Microcredit for Women in India
Micro-finance institutions (MFIs) have come a long way in lending a helping hand to the economically underprivileged and not so credit worthy customers, thanks to the inception of Grameen Bank. Microcredit is strongly associated with women empowerment in rural India. The accessibility to microcredit has transformed the lives of scores of women who looked beyond their homes and usual chores. It is a financial innovation which has successfully enabled women in poverty to engage in self-employment and income generating projects. To put it simply, it is the extension of loans to people not considered as bankable, due to lack of collateral, steady employment and a verifiable credit history, on the foundation of group assurance and collective decision making.
Asmita, established in 2002 at Hyderabad has been providing collateral free loans to rural women, thus enabling them to set up small businesses. Bandhan, a Kolkata-based institution work with women who are socially disadvantaged and economically underprivileged. The classic case of women being efficient loan re-payers can be seen in Hyderabad-based Spandana Sphoorty. They have established benchmarks in operational efficiencies and cost management. The first loan was disbursed to a rag picker woman, who not only repaid the loan in time, but also spread the word about existence of such an institution among other women folk.
Statistics have proved that repayment rate is very high among women borrowers. Robust repayment rates among female borrowers make them less risky to defaults. According to experts, women borrowers are more prudent when it comes to using money received as debt and repayment rates are as high as 99.5% among women borrowers. They are more likely to avoid risky ventures and instead use loans to undertake small, manageable activities.
Studies have confirmed that women spend more of their income on families than men. Rural women, being submissive, often compromise their independence and rights. Self-employment through micro loans gives a morale boost to them. They will be self-reliant to the extent of running their own ventures and their own lives. Also, they will develop a sense of self-worth and involve in taking vital decisions for the household.
MFIs and micro-loans have a long way to go in the emancipation of rural poor. However, it is high time that we bridge the gap in the gender disparity by offering more credits to women. Assisting women will generate a multiplier effect which can enlarge the impact of these institutions’ activities. As an old adage goes, “When we offer a helping hand to one woman, it is the entire family which benefits.”