Investigating the Rural and Entrepreneurial Development through Microfinance
DOI:
https://doi.org/10.21632/irjbs.15.2.177-190Keywords:
Abstract
Microfinance has been evolving to be a decisive factor in poverty reduction, rural and entrepreneurial development. This research aims to find out the impact of microfinance on rural/socio-economic development and entrepreneurial skill development. Particularly, this study attempts to explore the impact of microfinance on social development, financial empowerment, education, healthcare, economic independence, and entrepreneurial development. Data was collected through questionnaires taken from the beneficiaries of the National Rural Livelihood Mission (NRLM) erstwhile Swaran Jayanti Shahri Rozgar Yojana (SJSRY) microfinance scheme in the Union Territory of Jammu and Kashmir, India. A purposive sampling method, exploratory factor analysis, and paired sample t-test were
used in this study. The findings prove that microfinance facilitates social development, improved financial empowerment, and promotes decision-making relating to education and healthcare among beneficiaries. The finding also indicates that microfinance helps to increase entrepreneurial skill development among the beneficiaries. This study offers an insight how microfinance eliminates poverty and facilitates social development as well as entrepreneurial skills. These findings have essential implications for academics, policymakers, and microfinance institutions.
References
Abu Wadi, R., Bashayreh, A., Khalaf, L., & Abdelhadi, S. (2022). Financial sustainability and outreach in microfinance institutions: evidence from MENA countries. Journal of Sustainable Finance & Investment, 12(1), 238-250.
Abrar, A., Hasan, I., & Kabir, R. (2021). Finance-growth nexus and banking efficiency: The impact of microfinance institutions. Journal of Economics and Business, 114, 105975.
Agarwal, R., & Pokhriyal, A. K. (2022). The moderating effect of attitude to risk on the role of microfinance in entrepreneurship development in Uttarakhand region, India. Journal of Global Entrepreneurship Research, 1-11.
Agboola, M. G., & Osunde, C. (2012). Microfinance and entrepreneurial development in Nigeria. JORIND, 10(3), 405-410.
Ahmad, N. M., & Ahmad, M. M. (2016). Role of microcredit towards socioeconomic empowerment of Pakistani urban women. The Anthropologist, 26(3), 189-197.
Al-Mamun, A., Wahab, S. A., Mazumder, M. N. H., & Su, Z. (2014). Empirical investigation on the impact of microcredit on women empowerment in urban Peninsular Malaysia. The Journal of Developing Areas, 287-306.
Angelucci, M., Karlan, D., & Zinman, J. (2013). Win some lose some? Evidence from a randomized microcredit program placement experiment by Compartamos Banco (No. w19119). National Bureau of Economic Research.
Armendáriz de Aghion, B., & Morduch, J. (2005). The Economics of Microfinance MIT Press. Cambridge, Massachusetts.
Armendáriz, B., & Morduch, J. (2010). The economics of microfinance. MIT press.
Avais, M. (2014). Financial innovation and poverty reduction. International Journal of Scientific and Research Publications, 4(1), 2250-3153.
Babbie (2008). The Basics of Social Research. Belmont CA: Thomson Wadsworth.
Bansal, S., & Singh, A. K. (2019). Examining the social and entrepreneurial development of women through Microfinance in Indian context. Journal of Management Development. DOI 10.1108/JMD-05-2019-0146.
Bika, Z., Subalova, M., & Locke, C. (2022). Microfinance and small business development in a transitional economy: Insights from borrowers’ relations with microfinance organisations in Kazakhstan. The Journal of Development Studies, 58(1), 183-203.
Caskey, J. P., Duran, C. R., & Solo, T. M. (2006). The urban unbanked in Mexico and the United States. The World Bank.
Chakrabarty, K. C. (2011). Banking and beyond: new challenges before Indian financial system. RBI Monthly Bulletin April.
Chibango, C. (2014). Revolution Mobile Money: An Opportunity for Financial Inclusion in Africa. The International Journal of Humanities &Social Studies 2, 59, 67.
Cull, R., & Morduch, J. (2018). Microfinance and economic development. In Handbook of finance and development (pp. 550-572). Edward Elgar Publishing.
Datta, S., & Sahu, T. N. (2022). How Far is Microfinance Relevant for Empowering Rural Women? An Empirical Investigation. Journal of Economic Issues, 56(1), 97-112.
Davis, M. (2002): Late Victorian Holocausts: El Niño Famines and the Making of the Third World, Verso, London, pp. 529.
Divya, K. (2014). Banks on wheels for financial inclusion: a case study. International Journal of Research in Computer Applications and Management, 4(9), 36-40.
Ferdousi, F. (2015). Impact of microfinance on sustainable entrepreneurship development. Development Studies Research, 2(1), 51-63.
Erenstein, O. (2011). Livelihood assets as a multidimensional inverse proxy for poverty: a district-level analysis of the Indian Indo-Gangetic Plains. Journal of Human Development and Capabilities, 12(2), 283-302.
Financial Express (2019): Around 22% Indians live below poverty line; Chhattisgarh, Jharkhand fare worst, Sep 21, 2019, https://www.financialexpress.com/economy/around-22-indians-live-below-poverty-line-chattisgarh-jharkhand-fare-worst/1713365/
Ganlea, John, Kuumuori, Kwadwo Afriyie, & Alexander Yao Segbefia. (2015). Microcredit: Empowerment and disempowerment of rural women in Ghana, World Development, 3, 35–45.
Garikipati, S., Agier, I., Guérin, I., & Szafarz, A. (2017). The cost of empowerment: multiple sources of women’s debt in rural India. The Journal of Development Studies, 53(5), 700-722.
Ghalib, A. K., Malki, I., & Imai, K. S. (2015). Microfinance and household poverty reduction: Empirical evidence from rural Pakistan. Oxford Development Studies, 43(1), 84-104.
Godinho, V., Eccles, K., & Thomas, L. (2018). Beyond Access: The role of microfinance in enabling financial empowerment and wellbeing for Indigenous clients: lessons from remote Australia. Third Sector Review, 24(2), 57-76.
Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2008). Multivariate Data Analysis (6th Eds) Pearson Prentice Hall. New Jersey.
Hassan, S. M., & Islam, M. M. (2019). The socio-economic impact of microfinance on the poor family: A study from Bangladesh. Journal of Asian and African Studies, 54(1), 3-19.
IBEF (2020): Indian Rural Market: Brief Overview, available November 30, 2020, https://www.ibef.org/pages/30474
Imai, K. S., & Azam, M. S. (2012). Does microfinance reduce poverty in Bangladesh? New evidence from household panel data. Journal of Development studies, 48(5), 633-653.
Imai, K. S., Gaiha, R., Thapa, G., & Annim, S. K. (2012). Microfinance and poverty—a macro perspective. World development, 40(8), 1675-1689.
Isangula, K. (2012). Improving women and family’s health through integrated microfinance, health education and promotion in rural areas. Journal of sustainable development, 5(5), 76.
Jayakumari, A. G. (2015). Financial inclusion: an Indian outlook. Research Journal of Social Science & Management, 4(11), 1-5.
Jose, S., & Chacko, J. (2017). Sustainable development of microfinance customers: An empirical investigation based on India. Journal of Enterprise Information Management. 30 (1). 55-65.
Jyothi, P., & Savitha, B. (2013). Delivery of microcredit to self help groups by regional rural banks in Andhra Pradesh. Research Journal of Social Science & Management, 3(6), 128-134.
Khandker, S. R. (2005). Microfinance and poverty: Evidence using panel data from Bangladesh. The world bank economic review, 19(2), 263-286.
Lakshmi, P., & Visalakshmi, S. (2013). Impact of cooperatives in financial inclusion & comprehensive development. Journal of Finance and Economics, 1(3), 49-53.
Lal, T. (2018). Impact of financial inclusion on poverty alleviation through cooperative banks. International Journal of Social Economics. 45(5), 808-828.
Mazumder, M. S. U. (2022). The effects of microfinance programs on recipients’ livelihoods in rural Bangladesh. The European Journal of Development Research, 34(3), 1383-1418.
McIntosh, C., Villaran, G., & Wydick, B. (2011). Microfinance and home improvement: using retrospective panel data to measure program effects on fundamental events. World Development, 39(6), 922-937.
Memon, A., Akram, W., Abbas, G., Chandio, A. A., Adeel, S., & Yasmin, I. (2022). Financial Sustainability of Microfinance Institutions and Macroeconomic Factors: A Case of South Asia. South Asian Journal of Macroeconomics and Public Finance, 11(1), 116-142.
Midgley, J. (2008). Microenterprise, global poverty and social development. International Social Work, 51(4), 467-479.
Milana, C., & Ashta, A. (2020). Microfinance and financial inclusion: Challenges and opportunities. Strategic Change, 29(3), 257-266.
Miled, K. B. H., Younsi, M., & Landolsi, M. (2022). Does microfinance program innovation reduce income inequality? Cross-country and panel data analysis. Journal of Innovation and Entrepreneurship, 11(1), 1-15.
Morris, G., & Barnes, C. (2005). An assessment of the impact of microfinance: a case study from Uganda. Journal of Microfinance/ESR Review, 7(1), 4.
Newman, A., Schwarz, S., & Borgia, D. (2014). How does microfinance enhance entrepreneurial outcomes in emerging economies? The mediating mechanisms of psychological and social capital. International Small Business Journal, 32(2), 158-179.
Rather, R. (2017). Investigating the impact of customer brand identification on hospitality brand loyalty: A social identity perspective. Journal of Hospitality Marketing & Management, 27(5), 487-513.
Rather, R. (2018). Consequences of consumer engagement in service marketing: An empirical exploration. Journal of Global Marketing, 32(2), 116-135.
Rather, R. (2020). Customer experience and engagement in tourism destinations: The experiential marketing perspective. Journal of Travel & Tourism Marketing, 37(1), 15-32.
Raza, A., Rather, R., Iqbal, M., & Bhutta. U. (2020). An assessment of corporate social responsibility on customer company identification and loyalty in banking industry: A PLS-SEM analysis. Management Research Review, 43(11), 1337-1370.
Rehman, H., Moazzam, D. A., & Ansari, N. (2020). Role of microfinance institutions in women empowerment: A case study of Akhuwat, Pakistan. South Asian Studies, 30(1).
Roodman, D., & Morduch, J. (2014). The impact of microcredit on the poor in Bangladesh: Revisiting the evidence. Journal of Development Studies, 50(4), 583-604.
Samer, S., Majid, I., Rizal, S., Muhamad, M. R., & Rashid, N. (2015). The impact of microfinance on poverty reduction: Empirical evidence from Malaysian perspective. Procedia-Social and Behavioral Sciences, 195, 721-728.
Shams, G., Rehman, M.A., Samad, S., & Rather, R. (2020). The impact of the magnitude of service failure and complaint handling on satisfaction and brand credibility in the banking industry. Journal of Financial Services Marketing, 25, 25-34.
Shirazi, N. S. (2012). Targeting and socio-economic impact of microfinance: A case study of Pakistan. Islamic Economic Studies, 20(2).
Tahmasebi, A., & Askaribezayeh, F. (2021). Microfinance and social capital formation-a social network analysis approach. SocioEconomic Planning Sciences, 76, 100978.
Ukanwa, I., Xiong, L., & Anderson, A. (2018). Experiencing microfinance: Effects on poor women entrepreneurs’ livelihood strategies. Journal of Small Business and Enterprise Development, 25 (3), 428-446.
Ul-Hameed, W., Mohammad, H., & Shahar, H. (2018). Retracted: Microfinance institute’s non-financial services and womenempowerment: The role of vulnerability. Management Science Letters, 8(10), 1103-1116.
Van Rooyen, C., Stewart, R., & De Wet, T. (2012). The impact of microfinance in sub-Saharan Africa: a systematic review of the evidence. World Development, 40(11), 2249-2262.
Weber, O., & Ahmad, A. (2014). Empowerment through microfinance: The relation between loan cycle and level of empowerment. World Development, 62, 75-87.
World Bank (2001): Attacking poverty. World development report, 2000/2001, World Bank, Washington, DC.
Wun, N. S. L. P., Nusari, M., & Ameen, A. (2019). Effect of microfinance on socio-economic development of rural community in Myanmar. International Journal of Management and Human Science (IJMHS), 3(3), 26-31.
Downloads
Submitted
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Zahoor Ahmad Parray, Raouf Ahmad Ahmad Rather, Shabir Ahmad Bhat, Pirzada Sajad Ahmad
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Journal Author(s) Rights
For IRJBS to publish and disseminate research articles, we need publishing rights (transferred from the author(s) to the publisher). This is determined by a publishing agreement between the Author(s) and IRJBS. This agreement deals with the transfer or license of the copyright of publishing to IRJBS, while Authors still retain significant rights to use and share their own published articles. IRJBS supports the need for authors to share, disseminate and maximize the impact of their research and these rights, in any databases.
As a journal Author, you have rights to many uses of your article, including use by your employing institute or company. These Author rights can be exercised without the need to obtain specific permission. Authors publishing in IRJBS journals have comprehensive rights to use their works for teaching and scholarly purposes without needing to seek permission, including:
- use for classroom teaching by Author or Author's institution and presentation at a meeting or conference and distributing copies to attendees;
- use for internal training by the author's company;
- distribution to colleagues for their research use;
- use in a subsequent compilation of the author's works;
- inclusion in a thesis or dissertation;
- reuse of portions or extracts from the article in other works (with full acknowledgment of the final article);
- preparation of derivative works (other than commercial purposes) (with full acknowledgment of the final article);
- voluntary posting on open websites operated by the author or the author’s institution for scholarly purposes,
(But it should follow the open access license of Creative Common CC-by-SA License).
Authors/Readers/Third Parties can copy and redistribute the material in any medium or format, as well as remix, transform, and build upon the material for any purpose, even commercially. Still, they must give appropriate credit (the name of the creator and attribution parties (authors' detail information), a copyright notice, an open access license notice, a disclaimer notice, and a link to the material), provide a link to the license, and indicate if changes were made (Publisher indicates the modification of the material (if any) and retain an indication of previous modifications.
Authors/Readers/Third Parties can read, print and download, redistribute or republish the article (e.g. display in a repository), translate the article, download for text and data mining purposes, reuse portions or extracts from the article in other works, sell or re-use for commercial purposes, remix, transform, or build upon the material, they must distribute their contributions under the same license as the original Creative Commons Attribution-ShareAlike (CC BY-SA).
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
