs, family planning, health, medical services and environment technology. Among these education acquires the top rank and therefore government should use DE technique to impart knowledge at grass root level. The distance education technique is women friendly. Look at some success stories in some states of Indian Union. SECTION III STRATEGY OF WOMEN EMPOWERMENT In view of low literacy rate of women and the gigantic task of educating rural women a suitable strategy will have to be planned.

The major task is to identify the areas where these groups in fact, are facing problems because at this stage only the problem solving adult learning technique will attract these rural poor to improve their working and income. The success of any strategy of women empowerment depends upon the following factors: 1. Level of education, hard work 2. Social custom 3. Family planning, small family 4. Health, medical services, cleanliness 5. Environment, tree growing, kitchen gardening. Various case studies show that there is a positive correlation between credit availability and empowerment of women.

On the face of it, Distance Education appears per se a ‘women friendly’ form of acquiring education and formal qualifications. There are two characteristics which are generally seen to render this mode of learning specially suitable for women, by making distance education compatible with other spheres of life, first, there is no attendance requirement, second, at the same time, there is a high degree of flexibility in learning schedules and time management. These characteristics have three distinct and undisputed advantages for the distant student.

Since, the distance-teaching curriculum is designed for independent study if can well fit with family commitments and living at home. Learning material is sent to the women at their home or workplace they can learn while they earn and the NGO/SHG may provide them the required tuition wherever they desire. Rural women can learn at their own pace on the basis of availability of time. Technology helps them round the clock access on student support services. In rural India where girls and women are largely excluded from education at all levels D. E. may be the only option. Opportunities are not equal.

Responsibilities are more they have to overcome greater odds, less support from their families, early marriage childcare. The members of SHGs are mainly illiterate and do not have access to formal education. In a study it was reported that the members of the Groups were not fully literate and were not able to read and write. 5 Many are now able to append their signatures perhaps an outcome of the government-sponsored literacy programme and the compulsion to affix signature on several occasions as members of SHGs. The handicap of literacy would be a hurdle for achieving many desired results.

For example they will be unable to follow the accounts maintained by the group and hence remain ignorant about the amount pooled individually and in the group, and would be unable to draft an application to represent their case. It is therefore essential to provide them education through especially designed modules through distance education that are directly useful as a member of SHG. At this stage they do not need school or university certificate, Diploma or degrees. They need improvement in their professional skills and solving their day-to-day problems in the working and functioning of SHGs.

They should be explained the advantage of group based strategies in poverty alleviation. Importance of savings and opening bank account, marketing of products, timely repayment and repeat loaning. It is important to explain that she is not alone and that such problems are being faced universally. Only by self-help they may fight against their misfortune and improve upon the fate of their family and children. All these problems, opportunities and chances can be explained the women through short duration training module delivered at their doorstep or work place.

At the initial stage we may face certain problems and resistance from the participants if we demand some extra time and money. It is therefore suggested that the benefits should be linked with the DE modules and subsidies should be in the form of distance education and not cash. There are instances where cash subsidies were taken away forcefully by male, members in the family for liquor consumption and gambling and made no significant impact in the society. But education is such a type of subsidy that cannot be robbed by male members in the family. Secondly educated mother will further educate her children and thus will elp in mitigating the curse of illiteracy and poverty from the society. MICRO CREDIT is about much more than access to money. It is about women gaining control over the means to make a living. It is about women lifting themselves out of poverty and vulnerability. It is about women achieving economic and political empowerment within their homes, their villages, their countries. Micro-Credit and Women Empowerment “Millions of women in our hamlets know what unemployment means. Give them access to economic activities and they will have access to power and self-confidence to which they hitherto have been strangers. – Mahatma Gandhi Micro finance programmes for women are promoted not only as a strategy for poverty alleviation but for women’s empowerment as well (Mayoux, 1996). Since the early 1980s empowerment has become a key objective of development. Empowerment has been considered both an end and as a means of development. There has taken place a steady accretion of literature on the subject ever since the concept gained wide acceptance among academics and policy makers. Depending on the context concerned, empowerment is defined variously.

In our present context, empowerment may be defined ideally as ‘a continuous process where the powerless people become conscious of their situation and organise themselves to improve it and access opportunities, as an outcome of which women take control over their lives, set their own agenda, gain skills, solve problems and develop self-reliance*. Three different approaches have been identified by Batliwala (1994): (i) the integrated development approach (ii) the economic approach and (iii) consciousness-raising-cum-awareness approach.

They are not mutually exclusive and have the potential to be linked with one another. Where (i) and (ii) address the practical needs or material conditions of women, (iii) addresses the strategic needs or position of women. Consciousness and awareness raising approach has the potential to bring about long-lasting changes in the position of women and also other profound implications. The formation of Self-Help Groups is “not ultimately a micro-credit project but an empowerment process” (Micro-Credit Summit, 2001). The concept aims at empowering women and thus uplifting their families above the poverty ine. It is a gradual process resulting from interaction with group members through awareness and capacity building. Building capacity refers to the strengthening of ability to undertake economic, socio-cultural, and political activities, and enhance self-respect. Capacity to undertake economic activities includes ownership and control of productive resources and alternative employment opportunities at local levels. It has been proved that economic empowerment could have a positive impact in other spheres as well: enhanced social, legal, and political status.

Capacity to undertake socio-cultural activities encompasses ability to participate in non-family-group meetings, to interact effectively in the public sphere, to create mutual dependence and to ensure mobility and visibility. Capacity to undertake political activity includes ability to fight injustice, to organise struggles, and to create an alternate power structure at the local level. Within the SHG approach, empowerment is embedded at many levels. The impact of SHG on the various dimensions of women empowerment depends on the backwardness, prevailing cultural practices, and demographic profile of the area.

In this Section, we seek to examine the impact of SHGs and micro-credit on empowering poor women and their families. Here the empowerment framework developed at the various workshops organised by various international agencies engaged in Micro Finance Programmes (MFPs) and other donors has been adopted and modified to suit the context, the area of study, and the culture of the people. Education Empowers Women It is also observed that open education at present is mainly catering to the needs of elites in the urban areas and it has to make in roads in rural areas where India lives.

In rural areas women are totally dependent on men, as they do not have economic power to spend. The historical relationships with their husbands can be seen as influenced by historical factors that shape the social structures of how they are subordinated. It has been observed in several research studies that women do experience a double day, as they return to study combined with their domestic roles. The Policy planners must think to integrate the economic benefits with education. I suggest the Differential Rate of Interest (DIR) for women doing any Course through Open schools or any other mode of Open and Flexible learning.

It has been noted that education as such serves to empower women. This may be on the most basic level through literacy programmes or on more advance levels through university study and even Ph. D. programmes. A UNICEF study (1998) on Violence against women in South East Asia concluded that compulsory schooling for all girls would be a long-term measure to reduce violence against women by providing them qualifications as the basis for getting a job which in turn will enable them to earn a their own income and improve their status.

Thus the SHGs should in-fact also be converted in to Self Help Study Groups that will give them not only enhanced income but also enhanced esteem and self confidence to do something meaningful for the society as a whole. They should realize that they are not the isolated unproductive but important wheel for the smooth running of the society. The economic incentives and effective NGOs participation will definitely make the women empowerment a reality from a distant dream at present. REVIEW OF LITERTURE

From the early 1970s, women’s movements in a number of countries identified credit as a major constraint on women’s ability to earn an income and became increasingly interested in the degree to which poverty-focussed credit programmes and credit cooperatives were actually being used by women. SEWA in India, for example, set up credit programmes as part of a multi-pronged strategy for an organization of informal sector women workers. Since the 1970s, many women’s organizations world-wide have included credit and savings, both as a way of increasing women’s incomes and to bring women together to address wider gender issues.

The 1980s saw the emergence of poverty-targeted micro-finance institutions like Grameen Bank and ACCION and others. Many of these programmes see themselves as empowerment-oriented. In the 1990s, a combination of evidence of high female repayment rates and the rising influence of gender lobbies within donor agencies and NGOs led to increasing emphasis on targeting women in micro-finance Few studies are available on SHG and micro-finance and women empowerment. The researcher has tried to review the following: Micro-finance schemes alone can not alleviate poverty.

The battle for total eradication of poverty requires combining micro-finance schemes with parallel, complementary programmes addressing the social and cultural dimensions of want, privation, impoverishment and dispossession. in this study tried to discuss, analyse and answer the challenging questions as to why despite all the efforts and progress made, still there continues to be so much of gender discrimination and what strategies, actions and measures to be undertaken to achieve the expected goal of empowerment. omen’s empowerment is much more likely to be achieved if women have total control over their own organisations, which they can sustain both financially and managerially without direct dependence on others. SHGs are continuously striving for a better future for tribal women as participants, decision-makers and beneficiaries in the domestic, economic, social and cultural spheres of life. But due to certain constraints like gender inequality, exploitation, women torture for which various Self Help Groups are not organised properly and effectively. ow women entrepreneurs affect the global economy, why women start business, how women’s business associations promote entrepreneurs, and to what extent women contribute to international trade. It explores potential of micro-finance programmes for empowering and employing women and also discusses the opportunities and challenges of using micro-finance to tackle the feminisation of poverty. According to her, the micro-finance programmes are aimed to increase women’s income levels and control over income leading to greater levels of economic independence.

They enable women’s access to networks and markets, access to information and possibilities for development of other social and political role. They also enhance perceptions of women’s contribution to household income and family welfare, increasing women’s participation in household decisions about expenditure and other issues leading to greater expenditure on women’s welfare. The change in women’s contribution to society is one of the striking phenomena of the late twentieth century. According to him micro-credit plays an important role in empowering women.

Giving women the opportunity to realise their potential in all spheres of society is increasingly important. Micro-finance programmes have been very successful in reaching women. This gives micro-finance institutions an extraordinary opportunity to act intentionally to empower poor women and to minimise the potentially negative impacts some women experiences. To run the income generating activities successfully the SHGs must get the help of NGOs. The bank officials should counsel and guide the women in selecting and implementing profitable income generating activities.

He remarked that the formation of SHGs have boosted the self-image and confidence of rural women. 70 per cent of world’s poor are women. Access to poor to banking services is important not only for poverty alleviation but also for optimising their contribution to the growth of regional as well as the national economy. Self Help Groups (SHGs) have emerged as the most vital instrument in the process of participatory development and women empowerment. The rural women are the marginalized groups in the society because of socio-economic constraints.

They remain backward and lower position of the social hierarchical ladder. They can lift themselves from the morass of poverty and stagnation through micro finance and formation of Self-Help Groups. A paradigm shift is required from “financial sector reform” to “micro-finance reform”. While the priority sector needs to be made lean, mandatory micro credit must be monitored rigorously. Simultaneously space and scope have to be properly designed for providing competitive environment to micro-finance services.

Extensive database needs to be created by the RBI for understanding micro-finance. micro-finance is making a significant contribution to both the savings and borrowing of the poor in the country. According to him the main use of micro-credit is for direct investment. There is of course some fungibility, depending on household credit requirements at the time of loan disbursement. Some studies reveal that micro-finance programmes have had positive as well as negative impacts on women. Some researchers have questioned how far micro-finance benefits women.

Some argue that micro-finance programmes divert the attention of women from other more effective strategies for empowerment, and the attention and the resources of donors from alternative, and possibly more effective means of alleviating poverty. In some cases women’s increased autonomy has been temporary. It only benefits women who are already better off. But in most cases the poorest women are least able to benefit because of their low initial resources base, lack of skill and market contact. Women in Development planning in India

The importance of the role of women in development had been recognized by the government of India right from the very first plan (1951-56). However, women in these earlier plans were treated as subjects of ‘welfare’ and clubbed together under the category of disadvantaged groups such as destitute, disabled, aged, etc. The Second to Fifth Plans (1956-79) i. e. all the plans till the early 70s thus continued to reflect the very same welfare approach, besides giving priority to women’s education, and launching measures to improve maternal and child health services, supplementary feeding for children and expectant and nursing mothers.

The Central Social Welfare Board (CSWB), set up in 1953, served as an Apex Body at the national level to promote voluntary action at various levels, especially at the grassroots, to take up these welfare-related activities for women and children. Women as Partners in Development By the beginning of the seventies, there was growing anxiety that development was not proceeding as planned. Prominent among the several reasons identified as the cause for the slow pace of development, was the fact that women had not been participating actively in the process.

It was pointed out that economic growth had suffered because women’s role in the economy had been neglected and because their capabilities were neither fully developed nor utilized. In this connection, the failure to provide them with career and employment-oriented education was particularly blamed. With illustrations of successes and failures in the development effort, it was convincingly shown that the involvement of women, both as paid functionaries and as volunteers, at different levels, is critical to the success of the country’s population control, health care and community development programmes.

It was underlined that women must be urgently equipped with the capabilities required for them to take up these new responsibilities. These revelations and recommendations gave birth to the concept of women as “partners” in development and took the issue of the importance of their education to a new threshold. However, it was after the early Seventies, that there was a gradual shift in the approach from `welfare’ to `development’, which started recognizing women as important participants of the developmental process.

The shift which took place in the international development thought affected the national plans too. The various international UN conferences on Women about which we spoke earlier in which India was a participant helped to alter these approaches In 1971, in response to a request from the United Nations, the government of India appointed a Committee on the Status of Women in India (CSWI) to examine all questions relating to the rights and status of women in the context of changing social and economics conditions in the country.

The Committee’s comprehensive report named “Towards Equality” saw a significant change in the government’s policies for women. Women were now no longer viewed as targets of welfare policies but as critical groups for development. This was reflected in the 6th Five Year Plan (1980-85) where strategies for women’s employment & economic independence, education, health care and family planning and the creation of a supportive legal and institutional environment were conceived. It was for the first time that the Planning Commission included a separate chapter on ‘Women and Development’ in the Sixth Five Year plan.

Accordingly, the Sixth Plan adopted a multi-disciplinary approach with a special thrust on the three core sectors of health, education and employment In the Seventh Plan (1985-90), the developmental programmes continued with the major objective of raising the economic and social status of women and bringing them into the mainstream of national development. A significant step in this direction was the identification and promotion of the ‘Beneficiary-Oriented Schemes’ (BOS) in various developmental sectors, which extended direct benefits to women.

The thrust on generation of both skilled and unskilled employment through proper education and vocational training continued In the year 1985, the Department of Women and Child Development was set up as a part of the Ministry of Human Resource Development. ‘As the national machinery for the advancement of women and children, the Department formulates plans, policies and programmes ; enacts/ amends legislation, guides and coordinates the efforts of both governmental and non-governmental organisations working in the field of Women and Child Development’.

Besides this, the department plans and implements certain innovative programmes for women and children. The Department has also been implementing the Integrated Child Development Services (ICDS), providing a package of services comprising supplementary nutrition, immunization, health check up and referral services, pre-school non-formal education.

The major policy initiatives undertaken by the Department in the recent past include the establishment of the National Commission for Women (NCW), Rashtriya Mahila Kosh (RMK), adoption of National Nutrition Policy (NNP), universalising and strengthening of ICDS, setting up of National Creche Fund (NCF), launching of Indira Mahila Yojana (IMY) and Balika Samriddhi Yojana (BSY) and Rural Women’s Development and empowerment project (RWDEP

In 1992, the National Commission for Women was set up to investigate and review matters relating to safeguards for women and also to act as an agency for redressal of their grievances. India has also ratified various international conventions and human rights instruments committing to secure equal rights of women. Key among them is the ratification of the Convention on Elimination of All Forms of Discrimination Against Women (CEDAW) in 1993.

Two important schemes launched in 1993 were Mahila Rashtriya Kosh, the women’s national fund, to meet the credit needs of women, and Mahila Samridhi Yojna to inculcate the habit of thrift among rural women. The task of creating a sense of awareness, particularly among the rural women, to enable them to become active participants in the process of social transformation and regeneration has been entrusted to the Indira Mahila Yojna. Thus, empowerment of women and development of children gained priority in the country’s development agenda. Mahila Samkya

Mahila Samakhya (MS) was launched in 1989-89 as a pilot programme in 10 districts of the States of UP, Gujarat and Karnataka and is now functioning in 60 backward districts in the country covering over 9000 villages in 10 states. The genesis of MS can be traced to the National Policy on Education, 1986, a landmark in the field of policy on women’s education in India MS was another important step towards women empowerment. It not only aims at service delivery, but also seeks to bring about a change in women’s perception about themselves and that of society with regard to women’s traditional roles.

It endeavors to create an environment for women to seek knowledge and information in order to make informed choices and create circumstances in which women can learn at their own pace and rhythm. The centrality of education in the struggle to achieve equality is an important focus of Mahila Samakhya. This programme is conceived as “empowerment through education” and is part of the programme of the ministry of education The Eighth Plan (1992-97), with human development as its major focus, played a very important role in the development of women.

The Eighth Plan promised to ensure that benefits of development from different sectors did not by-pass women, the 8th plan implemented special programmes to complement the general development programmes and to monitor the flow of benefits to women from other development sectors that enabled women to function as equal partners and participants in the development process The Ninth Plan (1997-2002) which is in the post-Beijing period made two significant changes in the conceptual strategy of planning for women.

Firstly, ‘Empowerment of Women’ became one of the nine primary objectives of the Ninth Plan. The WCP emerged as part of this strategy for the empowerment of women “In the 9th plan, the Planning Commission, with a view to converge the benefits in the social and economic development sectors for women had requested all the Secretaries of the various Ministries and Departments of the Government of India to draw up a Women’s Component Plan to identify allocation in all the sectors at the Centre by aggregating them in an integrated manner.

In this context, the Minister for Human Resource Development had requested all the Ministers for their personal intervention in the matter of inclusion of an identifiable Women Component Plan in the programmes of the respective Ministries/Departments right from the planning process and thereafter to monitor allocations and implementation of programmes to ensure the reach of benefits to women.

The Cabinet approved one of the recommendations of the National Perspective Plan for Women (1998-2000), which says that the Planning Commission and all the Ministries/ Departments should have a women cell and the annual Reports of all the Ministries/ Departments at the Central and State levels should document and review the work done concerning women.

The Department, accordingly, requested all the Ministries/Departments to set up advisory committees for women in each sector to help in the preparation, monitoring and implementation of the Women Component Plan, to set up a women’s cell, to set up gender focal point and to include a chapter on Women Component Plan in their annual reports” The 9th Plan adopted the Life Cycle approach for empowerment of women which categorizes women into 5 distinct sub-groups (population as projected for 2001).

They include: • Girl children in the age-group 0-14 years who account for 171. 50 million (34. 6 percent), deserve special attention because of the gender bias and discrimination they suffer from at such a tender age; • Adolescent girls in the age-group 15-19 years who account for 52. 14 million (10. 5 per cent) are very sensitive from the viewpoint of planning because of the preparatory stage for their future productive and reproductive roles in the society and family, respectively; • Women in the reproductive age-group 15-44 years numbering 233. 2 million (47. 1 per cent) need special care and attention because of their reproductive needs; • Women in the economically active age group 15-59 years, who account for 289. 40 million (58. 4 per cent), have different demands like those of education/ training, employment, income generation and participation in the developmental process, decision making etc. ; and • The elderly women in the age-group 60+years numbering 34. 87 million (7. 0 percent), have limited needs mainly relating to health, financial and emotional support.

The approach of the Ninth Plan was also to create an enabling environment where women could freely exercise their rights both within and outside home, as equal partners along with men. This was reflected in the early finalisation and adoption of the `National Policy for Empowerment of Women’, which laid down definite goals, targets and policy prescriptions along with a well defined ‘Gender Development Index’ to monitor the impact of its implementation in raising the status of women from time to time. Secondly, the Plan attempted `convergence of existing services’ available in both women-specific and women related sectors.

To this effect, it directed both the centre and the states to adopt a special strategy of ‘Women’s Component Plan’ (WCP) through which not less than 30 per cent of funds/benefits flow to women from all the general development sectors. The operational strategy of 9th plan directs all the central Ministries and state departments to draw up Time –Bound Action plans for women. This is with the aim of translating the policy into a set of concrete actions through a participatory process of consultations with both the governmental & nongovernmental sectors. Strategies To create an enabling environment for women to exercise their rights, both within and outside home, as equal partners along with men through early finalization and adoption of “National Policy for Empowerment of Women” • To expedite action to legislate reservation of not less than 1/3 seats for women in the Parliament and in the State Legislative Assemblies and thus ensure adequate representation of women in decision making • To adopt an integrated approach towards empowering women through effective convergence of existing services, resources, infrastructure and manpower in both women specific and women related sectors • To adopt a special strategy of “Women‘s Component Plan” to ensure that not less than 30 percent of funds/benefits flow to women from other developmental sectors • To organize women into Self help groups and thus mark the beginning of a major process of empowering women • To accord high priority to reproductive child health care • To universalize the on-going supplementary feeding programme- Special Nutrition Programme (SNP) and Mid Day Meals(MDM) • To ensure easy and equal access to education for women and girls through the commitments of the Special Action Plan of 1998 • To initiate steps to eliminate gender bias in all educational programmes • To institute plans for free education for girls up to college level, including professional courses • To equip women with necessary skills in the modern upcoming trades which could keep them gainfully engaged besides making them economically independent and self-reliant • To increase access to credit through setting up of a ‘Development Bank for Women Entrepreneurs in small and tiny sectors

An integrated approach adopted in the Ninth Plan works towards empowering women through convergence of existing services, resources, infrastructure and manpower available in both women-specific and women-related sectors with the ultimate objective of achieving the set goal. It also suggests a special vigil to be kept on the flow of the earmarked funds/benefits through an effective mechanism to ensure that the proposed strategy brings forth a holistic approach towards empowering women. While organising women into Self-Help Groups marks the beginning of a major process of empowering women, the institutions thus developed intend to provide a permanent forum for articulating their needs and contributing their perspectives to development.

Recognising the fact that women have been socialized only to take a back seat in public life, affirmative action through deliberate strategies will be initiated to provide equal access to and control over factors contributing to such empowerment, particularly in the areas of health, education, information, life-long learning for self development, vocational skills, employment and income generating opportunities, land and other forms of property including through inheritance, common property, resources, credit, technology and markets etc. To this effect, the newly elected women members and the women Chairpersons of Panchayats and the Local Bodies will be sensitized through the recently launched special training package to take the lead in ensuring that adequate funds/benefits flow towards the empowerment of women and the girl child. The Finance Minister in his Budget Speech of 2000-01 had announced that the year 2001 will be observed as “Women Empowerment Year”. He had also announced setting up of a Task Force to chalk out specific programmes for observing the year 2001 as “Women Empowerment Year”.

The announcement has been made in the context of an urgent need for improving the access of women to national resources and for ensuring their rightful place in the mainstream of economic development. The Government stated that it is committed to improve the status of women in India and towards this end, apart from the Constitutional guarantees; several schemes and programmes have been planned and executed from time to time. The declaration of the year 2001 as the “Women’s Empowerment Year” is therefore, significant as it reiterates the Government’s commitment to bring about equality for women in all walks of life. The objective of the Women’s Empowerment Year was to create large-scale awareness with the active participation of women themselves.

The Department proposed to launch yearlong activities to bring about a change in the environment, which will be conducive to develop self-confidence and assertiveness among women and children, especially girls. A special taskforce was created to plan and execute programmes to observe the year and the national policy was declared The National Policy for the Empowerment of Women reflected these important changes and concepts introduced in the Ninth Plan. This is clearly reflected in the goals and objectives of the policy NATIONAL POLICY FOR THE EMPOWERMENT OF WOMEN (2001) Goal and Objectives The goal of this Policy is to bring about the advancement, development and empowerment of women. Specifically, the objectives of this Policy include i) Creating an environment through positive economic and social policies for full development of women to enable them to realize their full potential (ii) The de-jure and de-facto enjoyment of all human rights and fundamental freedom by women on equal basis with men in all spheres – political, economic, social, cultural and civil (iii) Equal access to participation and decision making of women in social, political and economic life of the nation (iv)Equal access to women to health care, quality education at all levels, career and vocational guidance, employment, equal remuneration, occupational health and safety, social security and public office etc. v) Strengthening legal systems aimed at elimination of all forms of discrimination against women (vi)Changing societal attitudes and community practices by active participation and involvement of both men and women. (vii) Mainstreaming a gender perspective in the development process. (viii) Elimination of discrimination and all forms of violence against women and the girl child; and (ix) Building and strengthening partnerships with civil society, particularly women’s organizations. The 10th plan further goes on to strengthen the specific goals and objectives focused on the Empowerment of Women as is clear from the approach to the 10th plan APPROACH TO THE TENTH PLAN

In the context of having a laid down National Policy, approach to the Tenth Plan for empowering women is expected to be very distinct from that of the earlier Plans, as it now stands on a strong platform for action with definite goals, targets and a time-frame. Further, as the process of empowering women initiated during the Ninth Plan is expected to continue through and beyond the Tenth Plan, there can be no better approach than translating the National Policy for Empowerment of Women (2001). The Operational strategy, as prescribed in the Policy, directs all the Central Ministries and State Departments to draw up Time-Bound Action Plans for translating the Policy into a set of concrete actions through a participatory process of consultations with all the concerned, both in the governmental and non-governmental sectors.

Accordingly, the first step in this direction will be to prepare a National Plan of Action for implementation of the Policy by the nodal Department of Women and Child Development through identifying its partners; specifying Action Points in all the women-related development sectors; developing an in-built mechanism for effective co-ordination and monitoring of the implementation of the Policy; besides evaluating/assessing the impact of the implementation of Policy in improving the status of women, based on a Gender Development Index. COMMITMENTS OF THE TENTH PLAN TO EMPOWER WOMEN The Approach To continue with the major strategy of ‘Empowering Women’ as Agents of Social Change and Development Strategies • To adopt a Sector-specific 3-Fold Strategy for empowering women, based on the prescriptions of the National Policy for Empowerment of Women. They include : Social Empowerment – to create an enabling environment through various affirmative developmental policies and programmes for development of women besides providing them easy and equal access to all the basic minimum services so as to enable them to realize their full potentials. • Economic Empowerment – to ensure provision of training, employment and income-generation activities with both ‘forward’ and ‘backward’ linkages with the ultimate objective of making all potential women economically independent and self-reliant; and • Gender Justice – to eliminate all forms of gender discrimination and thus, allow women to enjoy not only the de-jure but also the de-facto rights and fundamental freedom on par with men in all spheres, viz. political, economic, social, civil, cultural etc. Strengthening Women’s Component Plan

To make the implementation of the Women’s Component Plan (WCP) more effective to ensure flow of adequate funds/benefits to women from all other developmental sectors, the Tenth Plan will ensure not only defining the concept of WCP clearly, but would also go a step further in identifying the schemes and programmes of various Ministries/ Departments, which should be covered under WCP. Efforts will also be made to see the possibility of maintaining a sub-head for WCP under the relevant major head of the respective programme, just as it is done in the case of SCP for SCs and TSP for STs. No re-appropriation from WCP to the other schemes will be permitted without the prior approval of the Department of Women and Child Development. Adoption of Gender Budgeting While taking note of the efforts initiated during the Ninth Plan towards ensuring a gender just/gender-sensitive budget, the Tenth Plan will continue the process of dissecting the Government budget to establish its gender-differential impact and to translate gender commitments into budgetary commitments. The Tenth Plan will initiate immediate action in tying up these two effective concepts of WCP and Gender Budgeting to play a complementary role to each other, and thus ensure both preventive and post-facto action in enabling women to receive their rightful share from all the women-related general development sectors.

More than the quantum or percentage of outlays, what is more important for empowering women is ensuring that the funds from various developmental sectors are effectively converged, properly utilised and monitored. This will be done through a systematic process of identifying the existing gaps in services proceedings related to violence and atrocities against girls and women; iv) Women’s cell in Police Stations, Women Police Stations, Family Courts, Mahila Courts, Counselling Centres, Legal Aid Centres and Nyaya Panchayats will be strengthened and expanded to eliminate violence and atrocities against women; and v) widespread dissemination of information on all aspects of legal rights, human rights and other entitlements of women, through specially designed legal literacy manuals and programmes. Statement of the problem

Right from the mid-eighties of the past century micro-finance has become a key strategy for poverty alleviation and empowerment of women. Though NGOs were the forerunners in this field, the early nineties marked a new era for micro-finance programmes in the State with the evolution of the Community Development Society (CDS) model women groups . There is a general tendency to consider SHGs as a panacea for all the ills of the rural community. This is evident from the mushroom growth of self-help groups in the State. In many cases it has been a blind replication of success models without considering the intricacies involved in group formation and sustainability.

Hence, the present study is undertaken to enquire into the performance of women groups commonly known as Self-Help Groups (SHGs) and Neighbourhood Groups (NHGs) and to identify the factors contributing to their failure or success so that the strategy may be replicated effectively for empowering women. . Difficulties of micro-enterprise: ? The gender dimension One of the most fundamental problems with micro-credit programmes is the difficulty in actually turning a profit on the loans. In the first place, borrowers must bear not just the cost of the loan and interest payments, they must also invest a significant part of their time in group activities mandated by their programmes. The loans usually finance some type of traditional ‘women’s work’ (such as papad-making or weaving and sewing) which is not seen as fit for men to do.

This leads women to rely on their female children for supplemental labour, and thus female children are under increased pressure to stay out of school so that they can help contribute to the family income. Studies have found that women value wage employment over credit because of stability and a collective workspace which provides information and solidarity. The status and material benefits of income wage employment are more likely to promote economic and social empowerment as women have a greater degree of control over the money they earn in employment. Also, all investments may not return a profit. In this event the money to repay the loan must come from reduced consumption or borrowing from some other source, usually on worse terms.

Activists in Rajasthan have demonstrated how women take loans from village moneylenders at exorbitant rates to pay off loans from SHGs. Another problem is the capture of the loans by male relatives. In some cases, male relatives use female borrowers as fronts to get relatively low interest loans. These loans may or may not be used to benefit the family, and the female borrowers rarely see any benefit at all. And yet, the women are still held responsible for repayment of the loans. In fact, the chances of a female-headed enterprise succeeding at all are often quite small in situations where women do not have access to — leave aside control of – markets.

In fact, as micro-credit programmes become more successful and hand out more loans, more people enter the local marketplace as micro-entrepreneurs. Nan Dawkins Scully of t he Women’s Micro-credit Accountability Network (WOMAN) writes that “the cumulative effect of rising costs, declining demand, and competition from both cheap imports and increased entrants into the sector leads to shrinking profits in informal-sector trade”. In other words, the initial success of micro-enterprises can lead to subsequent over-competition problems, especially when international trade liberalisation is factored into the equation. A few micro-entrepreneurs in a given area may be able to turn a profit. A large number probably cannot.

A related problem is the durability of poverty reduction. Infusions of cash in almost any amount are bound to have some effect on the poverty-stricken borrowers. But this does not necessarily mean that the effect will be permanent. “D onors and advocates consistently over-exaggerate the power of micro-enterprise credit and related assistance, while ignoring key structural issues that are far more pertinent to the long-term problem of women and poverty i. e. , agrarian reform, programmes favouring export production (typically male-dominated) over subsistence crops (typically female-dominated), and trade agreements structured in the interests of transnational corporations. The cumulative effect of rising costs, declining demand, and competition from both cheap imports and increased entrants into the sector leads to shrinking profits in informal-sector trade, says Scully. ? Inability to reach the poorest of the poor A second important drawback to micro-credit programmes is that they don’t reach the poorest members of society. The poorest have a number of constraints — fewer income sources, worse health and education — which prevent them from investing the loan in high-return activity. It has also been found that the poorest need tiny loans which are not cost-effective even for micro-credit programmes. This section also places the greatest demands on micro-credit training programmes, which makes the cost of lending even higher.

As researcher Linda Mayoux notes, as micro-credit programmes are pressured to become more self-sufficient, the incentive to lend to such desperately poor borrowers evaporates. Four years ago, the United Nations was blunt in a report by Secretary General Kofi Annan to the General Assembly. “A certain sense of proportion regarding micro-credit would seem to be in order,” the report said. It added that lending to the poor had to be accompanied by training, information and access to land, among other things. “In some of the lowest-income countries, lack of access to land is the most critical single cause of rural poverty,” the United Nations said. ? Micro-credit dependency Another possible failure of micro-credit programmes lies behind the statistics.

Some researchers have proposed the idea that the high repayment rates, repeated borrowing, and low drop-out rates indicate a dependency on micro-credit programmes rather than an attraction to successful micro-credit programmes on the part of poor borrowers. Many borrowers have no alternative to borrowing from micro-credit programmes, and consequently cannot afford to default. Neither can they afford to stop borrowing or drop-out of the programmes. In order to stay in good standing with the micro-credit programme, borrowers may even be forced to resort to pawnbrokers or other alternative sources of funding. This is a significant failure, since micro-credit programmes tout themselves as more progressive alternatives to the existing systems of informal credit which could be exploitative, such as share-cropping, debt bondage, and so on.

The current wave of euphoria over micro-credit misses the salient question: Since a majority of people have neither the skills nor the inclination to be entrepreneurs, why are micro-enterprises proliferating? It has been clear for decades that the informal sector is a depository for the victims of the failure of the formal sector. As long as micro-enterprise development is offered as a substitute for meaningful social development, for employment that offers real security, for viable small-farm and enterprise production, and for fundamental changes in the economic policies prescribed by institutions such as the World Bank and IMF, it will only impede progress toward finding real answers to the very real problem of poverty in the South. Some other problems Many elements contribute to make it more Difficult for women empowerment through micro businesses. These elements are: • Lack of knowledge of the market and potential profitability, thus making the choice of business difficult. • Large magnitude of the target group of poor women • Attitudinal rigidities • Difficulty in creating awareness among women • Large requirements of training and sensitization of issues • Limited number of experienced intervention agencies • Lack of capital. • High interest rates. • Inventory and inflation accounting is never undertaken. Micro-credit in India: The early years Micro-credit is not a new idea in India.

Research conducted in India by t he National Bank for Agriculture and Rural Development ( NABARD) during the early-’80s showed that despite a wide network of rural bank branches which implemented specific poverty alleviation programmes that sought creation of self-employment opportunities through bank credit for almost two decades, a very large number of the poor continued to remain outside the fold of the formal banking system. NABARD had been set up in 1982 under an Act of Parliament as a development bank to provide and regulate credit and other facilities for the promotion and development of agriculture, cottage and village industries, handicrafts and other allied economic activities in rural areas with a view to “promoting integrated rural development and securing prosperity of rural a Rural development, special schemes and rural banking could not tackle the widespread poverty in rural areas.

Research indicated that existing banking policies and procedures were perhaps not suited to the immediate needs of the very poor. What they really needed was better access to these services and products, rather than cheap, subsidised credit. The priority of the rural poor appeared to be consumption credit, savings, production credit and insurance. Consumption needs included credit for short periods for emergent needs, which were usually met by informal sources at exploitative interest rates, as poor borrowers were unable to offer banks any security for small consumption loans. Banks in turn faced constraints due to the high transaction costs involved in processing small amounts to borrowers scattered in rural areas, as well as concerns related to loan recovery.

Against this background, a need was felt for alternative policies, systems and procedures, savings and loan products, complementary services, and new delivery mechanisms which would fulfil the requirements of the poorest, especially of the women members of such households. The Grameen Bank in neighbouring Bangladesh had already proved a successful model of microlending in South Asia. The self-help group model, pioneered by the Grameen Bank, emerged as a viable strategy to tackle these issues – both for borrowers as well as banks. . What This Paper Is Not This paper is not meant to be a comprehensive and exhaustive presentation of all that is known about the subject of microfinance and empowerment.

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