Q.8 Can the vicious cycle of gender inequality, poverty and malnutrition be broken through microfinancing of women SHGs? Explain with examples.

Model Answer:

Introduction

Microfinancing refers to the provision of financial services to low-income individuals or groups who typically lack access to traditional banking services. It is significant as it empowers marginalised communities by providing them with the means to start small businesses, thereby fostering economic independence. Self Help Groups (SHGs) are small, informal groups of people who come together to address common issues, particularly financial ones, through collective savings and lending. SHGs are crucial in promoting financial inclusion, especially among women.

Gender inequality, poverty, and malnutrition are interlinked issues. Gender inequality often limits women's access to education and employment, leading to poverty. Poverty, in turn, restricts access to nutritious food, resulting in malnutrition. This vicious cycle perpetuates across generations.

In India, microfinancing of women SHGs has seen significant growth. According to NABARD's 2022-23 report, there are over 10 million SHGs in India, with women constituting 85% of the members. The total savings of SHGs stood at ₹47,240 crores, indicating their substantial role in financial inclusion.

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Breaking the Vicious Cycle:

• Increased Income: Microfinancing enables women to start or expand small businesses, leading to increased household income. For instance, the Kudumbashree SHG in Kerala has empowered women to engage in various income-generating activities, significantly reducing poverty levels in the state.
• Enhanced Decision Making: Financial independence through SHGs enhances women's decision-making power within households. Studies have shown that women with control over finances are more likely to invest in their children's education and health, breaking the cycle of poverty and malnutrition.
• Improved Health Indicators: With better financial resources, women can afford nutritious food and healthcare. The SEWA (Self Employed Women's Association) in Gujarat has demonstrated that women SHG members have better health outcomes compared to non-members.
• Education and Skill Development: SHGs often provide training and education, improving women's skills and employability. For example, the Mahila Arthik Vikas Mahamandal (MAVIM) in Maharashtra offers vocational training to SHG members, enhancing their economic opportunities.
• Social Empowerment: Participation in SHGs fosters a sense of community and support among women, helping them challenge and overcome societal norms that perpetuate gender inequality. The SHG movement in Tamil Nadu has been instrumental in reducing domestic violence and increasing women's participation in local governance.

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Challenges:

• Patriarchal Mindset: Deep-rooted patriarchal attitudes often restrict women's participation in SHGs. In many rural areas, women still need permission from male family members to join SHGs or access microfinance.
• Lack of Education: Illiteracy and lack of financial literacy among women can hinder the effective utilisation of microfinance. According to the National Family Health Survey (NFHS-5), the female literacy rate in rural India is still below 70%.
• Limited Access to Markets: Women SHG members often face challenges in accessing broader markets for their products, limiting their income potential. For instance, many SHGs in Jharkhand struggle to find buyers beyond local markets.
• Inadequate Support Systems: Insufficient support from government and financial institutions can impede the growth of SHGs. Delays in loan disbursement and lack of training facilities are common issues.

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Microfinancing of women SHGs holds immense potential to break the vicious cycle of gender inequality, poverty, and malnutrition. By providing financial resources, enhancing decision-making power, and improving health and education outcomes, SHGs can transform the socio-economic landscape for women.

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Way Forward:

• Promote Financial Literacy: Implement comprehensive financial literacy programs to ensure women can effectively utilise microfinance.
• Strengthen Support Systems: Enhance government and institutional support for SHGs, including timely loan disbursement and market access.
• Address Patriarchal Norms: Conduct awareness campaigns to challenge and change patriarchal attitudes, encouraging more women to join SHGs.
• Leverage Technology: Use digital platforms to provide training, market access, and financial services to SHG members.

Conclusion

By addressing these challenges, microfinancing of women SHGs can be a powerful tool in creating a more equitable and prosperous society.

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