Relevance and Impact of Micro-savings in Building Financial Assets for Poor in India

Abstract

The growth of micro-finance in terms of breadth and width in world as well as in India has been phenomenal. Existing research mainly focuses on its impact on empowerment of poor women through access to micro-credit by promotion of entrepreneurship, reduction in economic vulnerability, etc. One of the major contributions of microfinance is also in terms of provision of access to ‘micro-savings’ to poor women. This other side of microfinance until recently was not given due importance due to predominance given to micro-credit. Slowly it is realised that micro-savings play an equally important role in overall empowerment process of poor women. This paper aims to assess the relevance and importance of ‘micro-savings’ as one of the major tools of empowerment with special reference to India. It uses primary data analysis of 698 microfinance clients from Maharashtra state. The paper concludes that access to ‘micro-saving’ is one of the most prominent reasons for microfinance clients to join the programme and the SHG model of microfinance has resulted in building financial assets for poor women.