Social Capital Formation and Growth of Micro Entrepreneurship through Microfinance:A Study of Women in Self Help Groups in Rajasthan

Purpose: This paper is an attempt to explore and analyse the development of micro entrepreneurship at small level through microfinance and social capital building among the women of SHGs of Rajasthan State.

Design/methodology/approach: We have approached more than 500 microfinance clients but somehow only 435 clients of 53 SHGs responded properly in which 214 were women. We have surveyed them and asked about their demographics, financial and social dimensions through questionnaires.

Findings: We have applied various univariate and multivariate statistical techniques and found significant increase in sociability of microfinance clients with special reference to women across Rajasthan state. We also found more than 30% turn-up of women microfinance clients in to entrepreneurs.

Research Limitations: A major limitation of this research is that the tribal areas of Dungarpur, Jhalawar, Banswara and Pratapgarh are not included due to various reasons. Other limitation include multiple lending which is seems to be more crucial and defaulters are not included in the study.

Practical implications: The present study focuses upon the social and financial processes which are participated in the development of entrepreneurship of the microfinance beneficiaries (SHGs). The study is useful for the policymakers to find out the regions where and how microfinance is catering a platform for entrepreneurship.

Originality/value: It is expected that the study will definitely add significant knowledge in the area of social capital and intermediary processes between entrepreneurship and microfinance and it will be helpful for the scholars to find out enhanced and substantial measures of social capital.