MICROFINANCE FOR EMPOWERMENT: AN EXAMINATION OF EFFECTIVE SELF-HELP GROUP PROJECTS IN NORTHERN TAMIL NADU

Abstract

This study focuses on the empowerment of the members of the Self-Help Group (SHG) through the use of microfinance in selected northern districts of Tamil Nadu. It highlights the socio-economic characteristics of the respondents, the reasons for joining SHGs, the uses of loans, problems encountered by the members and the recommendations for the enhancement of microfinance services. The results indicate that the main reason for forming SHGs was economic independence (62.80%), followed by the promotion of saving habits (58.47%), social recognition (50.00%) and loan facilities (44.83%). The ANOVA results for the key SHG activities show that there is a statistically significant difference between the groups (F = 20.21889, p = 0.001149). The analysis of respondents by nativity area, however, does not show a statistically significant difference (F = 10.68376, p = 0.082221). High interest rates and lack of awareness of financial management are also identified as major challenges in the study. It suggests that the socio-economic empowerment and financial resilience of SHG members can be improved by providing them with affordable credit, targeted financial literacy programmes, and better skill development and capacity building support.