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Microfinance and Its Role in Financial Empowerment of Women in India
Subject area: Management and Commerce · Area of research: Women Empowerment
DOI: https://doi.org/10.64388/IREV9I10-1715864
Abstract
Financial inclusion serves as a cornerstone for the economic and social advancement of any nation by ensuring that financial services reach the most vulnerable segments of society. In recent years, India has witnessed a significant transformation in its rural economy due to the expansion of microfinance institutions (MFIs) and Self-Help Groups (SHGs). These institutions provide small-scale credit, savings, and insurance to individuals—primarily women—who lack the collateral required by traditional banks. Consequently, microfinance has emerged as a powerful tool for poverty alleviation and gender-focused empowerment. The present study, titled “Microfinance and its Role in Financial Empowerment of Women in India,” aims to evaluate the socio-economic impact of micro-credit on women’s lives. The research focuses on identifying how microfinance facilitates income generation, promotes consistent savings habits, and increases women’s participation in household decision-making processes. Furthermore, the study investigates the awareness levels regarding financial products and the overall satisfaction of borrowers with the services provided by MFIs and SHGs. The study. is based on primary data collected from 121 respondents through a structured questionnaire distributed via online platforms such as WhatsApp groups and social media networks. The findings of the study reveal that microfinance significantly contributes to the economic upliftment of women, with over 75% of respondents reporting a steady increase in their monthly household income. The statistical analysis proves a significant correlation between education and service awareness suggesting that while microfinance is effective, its success is deeply tied to literacy levels. The research concludes that while microfinance is a successful model for financial inclusion, challenges such as high interest rates, complex documentation, and a lack of formal training still exist. The study suggests that MFIs should integrate mandatory financial literacy programs and simplify digital loan processing to ensure long-term sustainability and deeper empowerment for women in rural India.
Keywords
Microfinance, Women Empowerment, Financial Inclusion, Self-Help Groups (SHGs), Chi-Square Analysis, NBFC-MFI.
How to cite this paper
@article{1715864,
author = {Rohit Khushbu Jagdishbhai, Rana Urvishaben Nayankumar},
title = {Microfinance and Its Role in Financial Empowerment of Women in India},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {9},
number = {10},
pages = {123-128},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1715864.pdf},
abstract = {Financial inclusion serves as a cornerstone for the economic and social advancement of any nation by ensuring that financial services reach the most vulnerable segments of society. In recent years, India has witnessed a significant transformation in its rural economy due to the expansion of microfinance institutions (MFIs) and Self-Help Groups (SHGs). These institutions provide small-scale credit, savings, and insurance to individuals—primarily women—who lack the collateral required by traditional banks. Consequently, microfinance has emerged as a powerful tool for poverty alleviation and gender-focused empowerment. The present study, titled “Microfinance and its Role in Financial Empowerment of Women in India,” aims to evaluate the socio-economic impact of micro-credit on women’s lives. The research focuses on identifying how microfinance facilitates income generation, promotes consistent savings habits, and increases women’s participation in household decision-making processes. Furthermore, the study investigates the awareness levels regarding financial products and the overall satisfaction of borrowers with the services provided by MFIs and SHGs. The study. is based on primary data collected from 121 respondents through a structured questionnaire distributed via online platforms such as WhatsApp groups and social media networks. The findings of the study reveal that microfinance significantly contributes to the economic upliftment of women, with over 75% of respondents reporting a steady increase in their monthly household income. The statistical analysis proves a significant correlation between education and service awareness suggesting that while microfinance is effective, its success is deeply tied to literacy levels. The research concludes that while microfinance is a successful model for financial inclusion, challenges such as high interest rates, complex documentation, and a lack of formal training still exist. The study suggests that MFIs should integrate mandatory financial literacy programs and simplify digital loan processing to ensure long-term sustainability and deeper empowerment for women in rural India.},
keywords = {Microfinance, Women Empowerment, Financial Inclusion, Self-Help Groups (SHGs), Chi-Square Analysis, NBFC-MFI.},
month = {April},
doi = {https://doi.org/10.64388/IREV9I10-1715864}
}