181
h ps:// esea ch endsjou nal.com
Online a : h ps:// esea ch endsjou nal.com ISSN No: 2584-282X
Indexed Jou nal Pee Re iewed Jou nal
INTERNATIONAL JOURNAL OF TRENDS IN EMERGING RESEARCH AND DEVELOPMENT
Volume 3; Issue 1; 2025; Page No. 181-184
Recei ed: 07-11-2024
Accep ed: 12-12-2024
Economic and Business Impac s o Mic o inance Se ices A e Signi ican
1Ra i Ag awal and 2D . Ni in Sha ma
1Resea ch Schola , Sh i K ishna Uni e si y, Chha a pu , Madhya P adesh, India
2Associa e P o esso , Sh i K ishna Uni e si y, Chha a pu , Madhya P adesh, India
DOI: h ps://doi.o g/10.5281/zenodo.17589382
Co esponding Au ho : Ra i Ag awal
Abs ac
Mic o inance is an endea o ha seeks o o e low-income people, ega dless o hei loca ion, he oppo uni y o bo ow money. Raising
hei social and economic s anding, enhancing hei child en's educa ional possibili ies, and imp o ing hei own well-being a e all ways o
make hese people eel be e abou hemsel es. The e a e a a ie y o op ions o business owne s and en ep eneu s in he coun y's less
de eloped and u al a eas, including small lending and c edi se ices, access o sa ings accoun s, s a up unding, and money ans e s. By
empowe ing women o pa icipa e in he economy, i p omo es gende equali y, assis s small-scale i ms in o e coming di icul ies, inc eases
amily income, and impa s g ea e agency o women.
Keywo ds: Economic, Business, Mic o inance, ins i u ions and inancial
In oduc ion
Mic o inance has become mo e impo an in u al India as a
ool o alle ia e po e y and p omo e economic
de elopmen due o limi ed access o adi ional banking
se ices. The concep o mic o inance eme ged in he la e
1970s, bu he expansion o mic o inance ins i u ions
(MFIs) and sel -help g oups (SHGs) in he 1990s caused i
o uly ake ligh . The impo e ished, especially women,
ha e bene i ed g ea ly om he inancial se ices made
a ailable by hese g oups, who make up a la ge pe cen age
o u al esiden s (S i am, 2010) [6]. When i comes o In
India, he wo mos common models o mic o inance
ins i u ions a e he SHG-Bank Linkage P og amme (SBLP)
and he MFIs model.
As a esul o he SBLP, which NABARD se up in 1992,
SHGs may ne wo k wi h inancial ins i u ions and ge loans
wi hou pledging colla e al. Acco ding o NABARD (2016),
abou 100 million low-income households we e helped by
he 8 million SHGs ha we e pa o he SBLP. Meanwhile,
mic o inance ins i u ions (MFIs) p o ide modes loans o
indi iduals and g oups, allowing hem o launch modes
p ojec s businesses o o he income-gene a ing en u es.
Pa icula ly in he de eloping na ions, mic o inance has
g own in p ominence in he las ew decades as a ool wi h
he abili y o p omo e economic and social g ow h while
simul aneously educing po e y. Helping unde p i ileged
indi iduals, pa icula ly women, gain economic
independence is one o i s c owning achie emen s. In
addi ion o he usual obs acles, i may be di icul o
women o ecei e loans, ha e asse s o use as colla e al, o
e en gain ce ain pe missions when hey seek o s a o
expand hei own businesses due o social and cul u al
con en ions.
In o de o b idge his gap, mic o inance ins i u ions (MFIs)
p o ide small-scale, pe sonalized inancial se ices o
indi iduals wi h modes incomes. The impac o
empowe ing women o launch hei own companies ex ends
a beyond mone a y conce ns. Gi ing hem a boos o hei
con idence, helping hem ise in he communi y, and amily,
and imp o ing hei child en's educa ional oppo uni ies and
o e all wel a e. Mo e and mo e, women a e gaining he
abili y o make choices o hemsel es and hei
communi ies as hey gain economic independence. Looking
beyond he inancial esul s o la ge socie al ones, his
esea ch o e s an in-dep h analysis o how mic o inance
assis s women en ep eneu s. Mic o inance has ecei ed a
In e na ional Jou nal o T ends in Eme ging Resea ch and De elopmen h ps:// esea ch endsjou nal.com
182
h ps:// esea ch endsjou nal.com
lo o p aise o he posi i e imp o emen s i has he abili y
o b ing abou , bu i s e icacy and sus ainabili y mus be
ho oughly e alua ed in many con ex s.
One kind o inancial se ice in India is mic o inance.
Insigh s om Bangladesh's G ameen Model, es ablished by
P o esso Mohammad Yunus, spa ked he bi h o India's
mic o-c edi and mic o inance sec o in he 1990s and
sp ead o many o he na ions. I all began in a li le own in
Job a, Bangladesh, be o e g owing in o a massi e
in e na ional indus y. Small Lending and c edi se ices,
sa ings accoun access, s a up inancing, and money
ans e s a e all a ailable o en ep eneu s and company
owne s in he coun y's less de eloped and u al a eas.
When i came o mic o inance, Andh a P adesh was an ea ly
adop e among Indian s a es, bu in 2010 i was hi by a
su ge o p o es s. Following a s ing o bo owe suicides
and in ensi ied p essu e om c edi bu eaus, bo owe s
ebelled agains he mic o inance sec o , which was al eady
unde in ense global sc u iny.
Li e a u e Re iew
Acco ding o Khandke (2014) [1], who analyzed wo se s o
panel da a om Bangladesh be ween 2001 and 2012,
mic o inance o ganiza ions had an e ec on he
impo e ished. The longe he le he bo owings go, he less
money he made. P io loans would ha e he mos e ec on
he a e age bo owe , o e ime, he ela i e ad an ages
would become mo e uni o m. Inc eased spending amoun ed
o 20.5 Taka o e e y 100 Taka bo owed, wi h 4.2 Taka
coming om p esen bo owings and 16.3 Taka om pas
bo owings. He had also shown ha mic o inance educed
po e y among non-pa icipan s ia spillo e e ec s, in
which hose who do no ake pa in he economic ac i i y
i sel bene i om i .
Li le ield, E.; Mo duch, J.; and Hashemi, S. (2014) [2]
mic o inance p og ams mobilized a a ie y o unding o a
a ie y o Millennium De elopmen Goals, including ending
ex eme po e y and hunge , elimina ing HIV/AIDS and
o he in ec ious illnesses, p omo ing gende equali y,
ensu ing quali y educa ion o all child en, and lowe ing he
global in an mo ali y a e. P o iding low-income
households wi h access o inancial se ices has a
subs an ial impac on he success o he Millennium
De elopmen Goals. as shown by his p esen a ion o he
esul s o many mic o inance s udies. Financial se ices
helped he impo e ished wi h a b oad ange o
equi emen s, including in es ing in heal h and educa ion,
handling amily c ises, and in es ing in mic o-en e p ises.
Th ough he use o a wide ange o cu ing-edge goods and
echniques, a conside able numbe o mic o inance
ins i u ions demons a ed a p o i able abili y o se e he
mos disad an aged membe s o socie y.
Chowdhu y, M. Jahangi Alam; Ghosh, Dipak; and W igh ,
Robe E. (2014) [3] es ed he hypo hesis ha mic o-c edi
may alle ia e po e y in Bangladesh by using ac ual da a.
The e was an emphasis on he du a ion ha p og am
pa icipan s had a ailabili y o mic o-loans, in addi ion o on
speci ic and subjec i e measu es o po e y. The expenses
o acqui ing 2,112 calo ies pe day, he minimal equi ed o
adul s, a e he basis o objec i e po e y. One way o
de e mine a amily's le el o subjec i e po e y is o ask he
b eadwinne how much money hey make each yea and i
hey hink hei amily is poo . Wi h he help o G ameen
Bank, he Associa ion o Social Ad ancemen , and he
Bangladesh Ru al Ad ancemen Commi ee (BRAC), 954
homes ha had ecei ed mic oc edi we e polled. Resul s
showed ha mic o-c edi alle ia ed po e y on bo h an
objec i e and subjec i e le el. O e all, 54.6% o he sample
was conside ed o be li ing in po e y, whe eas 60.2% o
he sample el hey we e poo . I was ob ious ha he 'new'
and 'old' g oup membe s belonged o di e en
socioeconomic le els. The e was an objec i e po e y a e
o 65.3% among he new membe s. whe eas among
p e ious membe s i was 50.2%. Simila ly, compa ed o
47.9% o long- e m membe s, 90.2% o new membe s
epo ed being in a po e y-le el subjec i e condi ion.
Kabee , N.; and Noponen, Helzi (2014) [4] The au ho s o
he a icle showcased he indings om an e alua ion o he
mac oeconomic impac o he mic o inance p og am un by
PRADAN in he s a e o Jha khand, which is among India's
poo es . The esea ch was place in he Allahabad, Dumka,
and Banka dis ic s o Jha khand. The impac o he
mic o inance p og am was s udied by compa ing ou
hund ed SHG membe s wi h one hund ed o y- ou non-
membe s om hese h ee egions. The main objec i e o
he s udy was o examine he e ec s o mic o inance on
women's choice and agency, li elihood, basic equi emen s,
asse s, sa ings, and deb si ua ions. Resea che s ound ha
membe s' access o a ange o oods and he amoun o ood
needed o sa is y basic needs was highe han ha o non-
membe s. Thei dwelling was mo e aes he ically pleasing,
wi h mo e ooms and doo s, and hey had be e access o
po able wa e . Membe s we e aising school en ollmen and
wo king o g ea e gende equi y. People in he g oup
a med and aised hei own ca le ins ead o depending on
low-skilled wage labo . Because moneylende s cha ged
such exo bi an in e es a es, membe s we e less likely o
go in o deb and mo e inclined o sa e money han non-
membe s.
Mon gome y, Hea he (2015) [5] looked in o how he
mic o inance lending p og am a Khushhali Bank a ec ed
he li es o low-income amilies in Pakis an. P ospec i e
consume s, who we e no ye en olled in he p og am we e
used as a benchma k o assessing i s e icacy. All
h oughou Pakis an, in bo h u ban and u al egions, 28,811
esidences supplied he bulk o he da a. Being in ol ed in
he mic o inance p og am a Khushhali Bank imp o ed
mone a y and social wel a e indica o s, as well as sou ces o
e enue, as shown by he a ailable e idence. This was
especially he case o he p og am's en y-le el pa icipan s.
Those wi h he lowes incomes we e able o sa e mo e o
hei kids' medical bills and school ui ion hanks o he
p og am.
Resea ch Me hodology
Unde s anding how mic o inance in luences women
business owne s is he p ima y goal o he esea ch.
Consequen ly, he s udy's popula ion consis s o all women
who ha e aken ou loans om a ce ain mic o inance
ins i u ion. Ou o 463 esponde s, a subse was chosen a
andom om each dis ic 's o al popula ion o 1310 women
business owne s.
The s udy's indings we e de i ed om a combina ion o
p ima y and seconda y sou ces. indings. Women in he
In e na ional Jou nal o T ends in Eme ging Resea ch and De elopmen h ps:// esea ch endsjou nal.com
183
h ps:// esea ch endsjou nal.com
designa ed dis ic s who ha e aken ou loans om he S a e
Women De elopmen Co po a ion (SWDC) o Cen e o
En ep eneu ship De elopmen , Madhya P adesh
(CEDMAP) se ed as he co e da a sou ce. Seconda y da a
is essen ial o comp ehending heo y and e minology, e en
i p ima y da a is c i ical o ound in he esea ch. As o
he seconda y ma e ial, i came om a wide ange o books,
academic jou nals, and jou nal a icles, bo h digi al and
physical.
Da a Analysis
In his pa , we ques ioned esponden s abou how
mic o inance se ices a ec he economy. We wan ed o
know whe he hese se ices had an o e all posi i e e ec
on hei economic condi ion and i hey belie ed
mic o inance had helped wi h economic g ow h. Rega ding
his, we asked esponden s o exp ess he ollowing on he
e ec s o mic o inancing on he economy. Se e al
in iguing indings we e de i ed om he answe s o
impo an ques ions ha p o ide explana ion and mo e
hough a e e iewing he su ey equency da a.
Table 1: Da a p esen ed as a pe cen age and a equency
dis ibu ion wi h ega d o Lessening Inequali y
Po e y
Reduc ion
F equency
Pe cen
Valid
Pe cen
Cumula i e
Pe cen
Valid
SD
15
3.2
3.2
3.2
D
34
7.3
7.3
10.6
N
7
1.5
1.5
12.1
A
214
46.2
46.2
58.3
SA
193
41.7
41.7
100.0
To al
463
100.0
100.0
Reducing po e y is mic o inance's p ima y objec i e. In
o de o de e mine whe he mic o inance p og ams a e
e ec i e, he au ho posed his ques ion. Posi i e
imp o emen s in wellbeing we e seen o e he cou se o he
esea ch. The s a emen has 46.2% ag eemen and 41.7%
s ong ag eemen . Among hose who ook he su ey, 7.3%
s ongly disag ee, 3.2% disag ee e y much, and 1.7% a e
unsu e. The majo i y o hem said ha hei household
wel a e imp o ed along wi h hei income, which led o a
s eady decline in hei po e y le el.
Table 2: Ra io o esponden s and equency dis ibu ion wi h
ega d o job c ea ion
Employmen
gene a ion
F equency
Pe cen
Valid
Pe cen
Cumula i e
Pe cen
Valid
SD
44
9.5
9.5
9.5
D
83
17.9
17.9
27.4
N
7
1.5
1.5
28.9
A
143
30.9
30.9
59.8
SA
186
40.2
40.2
100.0
To al
463
100.0
100.0
Mic o inance ecipien s ga e mixed e iews on he
s a emen , wi h 40.2% s ongly ag eeing and 30.9%
ag eeing and adding ha hey help o he s ge jobs.
Resea che s ound ha nume ous s o es selling handmade
goods, as well as beau y pa lo s and shops, employed paid
s a . On he o he hand, 9.5% o people s ongly disag ee
and 17.9% disag ee. I was b ough up ha he loan amoun
and e enue p oduced a e insu icien o employ a sala ied
wo ke o hei uni . Only 1.5% could no make up hei minds.
Table 3: Economic Independence: Dis ibu ion o Responden s by
F equency and Pe cen age
Independence
F equency
Pe cen
Valid
Pe cen
Cumula i e
Pe cen
Valid
SD
15
3.2
3.2
3.2
D
39
8.4
8.4
11.7
N
2
.4
.4
12.1
A
222
47.9
47.9
60.0
SA
185
40.0
40.0
100.0
To al
463
100.0
100.0
The oppo uni y o ea n one's own way and con ibu e
inancially o household expenses is os e ed ia
mic o inance, which in u n encou ages en ep eneu ship.
Responden s om he mic o inance p og am ha e shown
ha women's en ep eneu ship has esul ed in a con inuous
inc ease in hei income and inancial au onomy, wi h o y
pe cen s ongly ag eeing and o y-se en pe cen ag eeing.
Nowadays, women can ge along qui e well wi hou men's
paychecks. Domes ic iolence is in e sely ela ed o
inancial independence, and a posi i e co ela ion be ween
income and amily expendi u e. Only 8.4% o people ag ee
wi h he s a emen , while 3.2% a e ehemen ly opposed.
They said ha he money hey' e making isn' cu ing i .
Men s ill play a c ucial ole in mee ing hei needs. 4.0%
we e s ill unsu e.
Women business owne s o en seek ou mic o inance
ins i u ions in o de o secu e business loans. This pa
sough o de e mine i mic o inance se ice had a posi i e
e ec on esponden s' businesses by inqui ing abou he
e ec s o MFI inancial se ices. Conce ning his ma e ,
he ollowing asse ions conce ning he e ec s o
mic o inancing on businesses we e pu o he esponden s.
Se e al in iguing indings we e de i ed om he answe s
o impo an ques ions ha p o ide explana ion and mo e
hough a e e iewing he su ey equency da a.
Table 4: In e ms o he inancial s a us o he company, he
p opo ion o esponden s and he equency dis ibu ion
Financial
si ua ion
F equency
Pe cen
Valid
Pe cen
Cumula i e
Pe cen
Valid
SD
15
3.2
3.2
3.2
D
37
8.0
8.0
11.2
N
4
.9
.9
12.1
A
212
45.8
45.8
57.9
SA
195
42.1
42.1
100.0
To al
463
100.0
100.0
In esponse o a ques ion on whe he o no esponden s'
businesses' inancial si ua ions ha e imp o ed since hey
began ecei ing mic o inance se ices, 45.8% ag eed and
42.1% s ongly ag eed. When asked i a mic o inance loan
imp o ed hei company's inancial s a us, 8% said no and
3.2% said no e y s ongly. Only 0.9% o people a e unsu e
abou hei posi ion on he ma e .
In e na ional Jou nal o T ends in Eme ging Resea ch and De elopmen h ps:// esea ch endsjou nal.com
184
h ps:// esea ch endsjou nal.com
Table 5: F equency dis ibu ion and pe cen age o esponden s
wi h espec o Imp o emen in Business Tu no e
Business
u no e
F equency
Pe cen
Valid
Pe cen
Cumula i e
Pe cen
Valid
SD
15
3.2
3.2
3.2
D
40
8.6
8.6
11.9
N
5
1.1
1.1
13.0
A
212
45.8
45.8
58.7
SA
191
41.3
41.3
100.0
To al
463
100.0
100.0
When asked i hei company's annual u no e has
imp o ed since hey began ecei ing mic o inance se ices,
45.8% almos hal (41.3%) o hose who ook he su ey el
his way. Tha yea ly sales inc ease wi h mic o inance loan
is disag eed wi h by 8.6% o he sample and se e ely
disag eed by 3.2%. 1.1 pe cen o he popula ion eels
ambi alen abou he s a emen .
Table 6: Dis ibu ion o esponses in e ms o equency and
pe cen age wi h ega d o imp o emen in sales pe o mance
Sales
Pe o mance
F equency
Pe cen
Valid
Pe cen
Cumula i e
Pe cen
Valid
SD
15
3.2
3.2
3.2
D
42
9.1
9.1
12.3
N
1
.2
.2
12.5
A
163
35.2
35.2
47.7
SA
242
52.3
52.3
100.0
To al
463
100.0
100.0
Fo he pu pose o calcula ing he mone a y e ec o he
mic o inance loan, we polled esponden s on hei mon hly
sales pe o mance imp o emen s; he esul ing able Among
hose who ha e bene i ed om mic o inance se ices, 4.6.3
e eals ha 52.3% ag ee and 35.2% s ongly ag ee ha hei
mon hly sales ha e been s eadily inc easing. No much has
changed in e ms o sales success, acco ding o 9.1% o
hose who oppose, wi h 3.2% exp essing a s ong
disag eemen . Only 0.2 pe cen had no ye made a choice.
Delibe a ion s alled.
Conclusion
A he household le el, mic o inance has p o en o ha e
signi ican impac s, such as mic o inance and he li ing
condi ions o emale en ep eneu s' households. Be e
communica ion wi hin amilies has been ound by he
esea ch. Acco ding o he s udy's da a analysis,
mic o inance se ices bene i emale en ep eneu s on
mul iple le els: home, inancial, company, and socie y.
Mic o inance ins i u ions (MFIs) wo k o close his gap by
o e ing small-scale, indi idualized inancial se ices o
hose wi h low incomes. Encou aging women o s a hei
own businesses has a - eaching e ec s ha go beyond jus
inancial ma e s. I os e s gende equali y, helps small-
scale businesses o e come challenges, boos s amily
income, and gi es women g ea e agency by encou aging
hem o engage in he economy.
Re e ences
1. Khandke SR. Mic o- inance and po e y: E idence
using panel da a om Bangladesh. Wo ld Bank Policy
Resea ch Wo king Pape . 2014. No. 2945. Washing on
(DC): Wo ld Bank.
2. Li le ield E, Mo duch J, Hashemi S. Is mic o inance an
e ec i e s a egy o each he Millennium De elopmen
Goals? CGAP Focus No e. 2014; No. 24. Washing on
(DC): CGAP Publica ions.
3. Chowdhu y MJA, Ghosh D, W igh RE. The impac o
mic o-c edi on po e y: E idence om Bangladesh.
P og ess in De elopmen S udies. 2014;5(4):298–309.
4. Kabee N, Noponen H. Social and economic impac s o
PRADAN's sel -help g oup mic o inance and
li elihoods p omo ion p og am: Analysis om
Jha khand, India. Imp-Ac Wo king Pape . 2014; No.
11. B igh on (UK): Uni e si y o Sussex.
5. Mon gome y H. Se ing he poo es o he poo : The
po e y impac o he Khushhali Bank's mic o inance
lending in Pakis an. Tokyo (Japan): Asian De elopmen
Bank Ins i u e; c2015.
6. Anikee M, S i am V. Global Expansion In The Ho el
Indus y: Us Ho els In Eme ging Ma ke s. Eu opean
Real Es a e Socie y (ERES); c2010.
C ea i e Commons (CC) License
This a icle is an open access a icle dis ibu ed unde
he e ms and condi ions o he C ea i e Commons
A ibu ion (CC BY 4.0) license. This license pe mi s
un es ic ed use, dis ibu ion, and ep oduc ion in any
medium, p o ided he o iginal au ho and sou ce a e
c edi ed.
