The Role of Micro-Finance and Self-Help Groups in Poverty Alleviation and Development of Socio-Economic Structure in the State of Andhra Pradesh, India
Background of the Study
Poverty is one of the problems faced by Third World nations, and this largely affects the economy, politics, and society of any nation. Along with poverty, many other social problems or issues can be pointed out including unemployment, lack of education, lack of proper governance, and over population. These problems are associated with poverty, and most of the time regarded as causes or effects. Similarly, poverty is also one of the main problems in Andhra Pradesh, a state in India, which becomes the source of other problems of those who live there.
In relation to poverty, one of the strategies of governments of alleviating the effects of it is through micro financing. It has been reported that micro financing is referred to as the practice of providing financial services, including micro credit, micro savings and micro insurance to poverty-stricken or poor individuals, such that they are assisted to collect large sums of money, in order to expand their choices and help them reduce the risks they face (2007). With micro financing, poor individuals are provided with resources, which he or she can use in order to help him or herself from the problems they encounter. In addition to micro financing is the help or aid provided by self-help groups, which can be relied on to giving advice and support for the improvement of the problematic individuals. Thus, the role of micro financing and self-help groups somehow help alleviate poverty, and even promote the development of the socioeconomic structure in Andhra Pradesh, India. Micro financing and self-help groups are common strategies of assisting poor individuals in Andhra Pradesh, India. Through this research study, the importance of the two strategies will be evaluated, including its effects to the citizens of Andhra Pradesh, and their response to the strategies.
Research Aim
The primary aim of this research proposal is to evaluate how different models of micro finance and Self-Help Groups (SHG) work in the State of Andhra Pradesh in empowering the poor to become economically reliant. In addition, the research proposal also aims to determine the hurdles or problems that are being faced by the citizens of the State. Problems of the persons or agencies providing the micro finances and Self-Help Groups will also be discussed. Moreover, the opportunities of for the success of individuals who have been supported by micro financing and SHG will be evaluated.
Research Objectives
This research proposal will focus on the following objectives
I. To evaluate how the models of micro finance work in Andhra Pradesh
II. To evaluate how the models of Self Help Groups (SHG) work in Andhra Pradesh
III. To identify their SWOT (Strengths, Weaknesses, Opportunities and Threats)
IV. To identify the problems encountered in employing micro financing and SHG strategies
V. To determine the effects of these two strategies to the life of the citizens of Andhra Pradesh, especially to the women and children in the society
Review of Related Literature
In the age of advanced technology and communication, many nations have already become updated with the use of computers and the Internet, which are currently used for several purposes. The use of technology and communication enabled many nations to enjoy its advantages in terms of the success and the development of their business, politics, society, and most especially of their economy. Unfortunately, such advances can only be enjoyed by the First World nations. With this, most Third World nations, such as India, could not take advantage of such use of technology and communications compared with other advanced countries. Thus, suffers due to poverty and all other factors associated with it. In relation to poverty in India, a particular state that largely suffers because of it is the state of Andhra Pradesh. The main occupation and source of livelihood of the citizens of rural Andhra Pradesh is agriculture labor, with households largely relying upon wage labor income from it. On the other hand, citizens of urban Andhra Pradesh rely on salaried jobs, with employment categories associated with mean consumption levels. Indications of poverty include the high Illiteracy rates among children, gender inequalities, the lack of sanitation and proper housing, and the lack for nutrition and food security (2004). With this, several projects and programs in relation of the alleviation of poverty are being developed to make sure that the citizens of Andhra Pradesh will be aided. Projects with the aim to alleviate poverty and all other factors associated with it include the Income Enhancement Programs, such as the Integrated Rural Development Program or IRDP, the Development of Women and Children in Rural Areas, and Wage Employment Programs ( 2002).
In addition to such programs is the implementation of micro financing and self-help group strategies that aim for the same goals, which is providing financial assistance and aid to the poor citizens of Andhra Pradesh. As defined, microfinance refers to small-scale financial services for credits and deposits, which are provided to individuals who do farming, fishing and herding to be able to operate small enterprises where goods are produced, recycled, repaired, and traded (2006). With the help of microfinance, these individuals are able to gain income from renting out small amounts of land, including vehicles, draft animals, machinery, and tools (2006). Likewise, aid and assistance can be provided to poor citizens, through self-help groups, which manage and lend their accumulated savings and externally leveraged funds to their members (2002). However, although many programs in relation to micro financing are implemented, most poor citizens are still stricken with poverty, with no opportunity to obtain money and resources from help groups and programs. It has been reported that 80% of the poor do not have any savings, and 91% are without any formal credit, with the poorest of the poor excluded from the programs, and the charging of a significant amount of interest rates (2006). With this data, it can be observed not all poor citizens in Andhra Pradesh are able to obtain financial assistance and aid from microfinance institutions and self-help groups. This indicates that there is some sort of discrimination and injustice in providing financial help to citizens, given the fact that these institutions must be the ones giving the poor citizens the chance for success and financial advancement.
Research Methodology
As previously stated, the purpose of this research proposal is to evaluate how the different models of micro finance and self help groups work in Andhra Pradesh in empowering the poor. In order to complete an efficient study, the research proposal will comprise of stages. Stages include a detailed literature search, drafting of the literature, revising of the literature, planning and organizing the research, scheduling, collating and analyzing the data generated in using different sources, writing the results and analysis, writing the full research paper, proofreading of the research paper, and the final submission of the research study.
The data to be used in this research proposal will come from primary and secondary research. For the primary data, a questionnaire will be used and will be distributed to the respondents of the study. On the other hand, the secondary data of the research study will be from published literatures and sources, which would support or negate the findings of the study. A survey will be conducted to 80 respondents from the population of poor citizens of Andhra Pradesh, representing 80 families. Forty respondents will come from the urban areas and 40 respondents will come from the rural areas of the state. The respondents that will be considered will belong to the age range of 20 to 50 years olds, particularly the women, as being the working class and considered able of obtaining work from the community, regardless of the type of work. The survey will be carried out within a period of 3 to 4 weeks, with the aim of helping the respondents in understanding the survey due to illiteracy problems. Through this method, the ontological and epistemological basis of this research study can be conducted, because the opinions and views of the respondents will be obtained, thus, exposing the truth in terms of seeking financial assistance and help from microfinance institutions, based on their perspective. In addition, their beliefs and justifications regarding the microfinance institutions will be learned through the survey-questionnaire, which will be further supported or negated in using the secondary data that will be gathered from a number of relevant sources.
This type of research methodology will be used because the survey aims to know how the different models of micro financing and self-help groups affect the economic reliance of poor citizens in Andhra Pradesh, and with the use of the survey, the opinions and views of respondents, having a poor state will be obtained and learned. Respondents from both the urban and the rural parts of Andhra Pradesh will be surveyed to be able to make a comparison on how they are affected economically. A survey-questionnaire will be the best way in obtaining such information, for through a survey with a number of questions, the needed information will be obtained from the respondents, with the minimal time needed and allotted for accomplishment. The particular target respondents of this research study are the women respondents for they are actually the ones more inclined in obtaining livelihood for their families and children. The women in the society also need more financial resources to be able to provide for their families, thus, more prone to seeking help from microfinance institutions. With this research methodology, the research study will be able to obtain the needed and relevant information for analysis and discussion.
To manage the progress of the research proposal, a defined time plan is illustrated to keep the report up to date.
TIME PLAN
Submission of the proposal
3rd week of May, 2007
Draft of literature search
June 2007
Review and planning the research
June 2007
Drafting the questionnaire
July 2007
Conducting the survey
July 2007
Analyzing the data gathered
August 2007
Completion of final draft of report
August 2007
Final writing and revision of report
September 2007
Submission of the report
September 2007
References
The Role of Micro-Finance and Self-Help Groups in Poverty Alleviation and Development of Socio-Economic Structure in the State of Andhra Pradesh, India
Background of the Study
Poverty is one of the problems faced by Third World nations, and this largely affects the economy, politics, and society of any nation. Along with poverty, many other social problems or issues can be pointed out including unemployment, lack of education, lack of proper governance, and over population. These problems are associated with poverty, and most of the time regarded as causes or effects. Similarly, poverty is also one of the main problems in Andhra Pradesh, a state in India, which becomes the source of other problems of those who live there.
In relation to poverty, one of the strategies of governments of alleviating the effects of it is through micro financing. It has been reported that micro financing is referred to as the practice of providing financial services, including micro credit, micro savings and micro insurance to poverty-stricken or poor individuals, such that they are assisted to collect large sums of money, in order to expand their choices and help them reduce the risks they face ( 2007). With micro financing, poor individuals are provided with resources, which he or she can use in order to help him or herself from the problems they encounter. In addition to micro financing is the help or aid provided by self-help groups, which can be relied on to giving advice and support for the improvement of the problematic individuals. Thus, the role of micro financing and self-help groups somehow help alleviate poverty, and even promote the development of the socioeconomic structure in Andhra Pradesh, India. Micro financing and self-help groups are common strategies of assisting poor individuals in Andhra Pradesh, India. Through this research study, the importance of the two strategies will be evaluated, including its effects to the citizens of Andhra Pradesh, and their response to the strategies.
Research Aim
The primary aim of this research proposal is to evaluate how different models of micro finance and Self-Help Groups (SHG) work in the State of Andhra Pradesh in empowering the poor to become economically reliant. In addition, the research proposal also aims to determine the hurdles or problems that are being faced by the citizens of the State. Problems of the persons or agencies providing the micro finances and Self-Help Groups will also be discussed. Moreover, the opportunities of for the success of individuals who have been supported by micro financing and SHG will be evaluated.
Research Objectives
This research proposal will focus on the following objectives
I. To evaluate how the models of micro finance work in Andhra Pradesh
II. To evaluate how the models of Self Help Groups (SHG) work in Andhra Pradesh
III. To identify their SWOT (Strengths, Weaknesses, Opportunities and Threats)
IV. To identify the problems encountered in employing micro financing and SHG strategies
V. To determine the effects of these two strategies to the life of the citizens of Andhra Pradesh, especially to the women and children in the society
Review of Related Literature
In the age of advanced technology and communication, many nations have already become updated with the use of computers and the Internet, which are currently used for several purposes. The use of technology and communication enabled many nations to enjoy its advantages in terms of the success and the development of their business, politics, society, and most especially of their economy. Unfortunately, such advances can only be enjoyed by the First World nations. With this, most Third World nations, such as India, could not take advantage of such use of technology and communications compared with other advanced countries. Thus, suffers due to poverty and all other factors associated with it. In relation to poverty in India, a particular state that largely suffers because of it is the state of Andhra Pradesh. The main occupation and source of livelihood of the citizens of rural Andhra Pradesh is agriculture labor, with households largely relying upon wage labor income from it. On the other hand, citizens of urban Andhra Pradesh rely on salaried jobs, with employment categories associated with mean consumption levels. Indications of poverty include the high Illiteracy rates among children, gender inequalities, the lack of sanitation and proper housing, and the lack for nutrition and food security (2004). With this, several projects and programs in relation of the alleviation of poverty are being developed to make sure that the citizens of Andhra Pradesh will be aided. Projects with the aim to alleviate poverty and all other factors associated with it include the Income Enhancement Programs, such as the Integrated Rural Development Program or IRDP, the Development of Women and Children in Rural Areas, and Wage Employment Programs ( 2002).
In addition to such programs is the implementation of micro financing and self-help group strategies that aim for the same goals, which is providing financial assistance and aid to the poor citizens of Andhra Pradesh. As defined, microfinance refers to small-scale financial services for credits and deposits, which are provided to individuals who do farming, fishing and herding to be able to operate small enterprises where goods are produced, recycled, repaired, and traded (2006). With the help of microfinance, these individuals are able to gain income from renting out small amounts of land, including vehicles, draft animals, machinery, and tools (2006). Likewise, aid and assistance can be provided to poor citizens, through self-help groups, which manage and lend their accumulated savings and externally leveraged funds to their members (2002). However, although many programs in relation to micro financing are implemented, most poor citizens are still stricken with poverty, with no opportunity to obtain money and resources from help groups and programs. It has been reported that 80% of the poor do not have any savings, and 91% are without any formal credit, with the poorest of the poor excluded from the programs, and the charging of a significant amount of interest rates (2006). With this data, it can be observed not all poor citizens in Andhra Pradesh are able to obtain financial assistance and aid from microfinance institutions and self-help groups. This indicates that there is some sort of discrimination and injustice in providing financial help to citizens, given the fact that these institutions must be the ones giving the poor citizens the chance for success and financial advancement.
Research Methodology
As previously stated, the purpose of this research proposal is to evaluate how the different models of micro finance and self help groups work in Andhra Pradesh in empowering the poor. In order to complete an efficient study, the research proposal will comprise of stages. Stages include a detailed literature search, drafting of the literature, revising of the literature, planning and organizing the research, scheduling, collating and analyzing the data generated in using different sources, writing the results and analysis, writing the full research paper, proofreading of the research paper, and the final submission of the research study.
The data to be used in this research proposal will come from primary and secondary research. For the primary data, a questionnaire will be used and will be distributed to the respondents of the study. On the other hand, the secondary data of the research study will be from published literatures and sources, which would support or negate the findings of the study. A survey will be conducted to 80 respondents from the population of poor citizens of Andhra Pradesh, representing 80 families. Forty respondents will come from the urban areas and 40 respondents will come from the rural areas of the state. The respondents that will be considered will belong to the age range of 20 to 50 years olds, particularly the women, as being the working class and considered able of obtaining work from the community, regardless of the type of work. The survey will be carried out within a period of 3 to 4 weeks, with the aim of helping the respondents in understanding the survey due to illiteracy problems. Through this method, the ontological and epistemological basis of this research study can be conducted, because the opinions and views of the respondents will be obtained, thus, exposing the truth in terms of seeking financial assistance and help from microfinance institutions, based on their perspective. In addition, their beliefs and justifications regarding the microfinance institutions will be learned through the survey-questionnaire, which will be further supported or negated in using the secondary data that will be gathered from a number of relevant sources.
This type of research methodology will be used because the survey aims to know how the different models of micro financing and self-help groups affect the economic reliance of poor citizens in Andhra Pradesh, and with the use of the survey, the opinions and views of respondents, having a poor state will be obtained and learned. Respondents from both the urban and the rural parts of Andhra Pradesh will be surveyed to be able to make a comparison on how they are affected economically. A survey-questionnaire will be the best way in obtaining such information, for through a survey with a number of questions, the needed information will be obtained from the respondents, with the minimal time needed and allotted for accomplishment. The particular target respondents of this research study are the women respondents for they are actually the ones more inclined in obtaining livelihood for their families and children. The women in the society also need more financial resources to be able to provide for their families, thus, more prone to seeking help from microfinance institutions. With this research methodology, the research study will be able to obtain the needed and relevant information for analysis and discussion.
To manage the progress of the research proposal, a defined time plan is illustrated to keep the report up to date.
TIME PLAN
Submission of the proposal
3rd week of May, 2007
Draft of literature search
June 2007
Review and planning the research
June 2007
Drafting the questionnaire
July 2007
Conducting the survey
July 2007
Analyzing the data gathered
August 2007
Completion of final draft of report
August 2007
Final writing and revision of report
September 2007
Submission of the report
September 2007
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