Microfinance: A Tool for Poverty Alleviation: A Case Study of Rastriya Seva Samithi, Andhra Pradesh, India

India for long has been trying to uplift poor masses through various Interventions. During the early seventies poverty alleviation programs were initiated and the most significant one was Integrated Rural Development Program wherein rural poor were provided loans to purchase livestock and other livelihood enhancing assets. It was one of the first microfinance intervention at a large scale. Later number of other schemes were introduced with the support of commercial banks and rural banks. But formal financial sector has not been able to fulfill the  requirements for small loans especially for consumption purposes. To bridge this gap, microfinance movement came into existence. Bangladesh’s Grameena Bank led way in the region. International development agencies and networks during the 1990s showed great enthusiasm for promoting microfinance as a strategy to alleviate poverty. As a consequence, microfinance grew significantly in many countries.

The paper mainly focuses the role of Rashtriya Seva Samithi (RASS) a Non-Government Organization in providing financial assistance to poor women through  Self-Help Groups (SHGs). RASS has been established in 1981 at Tirupati in Chittoor District in Andhra Pradesh, India. It is presently operating in 4 States of India viz. Andhra Pradehs, Tamil Nadu, Orissa and Delhi  implementing 42 different welfare and development programmes with the funding support of Government of India, State Governments and International donor agencies and philanthropists. The experience of RASS with microfinance is 24years old and is fairly intensive. The concept of SHGs as an effective instrument to alleviate the problems of poverty and employment was conceived by RASS. It now operates microfinance activities in all its development projects under the banner of RMP (RASS Mahila Pragathi) through SHGs. Now, RASS is providing financial assistance to SHGs accessible to poor women, both in urban and rural areas of Andhra Pradesh and Tamil Nadu with a vision to empower women through promotion of entrepreneurial skills and empowering on social issues.  Hence, an attempt is made to study in detail the growth, financial assistance, recovery of loans, training and evaluation of SHGS.