self-help groups, microfinance, women empowerment, Income Generating Activities


Without personal assets, paid or self-employment, the world’s poor has found it exceptionally grueling to generate sustainable income opportunities. Where commercial financial lending demands collaterals to acquire credit, their unenviable and impoverished circumstances render the impoverished so incompetent to access external financial support mechanisms.

Micro finance has increasingly begun to be seen as a contributor to the reduction of poverty in developing countries, by creating opportunities for the poor to engage in economic and productive activities[1] [UNESCO 1997]. The concept of micro-finance involves the accessibility to collateral-free loans from financial institutions by small groups or associations of poor individuals. The membership fee collected by the group is deposited in banks as savings, which in turn imparts eligibility to these groups to access institutional financial assistance.

Microfinance is the provision of financial services to low-income clients, including consumers and the self- employed, who traditionally lack access to banking and related services. Microcredit, or microfinance, is banking the un bankable, bringing credit, savings and other essential financial services within the reach of millions of people who are too poor to be served by regular banks, in most cases because they are unable to offer sufficient collateral. In general, banks are for people with money, not for people without. It is based on the premise that the poor have skills which remain unutilized or underutilized. Microcredit fits best to those with entrepreneurial capability and possibility. Ultimately, the goal of microfinance is to give low income people an opportunity to become self-sufficient by providing a means of saving money, borrowing money and insurance. The main aim of microfinance is to empower women. Women make up a large proportion of microfinance beneficiaries. Traditionally, women (especially those in underdeveloped countries) have been unable to readily participate in economic activity. Microfinance provides women with the financial backing they need to start business ventures and actively participate in the economy. It gives them confidence, improves their status and makes them more active in decision-making, thus encouraging gender equality. According to CGAP, long-standing MFIs even report a decline in violence towards women since the inception of microfinance.[2] The most of the microcredit institutions and agencies all over the world focuses on women in developing countries. Observations and experience shows that women are a small credit risk, repaying their loans and tend more often to benefit the whole family. In another aspect it´s also viewed as a method giving the women more status in a socioeconomic way and changing the current conservative relationship between gender and class when women are able to provide income to the household. There are many reasons why women have become the primary target of microfinance services.

A recent World Bank report confirms that societies that discriminate on the basis of gender pay the cost of greater poverty, slower economic growth, weaker governance, and a lower living standard for all people.[3] At a macro level, it is because 70 % of the world’s poor are women. Women have a higher unemployment rate than men in virtually every country and make up the majority of the informal sector of most economies. They constitute the bulk of those who need microfinance services. Giving women access to microcredit loans therefore generates a multiplier effect that increases the impact of a microfinance institution’s activities, benefiting multiple generations. NABARD (2005) explains that the Self Help Group is a group with “an average size of about 15 people from a homogenous class. They come together for addressing their common problems. They are encouraged to make voluntary thrift on a regular basis. They use this pooled resource to make small interest bearing loans to their members. The process helps them imbibe the essentials of financial intermediation including prioritization of needs, setting terms and conditions and accounts keeping. This gradually builds financial discipline in all of them. They also learn to handle resources of a size that is much beyond the individual capacities of any of them. The SHG members begin to appreciate that resources are limited and have a cost. Once the groups show this mature financial behavior, banks are encouraged to make loans to the SHG in certain multiples of the accumulated savings of the SHG. The bank loans are given without any collateral and at market interest rates. The groups continue to decide the terms of loans to their own members. Since the groups’ own accumulated savings economic are part and parcel of the aggregate loans made by the groups to their members, peer pressure ensures timely repayments”.[4]

Women in India constitute about 50 % of the total population and comprise one third of the labour force. It is, therefore, important that when considering the economic development of this segment of the population, due attention is given to their socio-economic empowerment. In India, of the total population of 5.4 million active fishers [Marine and inland fisheries], 3.8 million are fishermen and 1.6 million are fisherwomen. [5] These fisherwomen are engaged in several fisheries vocations. The major activities in which women’s contribution can be noticed throughout the country are fish processing and marketing. However, their participation and contribution are increasing in the areas of aquaculture, development and education. The involvement of women in these activities generates supplemental income to support their families. Even though women are as efficient as men, earnings are not always the same. The wages for men and women are often different with men being paid at least 30 % more than that received by women. Microcredit for self-help groups is fast emerging as a promising tool of promoting income generating enterprises for reaching the ‘unreached’ for credit delivery in rural areas, particularly the women who are often considered to have very low net worth for availing any credit facilities from the formal financial institutions, the banks. Microcredit is also considered as the vehicle for achieving empowerment of the women, in all spheres viz., social, cultural, political and economic. It is a way of self-sustenance without looking for financial help or subsidy from ‘elsewhere’. In this paper the role played by Microfinance in fisher women’s empowerment are considered into three dimensions namely personnel, social and economic.

The efforts of the SHGs have played a positive role in helping the fisher folk in their socio-economic development, emancipation and empowerment. Their technical knowledge has improved, and their inter- personal and financial management skills have been sharpened. The entrepreneurship helped them to express their individuality and also increased self-confidence among members. As Muhammad Yunus, founder of Grameen Bank of Bangladesh succinctly points out, “women have plans for themselves, for their children, for their home, and the meals. They have a vision. A man wants to enjoy himself” [6]. The present study focuses on , an attempt has been made to provide insights on the fishing sector, fishing community, and focused micro-credit for fisherwomen.

Review of literature

Jayaraman (2000 and 2002) reported on the role and performance of fisherwomen SHGs in India. He found the fisherwomen SHGs performing well in availing microcredit, utilising it and repaying it in time. The microcredit programme implemented through SHGs contributed to the socio-economic welfare and empowerment of the fisherwomen. It also contributed to the eradication of usury and illicit liquor.[7] Nagayya (2000) stated that there has been a massive expansion in the formal credit delivery network in the last three decades and there is an acceptable gap in financing the genuine poor, especially in remote rural area.[8]

Deepti Agarwal (2001) reported that the status of women is low and their socio economic conditions are much more depressed than that of men.[9] Jeyesh Talati and Venkatakrishnan. (2001) explained women’s empowerment in Jhabua district, Madhyapradesh.[10] The women ‘leaders’ elected by the group members were responsible for the maintenance of group records and management of group. These women’s groups laid the foundation for the empowerment of women. Radhakrishna Rao (2002) says, Kerala’s remarkable achievementsn in education and health have been greatly facilitated by its social and physical terrain. Socially speaking, community based social reform movements competed with each other for social advancement.[11]

Shetty (2002) reported on the impact of Rural Self Help groups and other forms of micro- financing.[12] FAO (2003) reported on the best practices and success stories in microcredit programs for women in coastal fishing communities in India.[13]

Sabyasachi Das (2003) reported on the functioning of Self-Help Groups and microcredit. He reported that, NGOs gave some training to the SHGs for awareness building, entrepreneurship and skill training and some help in arranging inputs, and marketing, introduced saving and internal lending, helped in the maintenance of accounts and linked them with the banks for credit requirements.[14]

Meenambigai (2004) stated that self-help groups play a major role in transforming rural economy. Microcredit helps the rural poor to improve their standard of living and fulfills their credit needs. Microcredit encourages savings, promotes income generating activities and benefits women. [15]

Sheik Mohammed (2004) reported that Self-Help Groups worked for the success of women entrepreneurs.[16] Senthil Vadivoo and Sekar (2004) stated that the self-help groups is a movement for women empowerment; it covered women collectively struggling against direct and indirect barriers to their self-development and their social, political and economic participation. Women’s empowerment can be viewed as a continuous process of several inter-related and mutually reinforcing components. Empowerment is a process of awareness and capacity building, leading to greater participation, greater decision – making power and control the transformative action to overcome the constraints in this process.[17]

Tripathy (2004) explained economic empowerment through income generating activities through self-help groups and also explained its importance in education, mid -day meals scheme, health, agriculture and allied activities, community action and sustainable development and rural sanitation.[18]

Thus, the SHGs have been found to be an effective tool of micro-credit delivery for women empowerment and rural development. There are several success stories of how SHGs have benefited the poverty-ridden people in the rural areas in emerging empowered and how lending to SHGs have made loss-making branches of banks to turn around. Although SHGs have come to stay there are some germane issues that need to be sorted out.

Statement of the problem

Micro finance or provision of financing services to low income households has come to be accepted as the most efficacious intervention to alleviate poverty among the policy circles in the developing countries. Till recently fisherwomen under the Indian rural set up were not able to actively participate in income generating activity due to historical and social cultural reasons. Their socio economic conditions, decision taking ability and confidence level were very low. Low level of skills, lack of access to training, facilities and credit, literacy, ignorance coupled with their invisible contribution to family economy, restricted mobility as a result of gender bias and lack of linkage facilities are some of the contributory factors for the backwardness of the fisherwomen in the coastal areas. The approach towards uplifting the poor fisher women economically should be Self Help. In fact, even the individual effort is too inadequate to improve their economic status. At this juncture, organizing the poor fisher women in a group is the need of the hour. Thus the SHG is considered as the movement of self-development. The SHG is the institutional informal setup through which the micro credit is routed by the formal and semi-formal micro finance institutions to assist the poor fisher women. The NGOs on the other hand directly lend micro credit to the members of the SHGs out of their own corpus.

Micro credit for fisherwomen self-help groups is fast emerging as a promising tool of promoting income generating enterprises for reaching the unreached for credit delivery in coastal area of Uttara Kannada district. It is also considered as the vehicle for achieving empowerment of the women in all spheres viz, social, political, personnal and economic .Micro finance through SHGs has empowered the SHGs in many aspects of life. The review of literature reveals that no study has been conducted on the empowerment of women in the coastal areas of Uttara Kannada district of Karnataka state. Therefore, it was thought conducive to conduct study in different coastal villages of Uttara kannada district to assess the impact of microfinance on empowerment of fisherwomen SHG members.

The above in context, the present study titled “Role of Micro Finance on Empowerment of Fisherwomen in Coastal Karnataka”.

Objectives of the study

  1. To study the Socio-Economic status of the members of Fisherwomen SHGs in the study area
  2. To compare the impact of SHGs on the Socio-Economic conditions of fisherwomen before and after the formation of SHGs
  3. To assess the role of SHGs towards in Fisher women empowerment
  4. To suggest suitable measures for effective improvement of functioning of fisherwomen SHGs


  1. Empowerment can serve as a powerful instrument for women to achieve upward social and economic mobility and power and status in society.
  2. Micro credit is a potential tool for socio-economic empowerment of the fisherwomen in coastal area.
  3. SHGs positively impact on the confidence level of fisherwomen in the study area.

Limitations of the study

The inferences drawn for the study were based on the data collected from the specific beneficiaries in the study area selected for the study. Hence, though general observations were drawn, the outcome pertains only to the study area and the perceptions of the beneficiaries and the investigators.

Methodology of study

Exploratory Research Design is used for the study. . The study was conducted in the district of Uttara Kannada of Karnataka State. Uttara Kannada is the most backward district in fisheries in karnataka. It has a coastline of 160 kilometers. The district has Five coastal taluks. Bhatkal taluk, with 12 villages, formed the locale of the study. Bhatkal taluk has vast coastal area and a population of 17364. Two villages, namely Heble and Mavinkurve were selected to form the sample. The villages are very distinctive on account of its location in the coastal belt. Thus the study was narrowed down to the various women-Self Help Groups formed and functioning within the coastal locale. Personal visits were conducted to a number of such SHGs, with a view to further narrow down the number of SHGs to be subjected to study. Giving due consideration to important facts like category [on basis of formation of SHG], conduct of commercial activities [groups conducting and not conducting activities], representativeness of different religious community of the locale population etc, 20 Self Help Groups were finally selected, on stratified sampling basis, as final sample groups. The study predominantly depends on Primary Data. Attempt was made to elicit response from at least Five members of each of the selected 20 SHGs.. Primary data were collected by employing a structured questionnaire.

Findings of the study

The following form the major findings of the study:

Social and Economic Profile of the Respondents

Out of the total, 76.0 per cent of the respondents were married, while 10 per cent were single and 6 per cent were widowed. As regards the education of the respondents, 20 per cent had education up to +2, while 10 per cent were graduates. The rest included 37 per cent who had studied till the fifth standard. 3Occupational status of the respondents revealed that 35 per cent were self-employed, 32 per cent were housewives, 8 per cent were salaried and 25 per cent were daily labourers. As regards the monthly income, 36 per cent of the respondents belonged to the income category of Rs. 2,000 – Rs. 3,000, while 30 per cent belonged to below Rs. 1,000 and 22 per cent to Rs. 1,000 – Rs. 2,000 category.

Motivations for joining SHG

The study identified that the major motivators for the respondents in joining SHGs were their friends [27 per cent], neighbors [24 per cent], personal interest [20 per cent], NGO officials [15 per cent], and other SHG members [14 per cent].

Motivators for joining SHG

Motivators No. Percent
Friends 27 27
Neighbours 24 24
Personal Interest 15 15
NGO Officials 23 14
Other SHG Members 21
TOTAL 100 100

Source: Primary Data

It was revealed that easy access to loans [58 per cent], development of skill sets [53], participation in economic activity [53 per cent], and inculcation of savings habit [50 per cent], opportunity of social interaction [47 per cent] and participation in social activity [25 per cent] were among the major motivational factors behind the joining of the SHGs.

Reasons Frequency %
Easy Access to Loans 58 58
Development of Skill Sets 53 53
Participation in Economic Activity 53 53
Inculcation of Savings Habit 50 50
Opportunity of Social Interaction 47 47
Participation in Social Activity 25 25

Source: Primary Data

Important Roles of SHGs

The below Table shows that after joining of the SHGs income level of the individual women in income level have been increased over all percentage of (26%) and the lowest percentage of (9%) shows low level income of women when compare to before joining SHGs after poverty level decried. Awareness in children and improved literacy level of women are gradually increased.

Important Roles of SHGs

Sl. No Roles of SHGs Frequency Percentage
1 Improvement in literacy 21 21
2 Awareness in children 12 12
3 Reduce in poverty level 17 17
4 Improvement in standard of living 15 15
5 Income of respondents before joining SHG’s 9 9
6 Income of respondents after joining SHG’s 26 26
Total 100 100

Source: Primary Data

Nature of Operations and Group Characteristics of SHGs

The opinion of the respondent SHG members regarding the nature of operations of their group revealed that feelings of trust among the group members [66 per cent] and group interaction between members [52 per cent] existed at high levels. Nearly 63 per cent of respondents were highly satisfied about the operations of SHGs. Leadership qualities and accountability existed at medium levels for 67 per cent and 47 per cent respectively. As regards transparency of operations, nearly 82 per cent agreed with medium to low levels of existence of transparency. Group cohesion was medium according to 63 percent.

Opinion on Group Characteristics of SHG

Group Characteristics Level of Characteristics
High Medium Low
No. % No. % No. %
Trust Between Members 66 66 19 19 15 15
Interaction 52 52 44 44 4 4
Satisfaction 63 63 13 13 24 24
Leadership 29 29 67 67 4 4
Cohesion 29 29 63 63 9 9
Accountability 35 35 47 47 19 19
Transparency 19 19 53 53 29 29

Source: Primary Data

Role of Decision Making in Family

The below Table shows that Most of the 94 respondents (94 %) agreed they play a vital role in decision making in their houses.

Role of Decision Making in Family

Sl. No Options Frequency Percentage
1 Yes 94 94
2 No 6 6
Total 100 100

Source: Primary Data

Personal Empowerment after joining SHG

Personal empowerment achieved by the respondents after joining the SHGs was identified as being composed of improvements in confidence [62 per cent], decision-making capability [68 per cent], and mutual respect [47 per cent] at high levels, and independence [60 per cent], mobility [38 per cent], self-respect [56 per cent], and family acceptance [37 per cent] at medium levels. For 31 per cent, family acceptance, for 28 per cent, mobility and for 18 per cent, self-respect improved only by low levels.

Personal Empowerment of SHG Members

Personal Empowerment Extent of Empowerment
High Medium Low
No. % No. % No. %
Confidence 62 62 38 38 0 0
Independence 22 22 60 60 18 18
Decision making 68 68 32 32 0 0
Mobility 34 34 38 38 28 28
Self respect 26 26 56 56 18 18
Mutual respect 47 47 34 34 18 18
Family Accptance 3 31 37 37 31 31

Source: Primary Data

Social Empowerment after joining SHG

Social empowerment as achieved by the respondents after joining the SHGs were identified to be composed of improvements in participation in social programmes [61 per cent high improvement level and 39 per cent medium improvement level], organizational skill [66 per cent high and 28 per cent medium], interactive skills [48 per cent high and 52 per cent medium], group cohesiveness [43 per cent high and 57 per cent medium], awareness on social problems [47 per cent high and 43 per cent medium] , membership in other organizations [47 per cent high and 29 per cent medium], acceptance by society [37 per cent high and 43 per cent medium], public speaking skills [29 per cent high and 48 per cent medium] and awareness on rights [43 per cent low and 37 per cent medium].

Social Empowerment after joining SHG

Social Empowerment Extent of Empowerment
High Medium Low
No. % No. % No. %
Organizational kill 66 66 28 28 6 6
Group Cohesiveness 43 43 57 57 0 0
Interactive Skill 48 48 32 32 0 0
Public Speaking 29 29 48 48 23 23
Awareness on Rights 20 20 37 37 43 43
Awareness on Social Problems 47 47 43 43 9 9
Acceptance in Society 37 37 43 43 30 30
Participation in social Programmes 61 61 39 39 0 0
Membership in other Organizations 47 47 29 29 23 23

Source: Primary Data

Financial Empowerment after joining SHG

Financial empowerment achieved by the respondents after joining the SHGs were identified to be composed of improvements in income [85 per cent high improvement and 11 per cent medium improvement], financial security [56 per cent high and 23 per cent medium], financial management capability [49 per cent high and 33 per cent medium], living conditions [46 per cent medium and 39 per cent high], savings [76 per cent medium and 24 per cent high], and expenditure [61 per cent medium and 23 per cent high].

Financial Empowerment of SHG Members

Financial Empowerment Extent of Empowerment
High Medium Low
No. % No. % No. %
Income 85 85 11 11 4 4
Savings 24 24 76 76 0 0
Financial Management 49 49 33 33 18 18
Living Conditions 39 39 46 46 15 15
Expenditure 23 23 61 61 15 15
Financial Security 56 56 23 23 21 21

Source: Primary Data

Micro-Finance through SHGs

The study also identified that nearly 58 per cent of the respondents depended on their income for sources of finance, while 52 per cent depended on moneylenders for external financing sources. It was also found out that 74 per cent of the respondents depended on SHG loans provided through the bank linkage programme as a source of finance. Among the 74 per cent of the total respondents who had availed of the loan facility of the SHG- bank linkage programme, 82 per cent utilized a part of the loan amount for their children’s education, while 56 per cent utilized it for agricultural purposes and 43 per cent utilized it for marriage purposes of family members. Use of the micro finance for income generating purposes such as animal husbandry or poultry and small business ventures were limited to 11 per cent and 45 per cent, respectively. Another 34 per cent of the respondents employed a part of the money for repayment of other existing loans.


Self Help Groups of Fisherwomen can form the heart of community development activities. The pooling of minuscule and individual financial savings of the members through group activities can act as a strong back-bone for women empowerment. Supplemented by the linkages of the self-help groups with banks, thereby enabling micro-credit facilities, the financial power of these Fisherwomen gets substantially increased.

The study reveals that Women status increased after joining of the SHGs 90%.It is noticed that all the respondents agreed that micro finance brought Respect from Layman or Society and self-confidence and improved their skill. Majority of the respondents expressed that their awareness about environment improved after taking part in micro finance programs actively. Maximum number of respondents accepted that microfinance has brought economic development directly and indirectly happiness and peace in the family.

The present study evidences the existence of strong linkages of the SHGs with banks for empowerment of fisherwomen. The very reason of members, as opined by them, in joining the group is the improved chances of accessibility to loans. Also the opportunity to undertake economic activities through group efforts, and the concomitant learning of entrepreneurial and technical skill sets act as motivators for group membership. Thus, there exists strong positive relation between the reasons for joining the group, and the existence of bank linkages. The strong bank linkage that exists, can visibly enhance the opportunity of members to access loans, undertake economic activities, and develop skills.

On the realistic aspect, it is also found that the members still depend enormously on indigenous money lenders, forcing high interest payments. The high incidence of bank linkage and accessibility to finance through SHGs is still not relieving the rural population from the clutches of money lenders and exorbitant interest rates. It points to the important fact of insufficiency of funding through the bank linkage programs. Thus, the SHG- driven micro-finance may suffer from serious limitations, reducing its positive impact on empowerment. The lack of transparency in the SHG activities, and inaccessibility to official records may further hinder the effectiveness of the movement.

Probably, the most disappointing fact relating to financial access is the limited employment of SHG credit facilities for economic and other income generating activities. Use of finance for entrepreneurial activities is deplorably low. The vagaries of indebtedness can only increase by using SHG credit facilities for refinancing pre-existing loans or for financing marriages.

It is also noticed that most of the women are not aware of the trainings organized by the NGO. The NGO shall actively take part in various trainings sessions provided to all women members wherein they can gain more knowledge about the various income generating activities. There is a definite improvement in psychological well-being and social empowerment among fisher women as a result of participating in micro finance through SHG program.


Thus, what emerges from the present study is in rural area, Self Help Groups are performing very well. The study concludes that microfinance brought psychological and social empowerment than economic empowerment. Impact of micro finance is appreciable in bringing confidence, Better Access to Healthcare, skill development and empowerment. The SHG members feel free to move with their groups and leaders. It leads them to participate on various social welfare activities with good cooperation. Insufficiency of finance, lack of transparency in activities, and poor use of finance for productive, income-generating activities act as a limiting factor in achieving the intended empowerment. While interacting with the respondents, it is noticed that some members are expecting the NGO to come up with more training sessions in income generating activities. All they need is a way to develop their skills and talents by participating in various training programs.