IMPACT OF LOAN CYCLE ON

WOMEN EMPOWERMENT IN
MICRO FINANCE
Presented By
Sukesh R
15MBAP054
MBA I Year
Sub: Entrepreneurship

Article Details
Authors: T C Arun, TV Akhila & T Jyothish
Journal: ICTACT Journal on Management Studies
Vol No: 02
Issue No: 01
Year : Feb 2016
Page Number: 238-241

INTRODUCTION
Micro Finance has become one of the most effective instruments
for economic development of the poor.
Micro finance programmes are promoted as an important
strategy for womens empowerment
Formal financial institutions usually find difficult to reach them
The poverty alleviation and government sponsored schemes in
banks have problems in implementation

CONT.
The situation necessitated the formation Self Help Groups
(SHG) for enabling the poor to participate in the process of
development
The emergence of SHG as a supplementary credit channels to a
business opportunity for the banks is a departure from
traditional banking practices
The SHG-Bank linkage programme, Which involves
commercial banks, regional rural banks (RRBs) and
cooperative banks in its operations

CONT.
SHGs are mostly engaged for the welfare of women through
affordable loans and other programmes
It ensures grass root level involvement of the people in their
development work
The study specifically examined the level of empowerment
through microfinance in the region of North Kerala

OBJECTIVE
The objective of the study is to examine extend of
empowerment at various levels of loan cycle and give
suggestions for attaining increased level of empowerment.
The study also test the satisfaction level of prevailing loan
system
To analyses the utilization and investment of loan amount
To test the influence of micro-credit in the social environment
and finally to test the socio-economic impact of microfinance

DATA AND METHODOLOGY

The primary data was collected from 300 samples of 15 SHGs from
three districts of North Kerala namely Kannur, Wayanad and
Kozhikode
Structured questionnaire is used
Empowerment is taken as dependent variable and loan system,
social environment, loan satisfaction, social impact, re-investment
and financial support of SHG are taken as independent variables
Regression analysis & MANOVA is used to analysis of data

FINDINGS - Regression Analysis:

Relationship Between Empowerment And Independent
Variables

Variable
Loan System
Social
Environment

Significance
Beta
Level
0.173

0.003

-0.123

0.091

Social Impact

0.305

0.001

Reinvestment

0.001

0.092

Financial Support

0.284

0.000

Loan Cycle

0.014

0.082

MANOVA Test : Relationship Of Loan Cycle On Loan

System, Financial Support, Reinvestment Social Impact And
Empowerment
Test

Valu Significa
e
nce

Pillais Trace 0.091

Wilks
0.910
Lambda
Hotellings
0.097
Trace
Roys Largest
0.070
Root

Partial Eta
squared

0.002

0.046

0.002

0.046

0.002

0.046

0.001

0.046

DISCUSSION
Loan cycle and reinvestment in different loan cycle has
different opinion
People in first loan cycle is not satisfied
people belongs to second loan cycle shows neutral opinion
people in third cycle have good opinion

SUGGESTIONS
The loan amount must need to use for respective purpose and
have to develop small micro enterprise with the loan amount.
The authority also should monitor the utilization of loan and
should conduct awareness on women empowerment.
The government should need to give continuous support to the
micro finance units.
The government formulate favorable and liberalized policies
towards the functioning of SHG and women empowerment

CONCLUSION
The results of the study reveals that loan cycle have a significant
impact on the empowerment of people
Higher loan cycle leads to higher empowerment
The loan system such as interest rate, repayment period and
loan amount & social impact are satisfied the people