Impact of Micro-Finance on Poverty : A Study of Twenty Self-Help Groups in Nalbari District, Assam

This paper is an empirical study conducted in Nalbari district, Assam about the impact of micro-finance on poverty. It examines the nature of loans provided by the SHGs to its members, and finds that the amount of loans provided under the programme to its members is too small to help them cross the poverty line. Again these loans were utilised mainly for consumption purposes, followed by expenditure on current productive activities. Thus, there were only a few capital investments. But these capital investments were also not enough to provide the members full employment opportunity and sufficient income to cross the poverty line. Again it was seen that still the members of the SHGs go either to the moneylenders or to the banks for higher amount of loan. Moreover, it was found that a large segment of the SHGs are closed down. The closing of SHGs was found more in case of those formed under NABARD-sponsored SHG- Bank linkage programme and those formed under SGSY. Actually these SHGs were formed with the motive to have subsidised credit from the government sponsored schemes. When they found that they would not get any more subsidised credit, they closed the SHGs. It is proposed that perhaps providing higher amount of credit by banks to the SHGs will enable the SHGs to provide more and higher quantum of loans to the members. The most important thing for the success of SHGBank linkage programme is that the members of SHGs must be made aware of the concept of self-help.