ISSN (Online) - 2349-8846
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How Does Government Microfinance Impact the Rural Poor?

Evidence from Madhya Pradesh

Sandeep Tambe (jointsecy@gmail.com), Suprava Patnaik (spatnaik@ iifm.ac.in), Jigyasa Bisaria (jigyasa@iifm.ac.in), Amitabh Pandey (apandey@iifm.ac.in), Ujjal Kumar Sarma (ujjal@iifm.ac.in), and G Ananda Vadivelu (gananda@iifm.ac.in) teach at the Indian Institute of Forest Management, Bhopal.

While microfinance companies have been studied and there is a growing consensus that they exclude the poorest, the impact of government microfinance programmes is relatively less understood. The National Rural Livelihoods Mission, which aims to reduce rural poverty by organising women into self-help groups, building capacity and providing access to microcredit is evaluated through a survey of 2,615 households in five districts of Madhya Pradesh. The focus is on four key questions. Who benefits and who gets left out? What is the pattern of household investment priorities? Is sustainable asset accumulation happening? What should be the exit strategy? It is found that the NRLM benefited the poor, while the very poor are struggling to repay the loans and getting left behind in poverty.

The authors are grateful to L M Belwal and Raman Wadhwa for providing valuable inputs. The authors also thank the anonymous reviewer for comments.

Updated On : 8th Jan, 2018

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