Impact Study of Self-Help Group Bank Linkage Programme on Beneficiaries in Rural Rajasthan

Abstract

The underprivileged poor while availing loans face two main issues. First, a deposit of collateral is essential for availing loans, and second, formal sources do not provide loans for activities other than income generation. To abbreviate this problem of poor people, microfinance is playing an imperative role through the self-help group bank linkage programme (SHGBLP). Therefore, the objective of this research paper is to examine the impact of SHGBLP on its participants at the household level in terms of income, savings, expenditure and asset creation. For this, 450 households belonging to the treatment and control groups were interviewed. Further, the average treatment model was applied to the treated model through propensity score matching and principal component analysis. The results highlighted that participation in SHGBLP significantly affects the income of the poor participants in comparison to the less poor and medium poor, programme participation also significantly affects the consumption expenditure of the participants in comparison to the non-participants. In spite of that, it also significantly affects the asset creation of the medium-poor participants in comparison to the poor and less-poor participants, while participation does not affect the saving patterns of the participants.