Does Microfinance Training Enhance the Financial Literacy Among Members of Self Help Groups?

One essential feature of microfinance is microfinance plus which includes components like training, insurance, health, and hygiene to the borrowers. In recent times, the Government of India has laid enormous emphasis on the twin objectives of financial inclusion and financial literacy. This paper focused upon the effect of microfinance training in enhancing the financial literacy of the trainees. The question before us was whether microfinance training in its present form enables a reasonable awareness of the above factors. To measure this effectiveness of microfinance training, we developed a tool in the form of a test which was administered to both trained and untrained respondents. The sample was drawn randomly from members of SHGs in rural areas of Ramanagar and Bangalore Rural District during the month of March 2015. The test contained questions on numerical ability, awareness of SHG guidelines, knowledge of government schemes, and basic awareness regarding banking and micro insurance. The results of the test were analysed using t- test and chi square. The study also revealed some important and interesting aspects apart from achieving the main objective of the study. The tool also studied the degree of difficulty faced by the respondents in answering each of the questions. Since the focus of the Indian government is on financial inclusion and financial literacy, the findings of the study will be especially useful for the designers of microfinance training.