Microfinance Definition

Introduction

Microfinance is the provision of financial services to low-income clients, including consumers and the self-employed, who traditionally lack access to banking and related services. Microcredit, or microfinance, is banking the unbankables, bringing credit, savings and other essential financial services within the reach of millions of people who are too poor to be served by regular banks, in most cases because they are unable to offer sufficient collateral. In general, banks are for people with money, not for people without.”. The goal of microfinance is to give low income people an opportunity to become self-sufficient by providing a means of saving money, borrowing money and insurance.

The main aim of microfinance is to empower women. Women make up a large proportion of microfinance beneficiaries. Traditionally, women have been unable to readily participate in economic activity. Microfinance provides women with the financial backing they need to start business ventures and actively participate in the economy. Most of the microcredit institutions and agencies all over the world focuses on women in developing countries. There are many reasons why women have become the primary target of microfinance services. Observations and experience shows that women are a small credit risk, repaying their loans and tend more often to benefit the whole family. In another aspect it´s also viewed as a method giving the women more status in a socioeconomic way and changing the current conservative relationship between gender and class when women are able to provide income to the household.

There are two core models for microfinance in India:

• The self-help group model, groups of about a dozen women in a village pool their savings, and...

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...on are taken for study. Apart from this NGO, we have also done survey in SHGs of some nearby villages of Roorkee block in Haridwar district. Areas covered under the study are:

1. Madhopur Village

2. Lingareddipalayam

3. Thirukanur

4. Solai nagar

5. Kakilapatu

6. Chettipet

Sampling Method

Judgemental sampling and random sampling is followed. Since the members are large in number they are divided by groups and randomly selected for data collection.

Sample Size

50 samples have been collected for the research from all the five rural areas of Haridwar region.

Statistical tools used

Simple correlation coefficient, paired t test, cross tabulation and percentage analysis has been used to analyze and interpret the data.

Method of Data Collection

A structured schedule was prepared and used for collecting data from the rural SHG women members.