Microfinance, Self-Help Groups and Empowerment in Maharashtra

The present study assesses the benefits of microfinance through self-help groups, based on a specially designed survey in selected villages in Pune district. While the benefits in terms of higher income, consumption, and savings matter for the poor, the focus here is broader, as an attempt is made to also assess some key dimensions of women’s empowerment- defined broadly as expansion of freedom of choice and action to shape their own lives. While the targeting of microfinance through SHGs was unsatisfactory in terms of an income criterion, it was better in terms of other indicators of deprivation such as low caste, landlessness and illiteracy. What is, however, noteworthy is that the loans were used largely for health and education of children and for production-related expenses-especially by the disadvantaged. Using different methods and data sources, various dimensions of empowerment were confirmed. Some of the mechanisms involved in it were identified and assessed. Not only do SHGs benefit from the presence of networks, the former also contribute to trust, reciprocity and associational capital (e.g. through strengthening of local institutions). Domestic violence was reduced. However, greater responsibilities for women also involved longer hours of work.