This research was conducted with the intention of helping women in rural areas of developing countries like India. To be vulnerable is to be subjected to discrimination and stigmatization, which puts one at a greater risk of experiencing social, economic, cultural, and political marginalization. It prevents them from reaching their full potential by denying them access to equal opportunities and resources. This further condemns them to a life of want, prejudice, and anguish. This has led to a large portion of the population becoming uneducated and economically dependent.
Social, economic, and cultural factors impede rural women, leaving them impoverished because of limited opportunities to advance their careers or advance their personal lives. Microfinance has been recognized in the past as an effective tool for fighting poverty and advancing women’s economic and social standing. Multiple studies have found that when women participate in microfinance, it promotes gender equality.
Several recent studies have looked at how microcredit has influenced household welfare in areas like children’s schooling, mobility, social connections, food security, clothing quality, sanitation, asset creation, income, and savings. On the other hand, Goetz and Gupta (1996) discovered that many wives put their husband’s loan money toward the family business.
Furthermore, Garikipati (2008) argued that women’s empowerment is not bolstered when loan amounts are diverted in this way because there are no joint titles on property and assets. Imai, Arun, and Annim (2010) found that taking out a loan to put toward something that would earn money would have a positive effect on one’s financial situation by decreasing poverty and raising earnings. While many studies have focused on identifying the impact of microfinance on women’s empowerment, the factors influencing economic and social development for women borrowers who invested the loan amount in their own established business/new business and who diverted the loan proceeds to meet the requirement of their husband’s or son’s business have not been investigated. This study therefore focuses on assessing women’s empowerment in the context of both self-managed and family-managed businesses in the Uttar Pradesh region.
The SHG model is similar to a rural economic builder that encourages women to take part in the development process. SHGs not only help reduce poverty among rural Indian women, but also raise awareness among an often-overlooked demographic. Since the 1990s, India has seen a steady rise in the number of SHGs and the number of people who belong to them. From a pilot of 500 SHGs of rural poor two decades ago to 8 million groups up to 2013, the NABARD-run Indian SHG-Bank Linkage programme has grown to become the largest microfinance program in the world.
Since this is the case, it stands to reason that microfinance would eventually bring about economic growth in the area. This is not always the case though. This study aspires to provide a comprehensive analysis of the factors influencing women’s social and economic progress in rural Uttar Pradesh, India, after they enroll in a microfinance program. This is done for the two categories of “own business” and “family business” to illustrate the process. Using statistical analysis, this study aims to shed light on the primary catalysts for women’s empowerment in one of India’s most populous states. Most research in India is limited to the south, where civilization and infrastructure are well-established.
Therefore, this research sheds light on the challenges faced by women in India’s north-central region, where the microfinance program’s initiatives must be modified to achieve its twin goals of reducing poverty and empowering women. The study, which makes use of a quantitative methodology and statistical analysis, sheds light on the factors that influence women’s economic independence in the context of both independently-run businesses and family-run enterprises.