IDEAS home Printed from https://ideas.repec.org/a/spr/jglont/v12y2022i1d10.1007_s40497-022-00313-5.html
   My bibliography  Save this article

Unearthing the character of microfinance in self-employment generation for bridging the gaps of disparity: a case study

Author

Listed:
  • Vandana Pareek

    (Uttar Pradesh)

  • Manish Kumar Yadav

    (Banaras Hindu University)

  • Neeraj Singh

    (Banaras Hindu University)

Abstract

The microfinance sector is all about making credit available to low-income households through an array of institutional channels, encompassing scheduled commercial banks, regional rural banks, small finance banks, self-help groups, business correspondents, non-banking financial companies (NBFCs), cooperative banks and microfinance institutions (MFIs) registered as NBFCs. The Andhra Pradesh microfinance crisis of 2010, which led to the Y. H. Malegam committee regulatory framework applied to NBFC/MFIs, brought microfinance to the core of policymakers in India. At present, microfinance schemes serve to bridge economic disparity through the generation of self-employment in the rural sector. A qualitative study was undertaken in the states of Uttar Pradesh and Bihar in India to identify the influence of microcredit activities in the country for self-employment generation and understand the problems and issues from the perspective of actual borrower. The method employed was a case study analysis of actual borrowers to evaluate the contribution of microfinance towards the betterment of their lives, besides understanding the hassles faced by the borrowers in the entire process of microcredit lending, utilisation and repayment. In India, microfinance is still in its nascent stage despite the government’s increasing focus on the proper functioning of all microfinance players through close supervision and digitisation. The study reported that government should focus on providing technical and business support to ensure that money lent is invested astutely and assist in the social and economic welfare of the beneficiary, not trapping them in indebtedness. The compulsory training and support regarding technical know-how, business procurement, financial planning and marketing skills clubbed with efficient monitoring facilitates achieving the real objectives behind microfinance. The challenge lies not in sanctioning credit but in ensuring the proper utilisation of the money to avoid non-payments and defaults. The study in hand proposed that integrating few alterations in microfinance system comprising knowledge sharing and training, raising microcredit amount and providing pre- and post-credit support will assist borrowers economically, socially and psychologically. Further microfinance help combat social issues like malnutrition, gender discrimination, poor literacy rate, domestic violence and poor quality of life in rural India through women empowerment and self-employment generation.

Suggested Citation

  • Vandana Pareek & Manish Kumar Yadav & Neeraj Singh, 2022. "Unearthing the character of microfinance in self-employment generation for bridging the gaps of disparity: a case study," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 12(1), pages 71-81, December.
  • Handle: RePEc:spr:jglont:v:12:y:2022:i:1:d:10.1007_s40497-022-00313-5
    DOI: 10.1007/s40497-022-00313-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40497-022-00313-5
    File Function: Abstract
    Download Restriction: no

    File URL: https://libkey.io/10.1007/s40497-022-00313-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. J. Copestake & S. Bhalotra & S. Johnson, 2001. "Assessing the Impact of Microcredit: A Zambian Case Study," Journal of Development Studies, Taylor & Francis Journals, vol. 37(4), pages 81-100.
    2. Mihir Dash & Venkat Mahendra Prasad & C. J. Koshy, 2016. "Women Empowerment through Microfinance Services," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 5(1), pages 20-25, February.
    3. Naveen K Shetty, 2008. "The Microfinance Promise in Financial Inclusion and Welfare of the Poor: Evidence from Karnataka, India," Working Papers 205 Keyword : Banking, Mi, Institute for Social and Economic Change, Bangalore.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gutiérrez-Nieto, Begoña & Serrano-Cinca, Carlos, 2019. "20 years of research in microfinance: An information management approach," International Journal of Information Management, Elsevier, vol. 47(C), pages 183-197.
    2. Sophie Brana & Yves Jégourel, 2011. "Breadth and depth of french microfinance outreach : an evaluation," Working Papers hal-00637689, HAL.
    3. Dan Brockington & Nicola Banks, 2014. "Exploring the Success of BRAC Tanzania’s Microcredit Programme," Global Development Institute Working Paper Series 20214, GDI, The University of Manchester.
    4. Teppo Eskelinen & Johanna Perkiö, 2018. "Micro‐investment perspective and the potential of the universal basic income," Development Policy Review, Overseas Development Institute, vol. 36(S2), pages 696-709, September.
    5. Waseem Ul Hameed & Muhammad Haseeb & Jawad Iqbal & Leonardus W. W. Mihardjo & Kittisak Jermsittiparsert, 2022. "Environmental disaster and women self‐sustainability—A survey study on microfinance female clientele in Pakistan," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(3), pages 3599-3622, July.
    6. Nidhiya Menon, 2006. "Non-linearities in returns to participation in Grameen Bank programs," Journal of Development Studies, Taylor & Francis Journals, vol. 42(8), pages 1379-1400.
    7. Katie Wright & James Copestake, 2004. "Impact assessment of microfinance using qualitative data: communicating between social scientists and practitioners using the QUIP," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(3), pages 355-367.
    8. Sefa K. Awaworyi, 2014. "The Impact of Microfinance Interventions: A Meta-analysis," Monash Economics Working Papers 03-14, Monash University, Department of Economics.
    9. Sievers, Merten & Vandenberg, Paul, 2007. "Synergies through Linkages: Who Benefits from Linking Micro-Finance and Business Development Services?," World Development, Elsevier, vol. 35(8), pages 1341-1358, August.
    10. Joung-Hun Lee & Marko Jusup & Boris Podobnik & Yoh Iwasa, 2015. "Agent-Based Mapping of Credit Risk for Sustainable Microfinance," PLOS ONE, Public Library of Science, vol. 10(5), pages 1-16, May.
    11. Jennifer De la Cruz, 2024. "Regional Financial Development and Micro and Small Enterprises in Peru," Documentos de Trabajo / Working Papers 2024-532, Departamento de Economía - Pontificia Universidad Católica del Perú.
    12. Kuldeep Singh & Madhvendra Misra & Jitendra Yadav, 2021. "Corporate social responsibility and financial inclusion: Evaluating the moderating effect of income," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(5), pages 1263-1274, July.
    13. José Baptista & Joaquim Ramalho & J. Vidigal da Silva, 2006. "Understanding the microenterprise sector to design a tailor-made microfinance policy for Cape Verde," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 5(3), pages 225-241, December.
    14. Xolile Mamba, Tangetile, 2016. "The role of contracts in improving access to credit in the smallholder livestock sector of Swaziland," Research Theses 243472, Collaborative Masters Program in Agricultural and Applied Economics.
    15. R. Casselman & Linda Sama & Abraham Stefanidis, 2015. "Differential Social Performance of Religiously-Affiliated Microfinance Institutions (MFIs) in Base of Pyramid (BoP) Markets," Journal of Business Ethics, Springer, vol. 132(3), pages 539-552, December.
    16. B Gutiérrez-Nieto & C Serrano-Cinca & C Mar Molinero, 2009. "Social efficiency in microfinance institutions," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(1), pages 104-119, January.
    17. Forah Obebo & Nelson Wawire & Joseph Muniu, 2018. "Effects of Participation of Micro and Small Enterprises in Microfinance on Their Performance in Kenya," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(7), pages 1-78, July.
    18. Ranjula Bali Swain & Supriya Garikipati, 2019. "Microfinance in the Global South: Examining Evidence on Social Efficacy," Working Papers 201908, University of Liverpool, Department of Economics.
    19. van Rooyen, C. & Stewart, R. & de Wet, T., 2012. "The Impact of Microfinance in Sub-Saharan Africa: A Systematic Review of the Evidence," World Development, Elsevier, vol. 40(11), pages 2249-2262.
    20. Fwamba Rashid & Matete John & Nasimiyu Consolatta & Sungwacha Stephen, 2015. "Impact of Microfinance Institutions on Economic Empowerment of Women Entrepreneurs in Developing Countries," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 1(10), pages 45-55, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:jglont:v:12:y:2022:i:1:d:10.1007_s40497-022-00313-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.