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Activist/Development Strategies in Micro-finance


R. Srinivasan

MICRO-CREDIT, POVERTY AND EMPOWERMENT: LINKING THE TRIAD
Edited by Neera Burra , Joy Deshmukh-Ranadive and Ranjani K. Murthy
Sage Publications, New Delhi, 2005, pp. 369, Rs. 395.00

VOLUME XXX NUMBER 4 April 2006

The central issue addressed by this book, using six Indian case studies, is the impact of micro-credit (financial services for the poor) on poverty and women’s empowerment. The six case studies cover a range of organization forms. Micro-credit in India predominantly uses two group-lending models-the Self-Help Group [SHG] and the Grameen-and is usually focussed on women clients. Each SHG is a group of 12 to 20 women and this group is a micro-bank in that it accepts savings from, and lends to, its group members; and often borrows from other financial institutions. Some micro-credit institutions replicate the Bangaladesh Grameen model—typically, five-woman groups are formed, with eight groups affiliated into a centre. However, the group and centre are not micro-banks, the savings and loan portfolios are “domiciled” in the Grameen replicator. The centre is where, once a week, banking operations are conducted. Of the six micro-credit programmes studied, SML (Andhra Pradesh) and ASA (Tamil Nadu) are Grameen replicators. DHAN (South India) is a large not-for-profit and uses SHGs as do Lokadrusti (Orissa) and SSP (Maharashtra) which are somewhat smaller. SAPAP is a State-led initiative in Andhra Pradesh using SHGs.   Impact studies (see Aghion and Morduch1) use methodologies ranging from anecdotal to “hard-science” and are notoriously difficult to conduct. Essentially, one would like to state with confidence that clients of a micro-credit programme have seen significant increases in income or empowerment compared to clients without. This is easier said than done. One concern is whether there was an initial bias when clients were selected, in that the women with greater chance of success were selected (something that most managers with a sense of self-preservation will do). Another issue is attribution——————how does one assert that it was micro-credit and not, say, the local dairy cooperative that helped incomes grow. Finally while income is relatively easy to define, empowerment is not.   What makes synthesizing the findings of the six studies difficult is that they employ different methodologies. The methodologies vary from close to anecdotal to half-way to “hard-science.” I have, personally, no problem with that—I do not suffer from ‘physics-envy’ and recognize that there are many possible ways of understanding social science phenomena. However, to complicate matters some of the studies involve people associated with the organization (as researcher or for data-collection). This raises concerns of objectivity.   The study of SAPAP (by Ranjani K. Murthy, K. Raju and Amitha Kamath) compares member ...


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