Effectiveness of micro finance on living standards and empowerment1
V E N K A T E S H . N
K O S H Y S I N S T I T U T E O F M A N A G E M E N T S T U D I E S
Effectiveness of Micro-Finance on
Living Standards and
Empowerment in Rural Bangalore
Micro- Finance - Meaning
Microfinance is usually understood to entail the
provision of financial services to micro-
entrepreneurs and small businesses, which lack
access to banking and related services due to the
high transaction costs associated and Lack of
Educational support and Knowledge.
Characteristics of Micro-finance
Little amounts of loans and savings.
Short- terms loan (usually up to the term of one
Payment schedules attribute frequent installments
(or frequent deposits).
Installments made up from both principal and
interest, which amortized in course of time.
And the Like
Microfinance Products and Services
Products Offered By Bharitya Swamuktha Samsthe
Fortnightly General Loan (FGL)
Fortnightly Supplementary Loan (FSL)
Re-Build Loan (RBL)
Weekly General Loan (WGL)
Monthly General Loan (MGL)
Statement of the Problem
“To study effectiveness of microfinance on living standards
and empowerment in rural Bangalore.” This study is done to
understand how micro-financing is helping rural people by
providing them with employment opportunities and helping
them to improve their living standards. This study will add to
the knowledge about effectiveness of rural micro-financing in
Bangalore. Hence the present study.
Objectives of the Study
To study how microfinance works in India, with a
special reference to the rural Bangalore.
To study how microfinance helps in improving the
standard of living of rural persons.
To study the how microfinance effects the
empowerment of rural persons using analysis of
Income, Savings and the like.
Method of Research Used
Collection of Data
70% of the respondents of MFIs are women and majority of them have
no formal education, social freedom and independency.
Micro Finance is very popular source of income when compared with
other sources of finance
The procedures of obtaining loans from MFIs are much easier than
other sources of finance.
The operational assistance provided by MFIs helps the respondents to
run their business successfully and smoothly.
It is suggested that women should be given more significance to start up
their own business, to become self dependent and social freedom.
Micro finance is more popular in rural Bangalore and it is appreciated it is
suggested that MFIs should share the best practices which they have
incorporated in their day to day activities.
It is appreciated that MFIs are providing hassle free loans and the status of
these should be continued to extend their base also to urban sector.
To conclude, it can be noticed from the overall study that there is
significant impact of microfinance activities on improvement of the
living standard of the family not only in economic term but also in
social term of people living in rural areas of Bangalore. The relation
between different factors of society and family became evident and
clear, which were being neglected and not thought about during the
period of existence of only conventional banking system. From this
study it has come to the conclusions that there is a noticeable and
positive impact of microfinance activities on the living standards,
empowerment of people in rural areas around Bangalore city.