Effectiveness of microcredit in employment generation and livelihood transformation of tribal women entrepreneurs: evidence from PMMY

Abstract

Financial support through microcredit facilities has been acclaimed as instrumental in encouraging entrepreneurial activities and empowering individuals, especially women, in the process. Accordingly, Government and policy makers have initiated microcredit programmes to uplift individuals at the ‘bottom of the pyramid’. Pradhan Mantri Mudra Yojana (PMMY), a microcredit programme, is an example of the Indian government’s initiative to promote employment and sustain the livelihood status of the above-mentioned individuals. The present study, thus, investigates the success of this microcredit scheme in creating employment and transforming livelihood status of tribal women entrepreneurs in particular. Ordered logistic regression, Wilcoxon Sign test, Effect Size test has been applied for empirical analysis. The results indicate that loan amount significantly influences employability. Also, the facility improved the livelihood of women as regards to economic, psychological and social empowerment. The study confirms that aid through microcredit has the potential of generating employment and empowering women. Further, it suggests that the government and the banking sector may improve the existing policies and take initiatives to enhance the accessibility of the scheme and create a supporting environment to assist borrowers during the initial stage of the venture through different training programmes.

RÉSUMÉ

Le soutien financier par le biais de mécanismes de microcrédit a été salué comme moyen d’encourager les activités entrepreneuriales et d’autonomiser les individus, en particulier les femmes, dans le processus. En conséquence, le gouvernement et les décideurs politiques ont lancé des programmes de microcrédit afin d’améliorer la situation des personnes se trouvant au « bas de la pyramide ». Pradhan Mantri Mudra Yojana (PMMY), un programme de microcrédit, est un exemple de l’initiative du gouvernement indien visant à promouvoir l’emploi et à maintenir les moyens de subsistance des individus susmentionnés. De ce fait, la présente étude examine le succès de ce programme de microcrédit en termes de création d’emplois et de transformation des moyens de subsistance des femmes entrepreneurs en particulier. Une régression logistique ordinale, le test des rangs signés de Wilcoxon et un test de taille d’effet ont été appliqués pour l’analyse empirique. Les résultats indiquent que le montant du prêt influence l’employabilité de manière significative. En outre, le mécanisme améliore les moyens de subsistance des femmes en termes d’autonomisation économique, psychologique et sociale. L’étude confirme que l’aide par le biais du microcrédit a le potentiel de générer des emplois et d’autonomiser les femmes. En outre, elle suggère que le gouvernement et le secteur bancaire peuvent améliorer les politiques existantes et prendre des initiatives visant à renforcer l’accessibilité du programme et créer un environnement favorable pour aider les emprunteurs pendant la phase initiale de l’entreprise par le biais de différents programmes de formation.

Keywords:

• Women entrepreneur
• employability
• Pradhan Mantri Mudra Yojana
• empowerment

Mots-clés::

• Femmes entrepreneurs
• employabilité
• Pradan Mantri Mudra Yojana
• autonomisation

Acknowledgments

The authors acknowledge the financial support of ICSSR and MHRD (IMPRESS Scheme) for conducting the research.

Disclosure statement

No potential conflict of interest was reported by the authors.

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Additional information

Notes on contributors

Tarak Nath Sahu

Dr. Tarak Nath Sahu is an Assistant Professor in the Department of Commerce, Vidyasagar University, Midnapore, West Bengal, India. He has over 13 years of postgraduate teaching and research experience. Dr. Sahu, a gold medalist at both graduate and post-graduate level, has authored three books published by Palgrave Macmillan, New York and Emerald Publishing Limited, UK and co-edited five books. He has already completed a research project sponsored by UGC. Dr. Sahu has published more than sixty research articles in different refereed and indexed journals published by different reputed publishers, including Springer, Taylor & Francis, Wiley-Blackwell, Emerald, SAGE, MacMillan, Inderscience etc.

Varuna Agarwala

Varuna Agarwala is currently working as a Research Assistant, ICSSR-IMPRESS Research Project, Department of Commerce, Vidyasagar University, Midnapore, West Bengal, India. She is a gold medallist at Post Graduate level and has presented papers at several international conferences and seminars. She has authored various articles on topics related to finance.

Sudarshan Maity

CMA (Dr.) Sudarshan Maity is presently Deputy Director in the Directorate of Examination, The Institute of Cost Accountants of India, Kolkata, West Bengal, India. He has over 18 years of administrative experience in various industries. He is a postgraduate from Calcutta University and all India rank holder in the Final Examination of The Institute of Cost Accountants of India. His research area is in Finance, Social Science, etc. and he has published more than thirty five research articles in different journals published by different reputed publishers, including Wiley-Blackwell, Emerald, Inderscience etc. His research work has also been shared in more than thirty national and international conferences.