ROLE OF COMMERCIAL BANKS IN RURAL WOMEN EMPOWERMENT WITH SPECIAL REFERENCE TO THOOTHUKUDI DISTRICT
ABSTRACT
A bird cannot fly if its wings are not equal in strength, similarly a country cannot forge ahead if one is discriminated against the other. But the fact is that man is well placed in socio-economic setup in comparison to woman in spite of the assurances given by the Constitution of India that, “there must not be any bias in favour of either sex in respect of social, economic and other spheres”. In order to assist the rural women, both central and state governments have introduced several subsidy schemes such as Integrated Rural Development Programme (IRDP), renamed as Swarna Jayanthi Gram Swarozgar Yojana since 1999 (SJGSY), and Prime Minister’s Employment Generation Programme (PMEGP), all meant for the empowerment of rural women.
SHGs have been able to mobilize small savings either on weekly or monthly basis from persons who are not expected to have any savings. They have been able to effectively recycle the resources generated among the members for meeting the emergent credit needs of members of the groups. Considering the importance of the rural women, the Researcher has studied about the role of Commercial Banks in the rural women empowerment.
Empowerment literally means becoming powerful. The World Bank defined empowerment as “the process of increasing the capacity of Individuals or groups to make choices and to transfer these choices into desired action and outcomes. The global conference on women empowerment, 1998 highlighted that empowerment is the best way of making women in participation of developments. The Food and Agriculture organization (FAO) has also emphasized on strengthening and motivating women at the grass root. That can be achieved by infusing in them a strong, positive, self image, critical thinking, group cohesion, decision making and equal participation.[1]
However, due to the growth of industrialization, urbanization, technical progress, education and democratic system in a country, the traditional bound Indian society is now undergoing a change and women are now seeking gainful employment in several fields.
REVIEW OF LITERATURE
Chandrasekaran[2] in his study, “Impact of Bank Lending on the Economics Status of the Weaker Sections of Tamil Nadu. A Study of Scheduled Castes in Tiruvannamalai Sambuvarayar District”, found that there was no significant change in the saving position of sample households. Moreover their economic conditions did not allow them to save money. Whenever they had surplus money they used it for the purchase of household assets.
Laxminadhan[3], in his study, “Performance of NABARD Schemes for Weaker Sections in Andra Pradesh”, observed that there was a gap between the amount of loan financed to weaker sections by the commercial banks and the amount of refinance raised from NABARD. The important reasons for such a gap were poor recovery, lack of technical expertise in the area of operation, non-availability of certain inputs in time, frequent shifting of beneficiaries from one activity to another and existing policy decisions of the NABARD.
STATEMENT OF THE PROBLEM
Generally the women entrepreneurs face difficulties in getting finance which is a critical resource for venture creation. Women believe that lending practices of the Banks and Government funding agencies were too restrictive for them. They used their own personal saving to start the business. As per RBI Guidelines, 40 percent out of the total advances by commercial banks should go to the priority sectors. An attempt has been made by the researcher to study the role of commercial banks in priority sectors and lending the fulfillment of RBI norms and also the socio-economic profile of sample respondents, along with their family profile, evaluating the role of commercial banks in empowering the women in terms of income, asset creation, employment generation, self confidence, positive attitude and the opinions of bankers on the rural credit in Tuticorin District have also been investigated.
SCOPE OF THE STUDY
This study mainly confined to the role played by the commercial bank in the rural women empowerment in Thoothukudi district, in terms of income and asset creation, empowerment, per capital income etc.
Objectives of the Study
The researcher has preceded her study by framing the following objectives:
- To examine the socio-economic profile of the sample respondents and their family profile.
- To analyze the Empowerment of women in terms of Economic, Social and Political.
- To offer suitable suggestions on the basis of the findings of the study.
SAMPLING DESIGN
For the purpose of this study a sample of 300 beneficiaries have been selected among the respondents who borrowed loans.
COLLECTION OF DATA
Both primary and secondary data were collected for the study. The primary data were collected by framing two sets of interview schedule distributed to the beneficiaries and the bankers each.
Secondary data were collected from the RBI bulletins, government publications, journals, books, newspapers and annual credit plans and ledgers of commercial banks in Thoothukudi district.
TOOLS OF ANALYSIS
In order to examine the relationship between income of the respondents, family characteristics and their empowerment t – test and Kruskal Wallis Test was applied.
CLASSIFICATION OF COMMERCIAL BANKS FUNCTIONING IN THOOTHUKUDI DISTRICT
Bank branches are shown in Table 1.
TABLE 1
CLASSIFICATION OF COMMERCIAL BANKS FUNCTIONING IN THOOTHUKUDI DISTRICT
| Sl. No. | Type of Commercial Banks | Number of Branches as on 31.03.2014 | Percentage |
| 1.
2. 3. |
State Bank of India (SBI Group)
National Commercial Bank Private Sector Commercial Bank |
19
92 38 |
12.75
61.75 25.50 |
| Total | 149 | 100.00 |
Source: State Bank of India, Thoothukudi Annual Credit Plan 2011-2012,
Lead bank Office, Thoothukudi.
Among the various commercial banks functioning in Thoothukudi district in terms of total number of branches functioning NCBs top the list with 61.75 per cent followed by PVTBs with 25.50 per cent.
CLASSIFICATION OF THE RESPONDENTS ON THE BASIS OF INCOME
The monthly income of the respondents have been presented in the Table 2
TABLE 2
CLASSIFICATION OF MONTHLY INCOME OF THE RESPONDENTS
| Monthly Income (in Rs.) | Non-Agricultural Activities | Agricultural and Allied Activities |
| Below 5,000 | 16 (8.79) | 13
(11.02) |
| 5,000 – 10,000 | 136
(74.73) |
93
(78.81) |
| 10,000 and above | 30
(16.48) |
12
(10.17) |
| Total | 182 (100) | 118 (100) |
Source: Survey Data.
Note: Figures in brackets are percentage to the total.
Frame Work of Analysis
In order to examine the hypothesis that per capita income /assets is found to be higher during post loan period than pre loan period, the following formula for t-test[4] has been used.
Impact of COMMERCIAL BANK LOAN on per capital income of borrowers per annum
Per Capita Annual Income
The impact of commercial bank loan under SJSRY, PMEGP and Thatco on per capita income of borrowers is furnished in Table 3
Table 3
Impact of COMMERCIAL BANK LOAN on per capita income of borrowers per annum
| Sl.
No. |
Per capita Income Group | No. of Beneficiaries | Pre-loan Period
Average per capita Income |
Post-loan Period
Average per capita Income |
Percentage Increase | t-value |
| 1. | Below 2,000 | 72 | 2,754.29 | 3,876.11 | 41.63 | 5.25* |
| 2. | 2,000-3,000 | 124 | 3,676.33 | 5,111.56 | 39.31 | 4.26* |
| 3. | 3,000-4,000 | 66 | 4,451.48 | 6,085.26 | 37.61 | 5.65* |
| 4. | 4,000-5,000 | 28 | 4,824.73 | 6,626.46 | 26.04 | 6.14* |
| 5. | 5,000-6,000 | 10 | 5,891.41 | 6,489.49 | 11.18 | 4.75* |
| Overall | 300 | 4,775.41 | 5,111.26 | 6.98 | 5.28* | |
*Significant at 5 per cent level.
The distribution of average per capita income of the beneficiaries before and after receiving the loan assistance under commercial bank loan under SJSRY, PMEGP and Thatco has been furnished in Table 3 It is observed that the percentage increase in per capita income varied between 11.18 per cent and 41.63 per cent. The highest increase in per capita income was found in the income group below Rs.2000, at 41.63 per cent followed by the income group of Rs.2000-3000 where the increase was 39.31 per cent. The percentage increase in per capita income was found to decline with higher income groups.
The sector-wise impact on the changes in per capita income of the borrowers commercial bank loan under SJSRY, PMEGP and Thatco has revealed that the absolute change in per capita income has been found high in agricultural and allied activities than in non-agriculture activities. Percentage-wise revealed 54.28 per cent increase in per capita income in agricultural sector while 51.69 per cent increase in per capita income was found in non-agricultural activities. As per t-test, the null hypothesis is accepted.
On the whole, there has been a positive increase in per capita income of the beneficiaries even though the percentage increase has been observed to vary for different types of ventures.
Changes in per capita income of commercial bank loan under SJSRY, PMEGP and thatco beneficiaries Families Sector-Wise
The details of sector-wise changes in per capita income has been presented in Table 4
Table 4
Changes in per capita income of commercial bank loan under SJSRY, PMEGP and thatco beneficiaries Families Sector-Wise
| Sl.
No. |
Sector | No. of Beneficiaries | Pre-loan Period
Average per capita Income |
Post-loan Period
Average per capita Income |
Percentage Increase | t-value |
| 1. | Non-agricultural activities | 182 | 2,974.65 | 4,466.67 | 51.69 | 3.31* |
| 2. | Agriculture and Allied Activities | 118 | 2,718.19 | 4,164.18 | 54.28 | 5.19* |
| Overall | 300 | 2,997.42 | 3,765.97 | 26.74 | 3.31 | |
*Significant at 5 per cent level.
Table 4 shows that the average per capita income of the beneficiaries before and Data was collected regarding the per capita income of the beneficiaries before and after getting financial assistance under the commercial bank loan under SJSRY,PMEGP and Thatco. As per t-test, a higher income was observed during post-loan period that pre-loan period.
Family Asset Positions Before and After Joining the Commercial
Bank Loan under SJSRY,PMEGP and Thatco
The distribution of assets among the four different asset classes which shows the average family assets of the respondents before and after getting financial assistance under commercial bank loan under SJSRY, PMEGP and Thatco has been presented in table 5.3.
Table 5
Classifications of family assets before and after joining the commercial bank loan under SJSRY, PMEGP
and thatco (in Rs.)
| Sl.
No. |
Asset Classes (in Rs.) | No. of Beneficiaries | Pre-loan Period
Average per capita Asset |
Post-loan Period
Average per capita Asset |
Percentage Increase | t-value |
| 1. | Below 20,000 | 96 | 16,897.48 | 26,117.19 | 55.57 | 5.32* |
| 2. | 20,000-30,000 | 128 | 22,467.37 | 37,767.19 | 64.85 | 5.19* |
| 3. | 30,000-40,000 | 47 | 39,761.89 | 59,417.19 | 50.59 | 4.17* |
| 4. | 40,000 and above | 29 | 46,618.37 | 67,876.11 | 47.59 | 5.19* |
| Overall | 300 | 27,347.12 | 39,998.19 | 47.26 | 5.81* | |
*Significant at 5 per cent level.
As far as the assets of the family concerned there has been an increase in the assets position of the beneficiaries after getting financial assistance under commercial bank loan under SJSRY, PMEGP and Thatco. The percentage of increase in assets is found to be the highest i.e. 64.83 per cent for those in the asset group of Rs.20,000-30,000. It is followed by 55.57 per cent for the asset class below Rs.20,000. An increase of 50.69 per cent and 47.59 per cent in asset position is found in the asset classes of Rs.30,000-40,000 and above respectively. It has been found out that the commercial bank loan is successful in improving the standard of living of the borrowers’ families through improvement in their assets position. As per t-test, asset was found to be higher during post-loan than pre-loan period.
Changes in Family assets during pre-loan and post-loan periods – Sector-wise
Changes in family assets during pre-loan and post-loan period for the different types of ventures have been depicted in Table 6.
Table 6
Changes in Family assets during pre-loan and
post-loan periods – Sector-wise
| Sl.
No. |
Sector | No. of Beneficiaries | Pre-loan Period
Average per capita asset |
Post-loan Period
Average per capita asset |
Percentage Increase | t-value |
| 1. | Non-agricultural activities | 182 | 31,319.19 | 49,818.69 | 58.06 | 3.21* |
| 2. | Agricultural and allied activities | 118 | 21,965.66 | 36,466.30 | 62.49 | 4.21 |
| Overall | 300 | 25,367.19 | 36,976.99 | 51.72 | 4.19 | |
*Significant at 5 per cent level.
In absolute terms, an increase in the assets has been found to be the highest in agricultural sector than that of in non-agricultural sector. Percentage-wise there has been 62.49 per cent increase in asset position for those engaged in agricultural and allied activities followed by a 58.06 per cent increase in non-agricultural activities of the families of the beneficiaries. According to the t-test, in both non-agricultural and agricultural and allied activities, the asset was higher during post-loan than pre-loan period.
Kruskal Wallis Test (or H Value)
In order to test the significant difference in the perception score of different groups of respondents, based on personal variables like age, Community, income, occupation and Qualification, the Kruskal Wallis Test (or H test) was used.
RELATIONSHIP BETWEEN AGE AND PERCEPTION BENEFICIARY
In order to test whether there is any relationship between age and perception to the beneficiary for the growth and development of women empowerment in the study area,
Null Hypothesis:
“There is no significant difference between age and their perception regarding To test the null hypothesis the Kruskal Wallis Test was applied and the result is shown in Table5.5.
TABLE 7
Relationship between Age and Perception regarding the Growth and Development of Women Empowerment
| SL.NO. | Factors | H.Value | Level of Significance | Results |
| 1. | Economic Empowerment | 5.996 | 0.050 | S. |
| 2. | Social Empowerment | 1.542 | 1.463 | N.S |
| 3. | Psychological Empowerment | 0.864 | 0.649 | N.S |
| 4. | Political Empowerment | 2.300 | 0.3.17 | N.S |
Source: Computed Primary Data.
That as the level of significance for overall perception is more than 0.05, the null hypothesis is accepted.
Hence, it is concluded that there is no significant difference among the groups of respondents based on age and perception regarding the growth and development of women empowerment in the study area. It shows that age does not influence the perception of the beneficiaries regarding the growth and development of women empowerment in the study area.
RELATIONSHIP BETWEEN COMMUNITY AND PERCEPTION
In order to test whether there is any relationship between community and perception regarding the growth and development of women empowerment in the study area.
Null Hypothesis:
“There is no significant difference between community and their perception regarding the growth and development of women empowerment in the study area.
TABLE 8
Relationship between community and Perception regarding the Growth and Development of Women Empowerment in the Study Area
| SL.NO. | Factors | H.Value | Level of Significance | Results |
| 1. | Economic Empowerment | 67.438 | 0.000 | S. |
| 2. | Social Empowerment | 21.593 | 0.000 | S. |
| 3. | Psychological Empowerment | 53.649 | 0.000 | S. |
| 4. | political Empowerment | 11.452 | 0.010 | S. |
Source: Computed Primary Data.
It is evident from Table 8
That as the level of significance for overall perception is less than 0.05, the null hypothesis is rejected.
Hence, it is concluded that there is a significant difference among the groups of respondents based on community and perception regarding the growth and development of women empowerment in the study area. It shows that age does not influence perception of the beneficiaries regarding the growth and development of women empowerment in the study area.
FINDINGS
The analysis revealed that more than 45 per cent of the respondents belong to the age group of 30-40 years in both sectors. Further, it has been found out that more than 90 percentages of the sample beneficiaries have been well educated and 50 per cent of them were graduates, post-graduates and possessed technical qualification in both the sectors.
The economic status of the sample beneficiaries indicates that 74.73 percentage and 78.81 per cent of the respondents come under the monthly income category of Rs.5,000 – Rs.10,000 in non-agricultural and agricultural and allied activities respectively. 16.48 per cent and 10.17 per cent of them come under the income category of Rs.10, 000 and above in both the activities respectively.
Regarding the perception of beneficiaries’ kruskal wallis test has been carried out and to examining the empowerment of women beneficiaries in non-agricultural and agricultural and allied activities. The framed null hypothesis accepted and it may be concluded that the age does not influence the perception the beneficiaries for the growth and development of women empowerment.
CONCLUSION
From the analysis, it is observed that an effort has been to assess the impact of commercial bank credit in terms of income and assets generations. It has been found that due to income generation after getting the loan there has been very high increased.
As per t-test, established null hypothesis has been accepted and it may be concluded that per capita income of the beneficiaries is found to be higher during the post-loan period than in the pre- loan period.
With regard to the asset position, it has been found that after getting the loan, the position of the beneficiaries has been improved, The results of t-test showed that there was a significant difference in per capita assets between per and post-loan periods. The venture-wise increase in the asset positions has been found to be the highest in the case of agricultural and allied activities, followed by non-agricultural activities and overall. Regarding the perception of women beneficiaries the framed hypothesis is accepted towards Age, Religion, Community, Marital status and the Educational Qualification and Income between the perception.
[1] K. Manoharan Nair and B.Girija, micro finana – “ The New development paradign for poverty Eradication and women’s employment” – Kurukshetra vol 53, No.6, April 2005,P 19.
[2] T. Chandrasekaran, “Impact of Bank lending on the Economic Status of the Weaker Section of Tamil Nadu – A Study of Schedule Castes in Tiruvannamalai, Sambuvarayan District,” Finance India, Vol.XV No.1 March 2001, p.189-194.
[3] K. Laxminadhan, “Performance of NABARD schemes for Weaker Sections in Andra Pradesh”, Finance India, Vol. XV No.3, September 2001, pp.973-979.
[4]S.P.Gupta, Statistical Methods, Sultan Chand & Sons, New Delhi, 2002, p.916.
REFERENCES
- Agarwal and Kundanlal, Rural Economy of India, Vikas Publishing House Pvt. Ltd., New Delhi, 1990.
- Berkeley Hill and Derik Ray, Economics of Agriculture, Food, Farming and Rural Economy, Prentice Hall of India, 1987.
- Darity Jr. William, (ed.), Economics and Discrimination Vol.I, Elgar Reference Collection, U.S.A., 1995.
- Dhawan, B.D., Studies in Agricultural Investments and Rural Savings, Common Wealth Publishers, New Delhi, 1998.
- Census of India, 2001, Office of the Assistant Director of Statistics, Sivaganga.
- Credit Requirements for Agriculture, (New Delhi, NCAR, 1974).