Inductus Foundation

Press Release

Findings of a Research Study on the Impact of MFI Programmes in Bihar: Press Release-23rd February, 2011:

Microfinance is not a panacea to all problems of poverty. However, it is considered as a vital tool to break the vicious circle of poverty that characterized by low income, low savings and low investment. In order to generate higher incomes, savings and more investment, there is need to inject capital in the form of microfinance. The empirical evidence in this study showed that 'microfinance plus' services have positively correlated with the improving in household expenditure, income, assets and employment. Microfinance could have contributed in improving the access to credit for consumption and productive purposes if other attached microfinance plus services made more workable in Bihar. Most (formal) institutions regarded low-income households as “too poor to save”. But microfinance programme nullifies the argument and proved that even vulnerable poor can save if he/she has the accessibility and reward from it. Generally, the life of poor is often hindered by many contingencies or risks. Insuring against these risks makes people to bear the large uncertain losses with certainty of small and regular payments. Thus, the microfinance-plus services of microfinance introduced the micro insurance services to reduce vulnerability (result of risk and uncertainty) of the poor.

The microfinance-plus service of microfinance has tried to bring out the poor (women in particular) from below poverty line and fight against the poverty through deploying the financial and non-financial services. Various skill enhancement trainings and awareness programmes, networking with various institutions, etc, will make the welfare path soften towards poor, which is lacking in Bihar. The microfinance-plus services of microfinance not only help uplifting the poor from income related poverty but also from the knowledge poverty. Hence, easily accessible and affordable “microfinance-plus services” should be provided to the vulnerable poor who are excluded socially and economically for a long period of time in Bihar to make both MFIs and poor women borrowers safe in improving their condition.

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