Does Membership in Women's Group Advance Economic Empowerment? A Study based on NFHS Data-Evidence from India

Women's empowerment is crucial for development of any nation which is the reason why women empowerment programs are evaluated, promoted and monitored over time. This is all the more important for Indian case as women generally plays an important role in maintaining good household health and nutrition. This paper uses data from secondary sources i.e. NABARD and NFHS (Round 4 and 5) to measure the impact of access to micro-finance funds on multiple measures of women empowerment. Two variables are created MD1 and MD2 in order to measure Micro-finance access and Micro-finance dispersion respectively. This paper documents women empowerment for the whole of India as well as for all its states and Union Territories. The study finds that Southern and Eastern States lead in both indexes of micro-finance access and dispersion. Also, the women empowerment indicators vary greatly across different states as well as across indicators. An important conclusion of this paper is that micro-finance access credit-linked SHGs in states has a positive and significant impact on all indicators of women empowerment. However, micro-finance dispersion i.e. presence of savings-linked SHGs does not have any impact on any indicator of women empowerment. An implication of these results is that the government should provide the necessary support to the SHGs in terms of training and market-linkage. This is crucial for the sustainability of the SHGs and effectiveness of the program as vehicle for women empowerment given the alarming rise in NPAs in SHG-lending.