Effectiveness of microcredit in employment generation and livelihood transformation of tribal women entrepreneurs: evidence from PMMY

Abstract

Financial support through microcredit facilities has been acclaimed as instrumental in encouraging entrepreneurial activities and empowering individuals, especially women, in the process. Accordingly, Government and policy makers have initiated microcredit programmes to uplift individuals at the ‘bottom of the pyramid’. Pradhan Mantri Mudra Yojana (PMMY), a microcredit programme, is an example of the Indian government’s initiative to promote employment and sustain the livelihood status of the above-mentioned individuals. The present study, thus, investigates the success of this microcredit scheme in creating employment and transforming livelihood status of tribal women entrepreneurs in particular. Ordered logistic regression, Wilcoxon Sign test, Effect Size test has been applied for empirical analysis. The results indicate that loan amount significantly influences employability. Also, the facility improved the livelihood of women as regards to economic, psychological and social empowerment. The study confirms that aid through microcredit has the potential of generating employment and empowering women. Further, it suggests that the government and the banking sector may improve the existing policies and take initiatives to enhance the accessibility of the scheme and create a supporting environment to assist borrowers during the initial stage of the venture through different training programmes.