An Impact Assessment of Microfinance: A Case Study of Socio-Economic Empowerment of SHG Members in Manipur (India)

Abstract

PurposeMicrofinance holds a big promise to generate income and employment and alleviate poverty in developing countries. NGOMFIs have significant contribution in building capacity of SHGs and shaping them to grow for self sustainable. This paper attempts to assess the economic empowerment of SHGs, the social empowerment of SHGs and the overall socio-economic empowerment of SHGS due to microfinance intervention of NGO-MFIs in Manipur State which is in the North-Eastern corner of India. Design/methodology/approachA sample size of 120 SHG members of 60 SHGs from 20 NGOs is considered for the study. Socio-economic empowerment index before and after microfinance intervention is used for assessing the socio-economic empowerment of SHG members. Recall method is used for assessing the impact of microfinance as it is cost effective and less time consuming. However, cross verification is also done with records of SHG members maintained by NGO-MFIs and thereafter data is normalized to give near accurate result. Findings – It is found that after joining the microfinance programme, there is a significant improvement in overall economic empowerment index and the social empowerment index of the sampled SHG members. Further, findings also reveal that there is a significant improvement in overall Economic and Social Empowerment index of MFI’s clients after joining the microfinance programme. Research limitations/implications – The study is limited to only NGOs & SHGs who are involved in micro-finance activities. The study does not attempt to cover other organizations or voluntary organizations who are involved in social development activities. Since recall method is used, some SHG members cannot remember properly and have responded on assumptions and approximation. However, this limitation has been normalized by comparing records maintained by NGO-MFIs. Practical implications – This finding of the study will be beneficial to many NGO-MFIs to understand how their microfinance intervention helps poor women empower economically as well as socially. The techniques and tools used in this study are very simple and easy and very practicable for the NGO-MFIs who want to evaluate the socio-economic change of their beneficiaries because of their microfinance programme. Originality/value – Study is purely based on the primary data collected from the field survey as well as from records maintained by NGO-MFIs. The findings and feedback given to the sample NGO-MFIs are highly beneficial to them and they are surprised to know that microfinance programme have significant contribution in the improvement of socio-economic status of SHG members.