Interest-Free Microfinance Arrangements and Its Impact on the Livelihood of Women in India

Abstract

Objective –The purpose of this study is to examine the impact of interest-free microfinance arrangements on the livelihood of women in India. Studies reveal that the existence of interest-free microfinance, as well as its outcome on the livelihood of weaker sections of society (particularly women), overall improved their well-being. Methodology –Exploratory and cross-section analysis is used to understand the satisfaction level among non- conventional microfinance arrangements. Survey of non-conventional microfinance beneficiaries exposes the status of women’s’ earnings, financial literacy, skills development, employment generation, household savings and poverty alleviation. Findings–Interest-free microfinance products like Zakat, Sadaqah, and KarzeHasna will successfully meet micro- financing core objectives of poverty alleviation, women empowerment, gender equality, prosperity, and employment. The analysis showed that the performance of interest-free microfinance consumers is better than conventional microfinance consumers. Novelty –This study is an original which is based on the demographic, sociocultural and regulatory framework of interest-free micro finance systems to identify the acceptability in the Indian financial system. The discussions in the study are mainly concerned with the empirical review of the impact and effect of interest-free microfinance on the lifestyle of female microfinance users after obtaining a loan i.e., their income, expenditure, saving, entrepreneurship, consumption, and women participation in earning income in India. Type of Paper: Empirical JEL Classification: G20, G21. Keywords: Entrepreneurship; Livelihood; Education Development; Living Standards; Women Empowerment