ISSN: 2455-0353
Dr. Yasha Bothra, Assistant Professor, Bharati College, University of Delhi.
Prof.Ritu Sapra, Professor, Department of Commerce, Delhi School of Economics, University of Delhi.
Microfinance is regarded as a toolfor reducing poverty since the time it became popular in Bangladesh in 1970s. Millions of low-income borrowers who were previously beyond the reach of formal financial institutions now have access to loans due to the microfinance sector. The provision of financial services, in particular lending for microenterprises (income generating activities), will lead to the upliftment of the underprivileged .The microfinance sector is largely focused on providing loans to the underprivileged without the need for any type of collateral security. The majority of microfinance companies in India employ the self-help group (SHG) or joint liability group (JLG) models of group lending to issue loans since peer pressure acts as social collateral in these models. Offering microloans to microenterprises has been acknowledged as a crucial strategy for socioeconomic development in terms of improving the lives for microfinance beneficiaries and their households. The review of literature helps to identify gaps in research that may be succinctly stated. First, the examined literature reveals that there are several research on microfinance and its effects on socioeconomic development from various parts of the globe based on diverse theories, but there aren't many studies examining these effects in connection to metropolitan areas. Studies on the impact of microfinance in the Delhi region are particularly scarce. Second, while the majority of researchers have examined the effects of microfinance generally, few have sought to determine whether there are differences based on the beneficiary's group type such as whether they are SHG microfinance beneficiaries or JLG beneficiaries.The present study attempted to fill the above-mentioned gaps by examining the impact of microfinance onsocio-economic development (microfinance beneficiary and their household) with special reference to Delhi.The study is a cross sectional study based on primary survey. A total of 391 responses were analysed and subjected to empirical testing. Validity and reliability were ensured. Hypotheses testing was conducted using multiple linear regression. In pursuance of the research objectives and using the results of multiple linear regression, the study has been able to see the impact of microfinance by specifically analysing the impact of accessibility to microfinance loan, microfinance loan experience and microfinance group type on socio-economic development.Accessibility to microloans has been proven to significantly improve overall socio-economic development. Additionally, microfinance beneficiaries who have taken out more than one loan have greater overall socioeconomic development than beneficiaries who have taken out only one loan. As a result, the study found that joining a microfinance group and borrowing money for a microenterprise has a beneficial effect on socioeconomic development. Through the empirical testing of a conceptual framework for the influence of microfinance on socioeconomic development and its dimension, the study has theoretically contributed to the literature on microfinance. Based on primary data obtained from microfinance borrowers in Delhi the study increases understanding of microfinance and demonstrates that there is a significant and beneficial impact of microfinance on socio-economic effects at the household and individual level.
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