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ArthFinance – Striving For Prosperity Everywhere

  • A-64, Residential Colony Sitapura Industrial Area,
  • Tonk Road Jaipur-302022
  • arth@arthfinance.com
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Month: May 2016

Microfinance And Rural Women Empowerment Go Hand In Hand

Microfinance and rural women empowerment go hand in hand

Much of India’s economic development started after the 90s liberalization policies, which targeted to reform the structural and constitutional parts of the economy, opening the hands of the private sector. In recent decades, India’s GDP rate reached a high of 7%, reaping the benefits of the 90s changes. 2011 census showcased an interesting fact that nearly two-thirds of the population still dwelled in rural areas, and agriculture was the chief occupation. Of these two-thirds, there was almost half the population of women who lived with the conventional laws of paternalistic society. India was still miles away to harness this side of our population for their entrepreneurial and leadership abilities, which would prove to be a driving force for the economy. 

Indian rural societies are run on conventional norms that still see our prejudiced paternalistic society as the upfront household law. While many feminists go vocal for a modern equalized society, much of their voices are only to be heard in the urban educated world. They are unable to penetrate deep into the rural household, which is running on the same lines as it was ten years ago. Although many government schemes which focus on women in rural areas are being implemented, the fact remains that these are essentially being used only as a money extraction policies. While we talk about change, we often forget that our informational chanting is only suitable and work for urban living educated folks. Rural households are not too concerned about these equalizing societies’ chants.

We can tackle this issue of reaching more women in rural areas and supporting them to gain financial independence through microcredit schemes. Arth microfinance is leading and helping the rural women in shaping their futures through our micro lending schemes, which targets to help them develop an entrepreneurial mindset and gain financial independence. Arth encourages rural women to build an SHG group and mobilize their workforce for a better experience in terms of business or entrepreneurship. We push different suitable credit options to them according to their skills and requirements and even provide pieces of training assistance as required. The microfinance institutions play a commendable role in uplifting the rural sector when the private and established banks and institutions are reluctant to open in these areas. Secluding a particular section of our society based on gender and education will never bring equality, let alone justice. The census also showcased us that women’s participation in labor is only 28%. 

World Bank conducted a survey to check the growth of inequality in various countries in 2018 and found that India has the highest growth in inequality from 1980 to 2016. The contribution factor is the uneven distribution of wealth, and wealth comes with opportunities. Microfinance institutions are playing a major role in creating opportunities among the rural areas and driving wealth in these areas, which balances the wealth distribution in the country. Women’s financial independence has a direct correlation with the country’s financial inclusion.

Problems faced by rural women in credit sector schemes:

  • Lack of collateral: Rural areas are usually underdeveloped compared to their urban counterparts and faces a shortage of advanced amenities, including major banks, good hospitals, and educational institutes. The only thing which the people have here which can be used as collateral is the agricultural land, which is often the chief source of their income. Hence there is a high risk of security among both the borrowing and lending parties. And when we come to the case of rural women, the case even worsens. They don’t have even minimum assets in their names, which can be provided as collateral at times.

  • No banks and reliable financial institutions: Rural areas still use the unorganized credit sector as their chief borrowing needs. The wealthy people like zamindars, mukhiya, etc. are the lending parties who charge high-interest rates on the principal amount. These high rates can even lead to a debt trap that can force the borrower to sell their lands.

  • No entrepreneurship knowledge: With even basic amenities not being provided in rural areas, it is wrong to think that these people know much about entrepreneurship qualities. Without proper training, even if they collect a lot of money to start a small business, they will eventually fail and fall in debt.

  • Social exclusion: In a paternalistic society, very less value is given to women. Hence, it is difficult for women in rural areas to survive in a male-dominated business environment.

These are some of the major challenges faced by women in rural areas, which led to the development of microfinance sectors and saw booming growth in these regions. Arth microfinance is one such institution working primarily in rural areas for skill development in women through our personalized micro-credit options. We have a tie-up with some major banks which facilitate the loan process in these areas. Also, timely interest submission is assured through the joint incorporation of SHGs, where the group’s credit reputation is connected with each member. This has ensured timely submission and management of resources along with the upliftment of these women.

As rightly said, each drop fills an ocean; we know that our small addition in improving the lives of these women who are haunted by the conventional laws made by the paternalistic society will surely add up in our nation’s development. Initially, when we started, it was only a village in Rajasthan; we started at a small level, though, however, with people’s love and support, we grew our operations in multiple states. It had been a rewarding journey for our team in terms of knowledge and experience, and now we hold a significant number of women in rural areas who have got financially independent through our help. Microfinance institutions have always been an integral part of our country’s development and raise a whole lot of more upcoming opportunities in the future. Penetrating rural areas can be easily done now through various local branches of these microfinance institutions whose primary motive remains to help women become financially independent.