The purpose of this study is to gain meaningful insights into a microfinance programme in two different agro-ecological settings in India. The study, using primary survey data, attempts to examine individual, household and environmental characteristics that determine participation in a self-help group (SHG)–bank linkage programme in Odisha.
Primary data are collected by a stratified random sampling method. The sample size is 300 households and information is collected by canvassing a pre-designed schedule to women through door-to-door in-depth interviews. In addition, focus group discussions have been conducted to get qualitative information. A probit binary model is applied to examine the factors determining participation in a SHG–bank linkage programme. A composite index of women empowerment is computed taking three dimensions: autonomy, economic empowerment and the gender relationship. Further, ordinary least square multiple regression and treatment effect evaluation by propensity score matching is carried out to study the impact of participation on women empowerment.
The study finds that the programme has by-passed the poorest of the poor. It is observed, however, that participation in microfinance has a positive and significant impact on women empowerment.
Given the research methodology adopted in this study, one concern is whether the results generalise. Therefore, researchers are encouraged to test the proposed propositions further.
To improve status of women particularly in developing and underdeveloped regions, microfinance can act as a catalyst.
Microfinance in the form of SHG–bank linkage should be promoted, particularly for those social groups and religious communities where women are discriminated. Their participation in SHG–bank linkage programme will improve their social status through empowerment.
This study illustrates how microfinance can improve the status of women.
