Subject: Governance

The persistent challenge of gender inequality, poverty, and malnutrition forms an interconnected web affecting millions of women in India. Microfinancing through Self-Help Groups (SHGs) has emerged as a powerful tool for women's empowerment and economic independence, creating ripple effects across various social dimensions.

Role of Microfinancing in Breaking the Cycle

• Economic Empowerment:

  • Studies indicate 25-35% increase in women's income through SHG-based microfinancing initiatives.
  • Enhanced financial autonomy leads to better control over household resources and decision-making capacity.

• Nutritional Security:

  • Women with economic independence prioritize family nutrition and healthcare.
  • Integration with POSHAN 2.0 (allocated ₹21,960 crore) strengthens nutritional outcomes through community-based interventions.

Success Stories and Impact

• Entrepreneurial Growth:

  • Kudumbashree in Kerala demonstrates successful women-led enterprises in agriculture and food processing.
  • SEWA Bank model shows how financial inclusion leads to asset creation and sustainable livelihoods.

• Social Transformation:

  • Collective bargaining power through SHGs challenges traditional gender roles.
  • Enhanced participation in Gram Sabha meetings and local governance.

Challenges and Way Forward

• Implementation Gaps:

  • High interest rates and over-indebtedness need regulatory attention.
  • Need for capacity building and skill development programs.

• Policy Integration:

  • Convergence with schemes like National Rural Livelihood Mission (NRLM) and Deen Dayal Antyodaya Yojana.
  • Focus on digital financial literacy and technology adoption.

The transformative potential of microfinancing through women SHGs is evident in successful models like Jeevika in Bihar and Stree Nidhi in Telangana. With the government's enhanced focus through increased allocations (₹26,889.69 crore to WCD Ministry) and policy support, microfinancing can effectively break the vicious cycle by creating sustainable pathways for women's empowerment and social development.