Empowering women through micro finance

Finance

1. CONTENTS INTRODUCTION WHY TARGETING WOMEN? MICRO-FINANCE GENDER FOCUS IN MICRO-FINANCE REPAYMENT RATES ROLE IN WOMEN EMPOWERMENT MICRO-FINANCE INSTRUMENTS MICRO-FINANCE INSTITUTIONS BENEFITS AND CHALLENGES CASE STUDY

2. INTRODUCTION Women Empowerment refers to increasing the spiritual, political, social, educational, gender, or economic strength of individuals and communities of women. Women’s empowerment in India is heavily dependent on many different variables that include geographical location (urban/rural), educational status, social status (caste and class) and age.

3. WHY TARGET WOMEN

4. NEED FOR WOMEN EMPOWERMENT Women are deprived of: Decision making power Freedom of Movement Access to Education Access to Employment Exposure to Media Domestic Violence

5. Microfinance is a type of banking service that is provided to unemployed or low income individuals or group who have no access to financial service. Institutions participating in the area of microfinance are most often associated with lending microloans. Delivery is normally through Self Help Groups (SHG). It is not just a financing system, but a tool for social change, specially for women below the poverty line. The loan is provided at the lowest possible rates to women entrepreneurs. Women are provided proper training on business and entrepreneurial skills.

6. GENDER FOCUS IN MICRO FINANCE Many microfinance programs focus entirely on women because of various assumptions: Women are important in poverty alleviation and hence for economic development Women form a large proportion of the poor Women spend more of their income on their families and hence a focus on women improves the welfare of the whole family. A focus on women empowers women.

7. CURRENT STATUS OF MICRO FINANCE 800 MFIs are working in India. As on today 8 Million SHGs are linked to banks. 6.29 million SHGs are exclusively for women. Particulars 2010-11 2011-12 2012-13 2013-14 No. of SHGs (lakh) Amt. (crore) No. of SHGs (lakh) Amt. (crore) No. of SHGs (lakh) Amt. (crore) No. of SHGs (lakh) Amt. (crore) Savings 45.64 44.43 53.10 44.98 60.98 5298 62.99 5104 Bank Loan Disbursed 13.75 10527 12.94 12429 10.17 12622 9.23 14132 LOANS ISSUED TO WOMEN SHGs BY BANKS

8. REPAYMENT RATES Women are better about repaying loans. According to studies, 15.3% of male borrowers struggled to repay loans, while only 1.3% of women were having difficulties. Female borrowing groups misuse funds less often. The choice of investment projects, such as tending to goats, sewing, baking goods, handcrafts or keeping a small shop may be easier to monitor.

9. ROLE IN WOMEN EMPOWERMENT Women have been the vulnerable section of society and constitute a sizeable segment of the poverty-struck population and face gender specific barriers to access education health, employment etc. Since women’s empowerment is the key to socio economic development of the community; bringing women into the mainstream of national development has been a major concern of government. The ministry of rural development has special components for women in its programs. Funds are earmarked as “Women’s Component” to ensure flow of adequate resources for the same.

10. CONT.. 87% women affirmed that, through microfinance, they were able to increase their household income. Also, 20% of women claimed that through microfinance they were able to provide better opportunities for their children, main educational and 13% advanced the fact that they were able to secure the basic living needs of their families without the financial assistance or help of their husbands, Improved social life is another strong point for microfinance in favor of women entrepreneurs in general.

11. MICRO FINANCE INSTRUMENTS FOR WOMEN’S EMPOWERMENT Micro Finance 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) – Bank Linkage Programme, aimed at providing a cost effective mechanism for providing financial services to the “unreached poor”. Perception for women is that learning to manage money and rotate funds builds women’s capacities and confidence to intervene in local governance beyond the limited goals of ensuring access to credit. Further, it combines the goals of financial sustainability with that of creating community owned institutions.

12. MICROFINANCE INSTITUTIONS FOR WOMEN SKS Microfinance Bandhan Share Microfin Limited Asmitha Microfin Spandana Sphoorty Micro Credit Grameen Financial SOURCE: Crisil Report

13. OBSTACLES IN WOMEN EMPOWERMENT

14. CHALLENGES Lack of working capital High interest rates Lack of knowledge of market and potential profitability, thus making the choice of business difficult. Inventory and inflation accounting is never undertaken Credit policies that can gradually ruin their business(many customers cannot pay cash and suppliers are very harsh towards women).

15. OVERCOMING CHALLENGES Creating the Importance of Entrepreneurship program and skills training, and Micro Financial support under single roof. MFIs provide their microfinance clients different set of skills for successfully running enterprises. Encouraging women entrepreneur to utilize the loans for productive purposes and have the potential to become entrepreneur. Establishing a network of SHG to serve as a “self-help community” for micro enterprises development activities. Social recognition of women leading an enterprise. Developing female mentors, trainers and advisors. Establishing sources of credit.

16. WOMEN EMPOWERMENT IN INDIA Earlier there were 3 Ks Kitchen Kids Knitting Then came 3 Ps Powder Papad Pickles At present there are 5 Es Electricity Electronics Engineering Entrepreneurship Energy

17. Shri Mahila Griha Udyog Lijjat Papad Type Worker cooperative Industry Papads , soaps and detergents, bakery products, masala  (spices) and flour Founded Mumbai, Maharashtra (15 March 1959) Headquarters Mumbai, India Key people Swati Paradkar, President No. of employees 43000 (2015) Website www.lijjat.com

18. SHRI MAHILA GRIHA UDYOG LIJJAT PAPAD An Indian women's cooperative involved in manufacturing of various fast-moving consumer goods. The organization's main objective is empowerment of women by providing them employment opportunities. Started in the year 1959 with a seed capital of Rs. 80. Today, Lijjat has an annual turnover of around Rs. 6.50 billion with Rs. 290 million exports and provides employment to around 43,000 people. Lijjat is headquartered in Mumbai and has 81 branches and 27 divisions all over India. Lijjat is primarily a cottage industry, urban by its origin, which has spread to the rural areas.

19. Women Empowerment refers to increasing the spiritual, political, social, educational, gender, or economic strength of individuals and communities of women. The greatest need of hour is to change the social attitude of women. The goal of microfinance is to give people an opportunity to become self-sufficient by getting self- employment, especially the women. Women are better about repaying loans According to studies,15.3% of male borrowers struggled to repay loans, while only 1.3% of women were having difficulties.

20. CONT.. Women’s empowerment is the key to socio economic development of the community. 87% women affirmed that, through microfinance, they were able to increase their household income. Micro Finance is emerging as a powerful instrument for poverty alleviation in the new economy. It is considered as one of the most remarkable entrepreneurial initiatives by women that is identified with female empowerment in India.

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