Project Overview
When United Nations declared 2005 as the year of Micro-credit, it became clear to the rest of the world that the model of micro-credit is viable and essential in eradicating poverty at the grass roots level. Micro-credit provisions micro (small) loans to individuals who need it to improve their living conditions, but who are unable to find a loan through the channels of a mainstream commercial bank.
The premise of the micro-credit scheme is humanity itself. Every individual has an enterprising capacity – a spirit within them that strives to improve their lives. But more often that not, the surroundings, such as the systematic unavailability of getting loans from commercial banks or the exorbitant cost of acquiring such a loan, dampen that human capacity. What the world must not forget is that poverty stricken communities and individuals are also productive and enterprising, and given the right tools they are capable of improving their and their families’ lives.
New Life, through its community owned association structures known as Affinity Association of Self Help Groups (AASHG), plays an active role in promoting and providing micro-credit. The AASHGs are community based groups comprised of women leaders that manage the credit needs of the individuals within that community. Community based affinity associations are one of the most effective way in channeling the loans to the borrowers. The AASHGs are responsible for gathering and validating the credit needs of the borrowers, and then New Life through its partner organization seeks to fulfill these Credit needs. You can read more about our principles and policies here (New Life URL for the MicroCredit-Policy page).
New Life works with “Rang De”, an organization that connects borrowers with lenders. Lenders are individuals like you, from all walks of life, who don the role of a social investor. We encourage you to read more about “Rang De” here: (link: http://rangde.org/rangde.htm).
Policy
New Life has a Credit Team dedicated to the micro-credit project. The following principles are strictly adhered to while practicing micro-credit:
(a) Periodic statements: The Credit Team shall distribute comprehensive member statements disclosing loan and savings balances, rates, fees and finance charges on at least a quarterly basis.
(b) Honest and non-deceptive promotions: All marketing and advertising strategies while practicing microfinance shall contain honest and relevant information to help members make informed decisions.
(c) Fair credit practices: The Credit Team shall provide members with accurate, comparable, transparent and complete information about the total cost of loans, including fees and commissions as required under applicable law of the country.(d) Dignified collection practices: The Credit Team may exercise persistent collection practices as needed, but shall not harass nor physically or verbally abuse members in the process.
(e) Members' consent to share information: The Credit Team shall provide members with the option of not having their personal information shared with third parties for the purpose of selling members products or services.
(f) Dispute resolution services: The Credit Team shall provide members with options to settle disputes with the credit union to augment options offered through the legal system.
(g) Provide education about thrift and wise use of credit: The Credit Team shall educate and provide members with tools describing how to accumulate wealth and use credit wisely.
(h) Fair and forthright conversions: Credit Team seeking to demutualize must have at least 30% of members directly vote on the issue, with 75% voting in favor of demutualization.
Please do not hesitate to contact us (link: http://www.newlifemfi.org/contact.php) if you have any questions.
Invest Now
Remember, as small as a Rupees 1000 investment can make a difference in someone’s life. Social investors receive the sum invested with an interest of 3.5% per annum at the end of the loan tenure. Your social investment will help you connect with borrowers of AASHGs. Making a social investment on AASHGs through “Rang De” (link: http://rangde.org) is simple and secure. You can make social investments using a payment option that you find convenient. “Rang De” now accept payments via credit or debit cards, online transfers and cheques. You can indicate your payment option on “Rang De” Smart Pay page and you will be guided through the transaction depending on your choice of payment. Click here (link: http://rangde.org/whyinvest.htm) to invest in “Rang De”.
Please do not hesitate to contact us (link: http://www.newlifemfi.org/contact.php) if you have any questions.
Success Stories
Manimaran
Manimaran, a flower merchant, has good knowledge on the flowers business and has the marketing skills to sell it. His house is in proximity to the local temple, and Manimaran has a good market there. He sells jasmine, rose and other flowers which he buys from the neighbor villages. In addition, Manimaran has previous experience in getting loans and he has successfully re-paid all the loans that he has taken. Manimaran hence plays the role of a middleman; ensuring flowers from the gardens of growers reach the marketplace. He sources the blooms directly from the growers and supplies it to the local market. To meet the demand, Manimaran needed loan to increase his flower sources.
Manimaran received a micro-credit loan, and he has taken full advantage of it. He has tied up deals with two more flower growers, thanks to the contacts built up over a period of time. “My earnings have improved,” says the optimistic Maniraman, “but I need to do even better to improve my family’s condition”.
Maniraman, has decided that saving for a rainy day must start now. and has started a recurring deposit at the bank. . No crisis is big enough to make him miss the monthly Rs.300 recurring deposit at the bank.
Anbalagan
Anbalagan is into the rice vending business after his father. He lives with his mother, who is a coolie and earns daily wages. Anbalagan buys rice from the whole sale market and sells it at the retail market directly to the customers. Anbalagan needed loan to expand his business and reach out to more customers since he sells only rice and nothing else.
Anbalagan supplies rice to customers that need very large quantities, during wedding celebrations and other social events. The loan has helped him to make a large capital investment. He is uncompromising on the quality of rice and strives to maintain a reasonable price. This has helped him to survive in this highly competitive market.
Anbalagan believes that his mother’s unconditional support is partly the reason for his success. “Apart from that, it is my hard work and the ‘I can’ attitude that has helped me.” he says. He eventually wants to set up a wholesale shop for premium rice.
Kumaravel
Kumaravel hails from Tiruchirapalli and deals in banana leaves (the eco-friendly disposable plate/wrap). Kumaravel is doing the business of banana leaves for more than 5 years and has a good knowledge on this particular business. Trichirappalli is biologically very well suited to grow banana and it has huge market for banana leaves. Kumaravel procures the leaves from his place and supplies to different function through out the city.
Kumaravel needed a loan to boost his banana leaves supply. With the help of the loan, he has already given an advance to the owner of a four acre banana plantation, for its leaves. He has also utilized his loan to advance payments to the owners of three more banana plantations. This has helped him to substantially boost his income and earn the respect of his associates.
Although this business is fraught with risks (especially in the rainy season), Kumaravel is keen to broaden his reach to other areas of Trichy.
Swami Nathan
Swami Nathan was a coolie for daily wages. He is now planning to have cycle shop and hire cycles and do repairing and servicing of cycles. Swami Nathan has skilled himself in repairing cycles since he worked in a cycle shop for few months and he is now interested to have his own cycle shop in his village. He is confident that he will make more money to take care of his family. Swami Nathan needed a loan to buy new cycles for his shop.
Swami Nathan hails from a remote village that has no public transport facilities. Walking is the only way to reach the town, unless one is fortunate enough to own a bicycle. This gave Swami Nathan the idea to buy two bicycles and rent them out. He knew that he had made the right decision.
He wasted no time in securing a loan and purchased five additional bicycles. Now, you can spot these bicycles all over the village or in the town-anywhere but parked at his house. He earns an additional Rs.75 per day and it has also helped him redo his backyard.
“Mine is the only such shop in the village.” says Saminathan proudly, “What an idea-huh?” We couldn’t agree with him more.
Raja
Raja has been involved in selling of vegetables for the past 3 years. He gets the vegetables directly from the farmers, and then sell it to the direct market for the consumers. There is always a demand for vegetables. Now he is planning to expand his business with more farmers. He has already taken loans and re-paid it successfully.
Raja completed his twelfth grade and took charge of the tiny general store run by his parents. He knew that he had to work smarter, and quickly identified the problem areas. He acquired a loan and used it to install a pay phone and get additional supplies for the shop. He was also careful to keep a part of it as working capital, since most of his patrons needed credit facilities.
Today Raja’s parents are proud of their son. The shop is doing rather well and the pay phone brings in additional revenue. “I get more respect from my friends and relatives now.” says a beaming Raja, “This is our only source of income, and I am able to take care of my parents.” Raja is all set to expand further, and plans to include vegetables and some other pricey articles in his store .
Tuesday, May 26, 2009
WOMEN EMPOWERMENT
WOMEN EMPOWERMENT THROUGH LIVELIHOOD IMPROVEMENT PROGRAM
New Life has been involved in the Livelihood Improvement Program since 1994 through the formation of Self-Help Groups among poor women. A unique poverty tool was utilized to screen the aspiring members into the program. At the end of March 2008, almost 19500 economically challenged women had benefited from the program. They were given trainings on how to take up small enterprises aimed at generating income for their families. Later on, through the program, they were assisted to arrange a loan from financial institutions. Presently, each of them is involved in a small business that alleviates poverty in their family. Their income generation activities are being monitored periodically by the livelihood improvement committee of the organization.
The poor women from the BPL category (irrespective of caste, creed and religion) are the target segment for the various activities being carried out by New Life. The number of members that had benefited from the various programs of the organization as of September 2008 had summed up to 28109 women. These empowered women are residents of the Trichy, Perambalur, Tiruvarur, Pudukkotai, Nagappattinam and Cuddalore districts of Tamilnadu.
New Life aims to reach two million women by the year 2010. The organization is targetting to empower women from Tamilnadu, Andhrapradesh and Karnataka using the tested tools developed over the past 12 years. This article is created by Ellen.
New Life has been involved in the Livelihood Improvement Program since 1994 through the formation of Self-Help Groups among poor women. A unique poverty tool was utilized to screen the aspiring members into the program. At the end of March 2008, almost 19500 economically challenged women had benefited from the program. They were given trainings on how to take up small enterprises aimed at generating income for their families. Later on, through the program, they were assisted to arrange a loan from financial institutions. Presently, each of them is involved in a small business that alleviates poverty in their family. Their income generation activities are being monitored periodically by the livelihood improvement committee of the organization.
The poor women from the BPL category (irrespective of caste, creed and religion) are the target segment for the various activities being carried out by New Life. The number of members that had benefited from the various programs of the organization as of September 2008 had summed up to 28109 women. These empowered women are residents of the Trichy, Perambalur, Tiruvarur, Pudukkotai, Nagappattinam and Cuddalore districts of Tamilnadu.
New Life aims to reach two million women by the year 2010. The organization is targetting to empower women from Tamilnadu, Andhrapradesh and Karnataka using the tested tools developed over the past 12 years. This article is created by Ellen.
Swine Flu
Overview of Swine Flu!
The current influenza pandemic is named swine flu. It is caused by Influenza A virus, subtype H1N1, which usually affects pigs/hogs. Affected persons are not debilitated enough to be confined, enabling the virus to spread between continents, affecting susceptible individuals. Most people suffer to the mildest degree, resulting in the development of antibodies and no serious illness.
This virus is a strain of the 1918 flu pandemic, at which time, the virus is suspected to have travelled from humans to pigs. In 1976, 1988 and 2007, ‘flu epidemics have occurred. Pigs act as reservoirs of infection, humans being infected due to direct exposure. The current virus appears to have travelled from Mexico, to a pig farm in Alberta, Canada, detected in humans in April 2009.
Pigs are unusual in that, bird, human and other flu infections can co- exist in the same animal, resulting in dangerous exchange of genes, developing new virulent strains. Humans have no immunity to the present virus. It spreads from human to human through droplet infection, from coughing and sneezing. Deaths occur in infants, the elderly and chronically ill patients.
Because these symptoms are non specific, a suspicion of swine flu requires not only symptoms, but also a history of exposure. The diagnosis is considered in patients with acute febrile respiratory illness who have either been in contact with persons with confirmed swine flu, or who were in the geographical locations that have reported swine flu. A diagnosis requires laboratory testing of a respiratory sample (a simple nose and throat swab).
Prevention and control are along two parameters:
1. Swine management: Facility management includes using disinfectants to control virus in the environment. The virus is unlikely to survive outside the living cell for more than two weeks, except in cold (but above freezing) conditions and it is readily inactivated by disinfectants.
2. Human Control: Covering the nose and mouth while sneezing, coughing and discarding the tissue in the trash. Frequent washing of hands as well as the use of alcohol containing hand sanitizers Avoid touching the eyes, mouth or nose. If sick, confine yourself to the home, avoid spreading the contagion.
Vaccines should be available by June 2009 against the present strain. Antiviral drugs can make the disease milder, the patient feel better. Started within 2 days after symptoms appear these agents should augment, fluid management, rest and other palliative care . This article is created by suman.
The current influenza pandemic is named swine flu. It is caused by Influenza A virus, subtype H1N1, which usually affects pigs/hogs. Affected persons are not debilitated enough to be confined, enabling the virus to spread between continents, affecting susceptible individuals. Most people suffer to the mildest degree, resulting in the development of antibodies and no serious illness.
This virus is a strain of the 1918 flu pandemic, at which time, the virus is suspected to have travelled from humans to pigs. In 1976, 1988 and 2007, ‘flu epidemics have occurred. Pigs act as reservoirs of infection, humans being infected due to direct exposure. The current virus appears to have travelled from Mexico, to a pig farm in Alberta, Canada, detected in humans in April 2009.
Pigs are unusual in that, bird, human and other flu infections can co- exist in the same animal, resulting in dangerous exchange of genes, developing new virulent strains. Humans have no immunity to the present virus. It spreads from human to human through droplet infection, from coughing and sneezing. Deaths occur in infants, the elderly and chronically ill patients.
Because these symptoms are non specific, a suspicion of swine flu requires not only symptoms, but also a history of exposure. The diagnosis is considered in patients with acute febrile respiratory illness who have either been in contact with persons with confirmed swine flu, or who were in the geographical locations that have reported swine flu. A diagnosis requires laboratory testing of a respiratory sample (a simple nose and throat swab).
Prevention and control are along two parameters:
1. Swine management: Facility management includes using disinfectants to control virus in the environment. The virus is unlikely to survive outside the living cell for more than two weeks, except in cold (but above freezing) conditions and it is readily inactivated by disinfectants.
2. Human Control: Covering the nose and mouth while sneezing, coughing and discarding the tissue in the trash. Frequent washing of hands as well as the use of alcohol containing hand sanitizers Avoid touching the eyes, mouth or nose. If sick, confine yourself to the home, avoid spreading the contagion.
Vaccines should be available by June 2009 against the present strain. Antiviral drugs can make the disease milder, the patient feel better. Started within 2 days after symptoms appear these agents should augment, fluid management, rest and other palliative care . This article is created by suman.
Woman Prison
Women In Prison:
An Overview and How New Life Can Help
The issue of women in prison is a pressing concern for socio-economic policymakers and human rights watchers. The amount of women incarcerated around the world has increased and India is no exception. As a non-governmental organization committed to bettering the socio-economic status of women and children in India, particularly in Tamil Nadu, New Life is actively involved in the rights of women inmates.
Men and women face different requirements when incarcerated. One of the main differences involves children. Many imprisoned women are either the sole or main caregiver of children in the household. The social ramifications of the mother in prison are serious as it contradicts the traditional role of mother and caretaker for the family. There is no standard policy for the treatment of children in prisons while their parent is incarcerated. The children are not delinquent themselves, but are in the prison solely because their mother is an inmate. State laws determine the length of time the children can remain in the facility with their parent. Children are allowed to stay in the prison from between the ages of two to six years depending on the laws of the state. In Tamil Nadu, a child is allowed to remain in the prison until six years of age. Proper socialization is a main concern for children of inmates. Children are adversely affected by the lack of exposure to the outside world and education.
Prisons treat inmates according to their security classification. This allows for decisions to be made regarding visitation rights, work programs, leave from prison, and other policies. While this may appear to keep the situation orderly, the security classifications as they apply to women can be discriminatory. Three important ways that security classifications discriminate against women are: not classifying inmates so that large groups are accommodated together; housing inmates at a higher classification than their actual level; and, basing a risk assessment of the inmate on their socio-economic status.
Women inmates are affected by their socio-economic status. Poverty plays a key role in the offences and imprisonment of women. It should be stated that there are instances of women committing violent crime. However, with regard to petty offences, many women are unable to pay the fines or post bail and end up in prison.
New Life has worked on women prisoners’ issues since 1997. Key issues for the organization include the over-incarceration of women, children of imprisoned women, accommodation issues, education and work programs, women prisoners with a history of abuse, indigenous/minority women prisoners. Through its programs, New Life is working to foster an awareness of legal and human rights for women prisoners. Counselling programs have been developed with other organizations to educate women on their legal and human rights. Other initiatives are literacy and education programs and supplying hygiene kits to senior inmates at Trichy Central Prison.
While the United Nations has established human rights legislation regarding the treatment of prisoners, special attention must be given to the unique needs of women. New Life takes an active role in improving the conditions of women and children. This article is created by Lisa.
An Overview and How New Life Can Help
The issue of women in prison is a pressing concern for socio-economic policymakers and human rights watchers. The amount of women incarcerated around the world has increased and India is no exception. As a non-governmental organization committed to bettering the socio-economic status of women and children in India, particularly in Tamil Nadu, New Life is actively involved in the rights of women inmates.
Men and women face different requirements when incarcerated. One of the main differences involves children. Many imprisoned women are either the sole or main caregiver of children in the household. The social ramifications of the mother in prison are serious as it contradicts the traditional role of mother and caretaker for the family. There is no standard policy for the treatment of children in prisons while their parent is incarcerated. The children are not delinquent themselves, but are in the prison solely because their mother is an inmate. State laws determine the length of time the children can remain in the facility with their parent. Children are allowed to stay in the prison from between the ages of two to six years depending on the laws of the state. In Tamil Nadu, a child is allowed to remain in the prison until six years of age. Proper socialization is a main concern for children of inmates. Children are adversely affected by the lack of exposure to the outside world and education.
Prisons treat inmates according to their security classification. This allows for decisions to be made regarding visitation rights, work programs, leave from prison, and other policies. While this may appear to keep the situation orderly, the security classifications as they apply to women can be discriminatory. Three important ways that security classifications discriminate against women are: not classifying inmates so that large groups are accommodated together; housing inmates at a higher classification than their actual level; and, basing a risk assessment of the inmate on their socio-economic status.
Women inmates are affected by their socio-economic status. Poverty plays a key role in the offences and imprisonment of women. It should be stated that there are instances of women committing violent crime. However, with regard to petty offences, many women are unable to pay the fines or post bail and end up in prison.
New Life has worked on women prisoners’ issues since 1997. Key issues for the organization include the over-incarceration of women, children of imprisoned women, accommodation issues, education and work programs, women prisoners with a history of abuse, indigenous/minority women prisoners. Through its programs, New Life is working to foster an awareness of legal and human rights for women prisoners. Counselling programs have been developed with other organizations to educate women on their legal and human rights. Other initiatives are literacy and education programs and supplying hygiene kits to senior inmates at Trichy Central Prison.
While the United Nations has established human rights legislation regarding the treatment of prisoners, special attention must be given to the unique needs of women. New Life takes an active role in improving the conditions of women and children. This article is created by Lisa.
Thursday, May 14, 2009
Microfinance
Research Paper for IDLO
The Impact of Microfinance on Firm Productivity
~Does Gender Matter? Evidence from India~
Advisor: Jami Hubbard,Manager (Microfinance and Legal Counsel) IDLO,Rome (Italy)
Author: Asami Takeda
FASID/GRIPS Joint Graduate Program on International Development Studies
National Graduate Institute of Policy Studies
7-22-1 Roppongi, Minato-ku, Tokyo, Japan 106-8677
Abstract
This study aims to identify the determinants of firm productivity using 2005 and 2008 firm level data in India. Performance gaps between enterprises owned by female entrepreneurs and male entrepreneurs are also estimated. The study has found that female entrepreneurs operate their businesses more profitable relative to male counterparts; being female entrepreneurs increase both sales and profit growth rate; there is inverted U-shape pattern between profit growth and the educational level of entrepreneurs; higher share of microfinance may lead to higher profit growth. The important implication is that it is proved that empowering women through microfinance is an effective way to increase firm productivity and eventually, it will lead to poverty alleviation. However, microfinance itself is not enough to achieve sustainable growth of micro enterprises. Comprehensive approach including trainings for entrepreneurs, better labor regulations to protect workers employed at informal sectors and so on is required.
Key words: Microfinance, female entrepreneurs, informal sector, firm productivity, India
1. Introduction
In recent years, governmental and non governmental organizations in developing countries have introduced microfinance programs offering financial services to low income households especially targeting women. In 2007, more than 100 million of the world’s poorest families received microfinance and women made up 80 percent of the clients. The growth in the number of very poor women reached has gone from 10.3 million at the end of 1999 to 88.7 million at the end of 2007 (Microcredit Summit Campaign 2009). This is 7.6 times increase in the number of poorest women. The increase represents additional 78 million poorest women receiving microfinance in the last eight years.
Access to credit has received greater attention in the context of poverty reduction and women’s empowerment objectives. The Millennium Development Goals (MDGs) were adopted by world leaders at the United Nations Millennium Summit in 2000. They set measurable and time bound goals, which range from combating poverty, promoting gender equity and empowering women. With the aim to meet MDGs, there has been an increasing expectation on the impact of microfinance programs on women empowerment.
Then, I would like to raise a question, “Why most microfinance borrowers are women?” This is because formal sector commercial banks tend to favor men, mainly because men run the larger business that commercial banks favor. In addition, men tend to control the assets that bank seeks as collateral. Thus, traditionally women have been disadvantaged in access to credit and other financial services despite the fact that nearly 70% of the world’s poor are women.
Therefore, increase in the number of poorest women receiving microfinance leads to good effect on poverty reduction. It may deliver stronger development impacts. Blumberg (1989) finds that women tend to be more concerned about children’s health and education than their husbands. Children’s welfare improves as women’s earning power increases. It suggests that lending to women yields greater social and economic impacts.
Microfinance enables women not only to increase the bargaining power within households, but also enables them to undertake income generating activities. It is estimated that women-owned businesses account for over one-third of all firms, and they are the majority of businesses in the informal sectors in developing countries. They play a major role in creating jobs and generating income for low-income people. This means that expanding microfinance services for women may be the key to alleviate poverty and attain sustainable economic growth in developing countries.
Then, I would like to raise one more basic and direct question; are microfinance really helpful for women who are supposed to be the poorest of the poor? Increasing women’s access to microfinance really enables them to undertake income generating activities? Are there any differences in the impact of microfinance on firm productivity based on the gender of the entrepreneurs? Targeting women is efficient or not?
So far, there is very little data and quantitative research that rigorously examine the impact of microfinance especially by gender. However, fortunately, I could obtain the data from New Life, a NGO based in India. Using the data, the objective of this study is to identify the determinants of firm productivity and verify whether microfinance is really helpful especially for female entrepreneurs in India.
This paper is organized as follows. Section 2 presents Indian economy and microfinance perspective in India. Section 3 describes brief overview of the New Life, a NGO based in India. In addition, the data description and methodology to analyze the impact of the microfinance will be explained. In section 4, the results of the data analysis will be presented. Finally, Section 5 concludes this paper and enumerates the policy implications of this study.
2. Microfinance in India
2-1. Indian Economy
India’s GDP was 1,171 (US$ billions) in 2007 and its annual growth rate of GDP per capita was 7.7%. In the past two decades, India has been making outstanding and sustained progress. At the time of independence in 1947, India was a low income country with mass poverty. Now, the number of very poor people in India is diminishing and now it stands on the edge of the threshold to become the ranks of the world’s middle-income countries.
Since its independence, India reduced the number of absolute poverty by more than half, but the issue of poverty is still prevalent concern. It is estimated that 300 million people out of total population, 1 billion are living below the poverty line. If the poverty line is set from 1 dollar a day to 2 dollar, the number of people living below the poverty line will be increased to 500 million, which is surprisingly half of total population of India. Thus, it is quite essential for Indian governments to develop policies to balance between economic growth and poverty reduction.
Inequality between urban and rural areas is one of the important features of poverty in India. Figure 1 represents poverty situation in India from 1977. This inequality is due to uneven division of natural resources. Poor natural resource endowments and poor access to natural resources is one of the most important causes of poverty. It is estimated that nearly two-thirds of poor people in India are living in rural areas such as Bihar, Orissa, Uttar Pradesh, Madhya Pradesh, and Maharashtra states. It is also said that India’s richest states have incomes that are five times higher than those of the poorest states.
The reason that poverty concentrates on rural area is that rural Indians primarily depend on agriculture income, which is highly dependent on natural condition such as precipitation amount. Inadequate rain and improper irrigation facilities can obviously cause low and sometimes no production of crops. To cope with this, it is better to diversify the risks. It will be essential for India to facilitate non-farm entrepreneurship to get the rural economy moving. Encouraging policies that promote competition in agricultural marketing will also ensure that farmers receive better prices.
On the contrary, poverty prevails in urban area also. Increase in the populations is the main reason for urban poverty. This is due to migration of the rural families from villages to cities. This migration is mainly caused by poor employment opportunities in villages. This situation is exacerbated the fact that there are few job opportunities in urban areas, too.
To combat this situation, creating jobs with good wages in both urban and rural areas is essential. In this context, small enterprises are critical for the economy and social development of emerging markets. They play an important role in creating jobs and generating incomes for low-income people. For example, in Africa, small enterprise and informal sector provide more than 80 percent of jobs today. Also in India, most manufacturing jobs are in the informal sector and they employ 40 percent of the country’s worker. This is disproportionately large compared to other countries in Asia; for example, in Korea it’s only 4 percent. To expand job opportunities in India, the governments should design better labor regulations to attract more labor intensive investment. It also critical to develop strategies to foster informal sector jobs characterized by low productivity and wage into formal sector so that workers can earn higher wage and to be protected by labor laws. In addition, access to financial services for small enterprises remains severely constrained, promotion of efficient, sufficient and widely accessible financial services for them is a key to achieve pro-poor and poverty reduction goals.
2-2. Overview of Microfinance in India
India is one of the largest emerging markets in microfinance in the world. For more than two decades, microfinance initiatives have supported low income Indian households with access to financial services.
Its history started in the early 1980s, with forming informal Self Help Groups (SHGs). Based on the concept of “self-help”, women have formed small groups of ten to twenty and operate a savings-fast business model. The member’s savings are used to fund loans.
Since then, the microfinance sector has grown significantly in the past decades. In the early 1990s, the SHG model was initiated by the National Bank for Agriculture and Rural Development (NABARD) through the SHG-Bank Linkage Program, which links informal women’s groups to formal banks. This concept held great appeal for non-government organizations (NGOs) working with the poor, prompting many of them to collaborate NABARD in the program. Today the SHG model has the largest outreach to microfinance clients in the world.
On the contrary, Micro Finance Institutions (MFIs), largely of non-profit origins, emerged in the late 1990s and their growth is remarkable. Figure2 shows growth trend of MFIs in India from 2003. Today there are over 1,000 Indian MFIs and the number of borrowers has reached nearly 4.5 million. MFIs have emerged as strategic partners to individuals and entities interested in reaching out to India’s low income clients.
3. New Life
3-1. Overview of the organization
“New Life”, one of the promising NGOs in India, established in 1993 with the help of philanthropists from various fields such as agriculture, engineering, medical and so on. Their mission is to bring to mainstream the women and their children belonging to weaker sections who are far behind their counterparts in socio-economic status. Under this mission, New Life is undertaking wide range of projects such as crèche program for the children of women prisoners, rehabilitation of prisoners, child labor schools, livelihood improvement program for women, health program, skill training for the women members and the members in prison, adult literacy program, and micro insurance and so on.
One of their core projects is empowering poor women through microfinance. New Life started this service from 1995. As of today, the number of the clients has reached 23,680 since the service has been started. Women constitute 97.5% of the entire members and the repayment rates are surprisingly 100%. This can be achieved thorough education thorough credit discipline, regular follow-up by the staffs, selection method of borrowers and finally, peer pressure among the group members. New Life requires members to form groups. As the earlier member in the group repay, the other member gets the loan. Thus, peer pressure is built in the system. In addition, to lower the cost of borrowing, New Life provides marketing linkage thorough online microfinance platform called “rang de” where the social investors are encouraged to help the women to improve the quality of produce they make, registration of their units, licensing formalities, and marketing tie-ups suggested by investors.
3-2. Description of Study Site and Data
The data used in this research were provided by the New Life. The first survey was conducted in 2005 and the second one was in 2008. 30 female entrepreneurs and 20 male entrepreneurs were selected through sampling from all the geographic area where New Life works, which is Trichirappalli District. As Figure 3 shows, Trichirappalli District is located along the Kaveri River in Tamil Nadu State, one of the largest states in India. The survey area covers 11 rural villages in this district. Almost all the selected male entrepreneurs live in Srirangam village except one. This is simply because the data of male entrepreneurs were provided by a branch office near Srirangam.
In Tami Nadu State, there were about 62.41 million people, which are corresponding to 6% of total population in India according to 2001 national census. About 56% of the population lives in rural area and the city’s population is predominantly Hindu and there are sizable Christian and Muslim populations.
Tami Nadu has achieved significant development success over the last 15 years. It is one of the India’s most industrialized states with economic growth rates which are above the national average. The state’s performance in social issues such as literacy rate (male literacy rate is 94.17% and female literacy rate is 88.73%, those are higher than that of average rate, 66%), life expectancy, gender equality, female mortality rate, and access to safe drinking water, are impressive.
Despite these achievements, the states have over 12 million people still living below the poverty line, the majority in rural areas. In rural village economy such as the survey area, agriculture is major income source of people. On average, people get employment in agriculture sector for 250 days a year. Rural poverty is concentrated among landless agriculture workers and small farmers, who constitute 46% of the rural workforce. They are suffering from vulnerability of income variation since agriculture depends on natural conditions such as precipitation amount. It is also said that women headed households in rural areas are worst affected by poverty.
The government of Tami Nadu focused on reducing poverty among women, children and vulnerable people through empowerment and employment. The state spends 30% of its budget on social welfare and rural development programs. One such successful program is Mahalir Thuttam (A program for women) implemented in 1992. Its aim is to empower the poor women thorough forming community thorough Self Help Groups and by providing access to credit and other linkages. As a result of this program, a saving of Rs.8100 million has been mobilized by the members and credit linkage of Rs.14290 has been provided. In addition to the mobilization of the money, this program has been successful in empowering women socially, making them aware of the government scheme and so on. However, the success achieved in social empowerment has not translated in economic empowerment. One of the reasons is that the program emphasized on credit activities too much. To provide credit is important to reduce poverty, however, how to achieve sustainable livelihood improvement should be considered at the same time. For example, fostering micro enterprises to generate income activities should have been emphasized more.
In such circumstance, the activities of New Life are important. New Life is implementing Livelihood Improvement Program from 1994 by forming Self Help Groups among the poor women and they are trained to take up small enterprises aiming at generating incomes for their families. The women members are engaged in artisan works, handicrafts, service sector, small business, vending, and self employment initiatives and their activities are monitored periodically by the Livelihood Improvement Committee of the organization. The activities of New Life have social significance and it is hoped that New Life take active role in empowering women more than ever.
3-3. Characteristics of Sample Enterprises
Table 1 summarizes the characteristics of sample enterprises based on gender of the entrepreneurs; the mean values of firm productivity, years of schooling of entrepreneurs, and the number of employees and so on. They are all unregistered micro and small enterprises with less than 10 workers except two; female entrepreneurs who engaged in brick works and banana production have 20 and 12 workers respectively. They all started their business using New Life’s microfinance service except one male entrepreneur. All of their businesses are categorized as service sectors such as flower sales, photo studio, grocery shops, tailor shop, laundry shop, brick work, and hotel and so on except one. Only one female entrepreneur started banana production business, categorized as agriculture sector. Then, why most of the clients using microfinance have started service businesses not agriculture or manufacturing services? There are mainly two reasons. One is that they were already agriculture workers and they rank them as side businesses. Second reason is that service sectors require less initial investment compared to manufacturing sector in general, so it is easier to start their businesses.
According to NationMaster, the average years of schooling of adults in India are 5.5 years. Educational level of New Life clients is higher than this; female entrepreneurs 7.9 years and male entrepreneurs 9.9 years. On average, male entrepreneurs received higher education by two years compared to that of female. Another interesting feature is that age of female entrepreneurs is higher and they operate their businesses longer compared with that of male entrepreneurs on average.
Regarding the annual loan size, female entrepreneurs borrowed Rs 27,023 in 2008 and this amount was larger than that of male counterparts as well as the amount of microfinance. This is because female entrepreneurs rely on microfinance as business loan but they diversify their credit sources and they also used banking services. On the contrary, male entrepreneurs rely on microfinance as major source of their business loan and they did not use banking services except one entrepreneur. This is due to lack of credit discipline; most male entrepreneurs had bad debts in their early loans with banks. In addition, the bank loans are not easily accessible like microfinance because of the following reasons. First, bank loans are mostly available only for a team loan and when the loan is outstanding, a successive loan is usually not allowed. Second, the loan limit fixed by banks is mostly underfinanced. Third, the stipulation such as margin (contribution from borrowers) and collateral security requirement is difficult to comply with. Finally, banking working hours is not suitable for agricultural wage earners since they will lose their daily wage income. In addition, bureaucratic approach and unfriendly attitude of officials of banking sector also keep people away.
Next, regarding the firm productivity, both female and male entrepreneurs achieved significant growth rates in sales and profit from 2005 to 2008. Especially, female-owned business showed remarkable growth in profit, which is more than six times higher than that of 2005 although they hold less amount of the asset compared to that of male entrepreneurs.
In the next section, I would like to assess the determinants of the firm productivity; sales and profit growth from 2005 to 2008 using the ordinary least squares (OLS) regression model.
3-4. Methodology
In introduction part, I raised several questions; does microfinance really helpful for women? Are there any differences in the impact of microfinance on firm productivity based on the gender of the entrepreneurs? To answer these questions, the determinants of the firm productivity have to be analyzed quantitatively. To do this, the OLS regression model is employed. I set two dependent variables; sales and profit growth. The econometric model is expressed as follows respectively;
where the dependent variable, SalesGrowthi is the sales growth rate from 2005 to 2008. The independent variables are defined as follows:
DummySex =1 if gender of the entrepreneurs is female, =0 if otherwise,
Age = the age of the entrepreneurs,
Agesq = the square value of the age of the entrepreneurs,
Edu = the years of schooling of the entrepreneurs,
Edusq = the square value of the years of schooling of the entrepreneurs,
Firmage = the age of the firms,
Asset08 = the value of the firm’s asset in 2008 (Rs),
MFshare = the share of microfinance out of total loan,
Dummylocal1 = 1 if the firm(s) located in Srirangam village, =0 if otherwise,
Dummylocal2 = 1 if the firm(s) located in Tolgate village, =0 if otherwise,
Dummylocal3 = 1 if the firm(s) located in Aiamangalam village, =0 if otherwise,
Dummylocal4 = 1 if the firm(s) located in Kajepettai village, =0 if otherwise,
Dummylocal5 = 1 if the firm(s) located in Thandankorai village, =0 if otherwise,
Dummylocal6 = 1 if the firm(s) located in Manjakorai village, =0 if otherwise,
Dummylocal7 = 1 if the firm(s) located in Amoor village, =0 if otherwise,
Dummylocal8 = 1 if the firm(s) located in Gunaseelam village, =0 if otherwise,
Dummylocal9 = 1 if the firm(s) located in Sathyamoorthinagar village, =0 if otherwise,
Dummylocal10 = 1 if the firm(s) located in Kallur village, =0 if otherwise,
Dummylocal11 = 1 if the firm(s) located in Keelavalady village, =0 if otherwise,
ei = the error term, which is normally distributed with zero mean, and αs = regression coefficients. The determinants include the characteristics of entrepreneurs (sex, age and education), the enterprise characteristics (production experience in terms of firm age since establishment, total asset value in 2008), locational dummies and the share of microfinance out of the entire credit sources.
In the second stage, I would like to identify the determinants of the profit growth. The economic model is expressed as follows;
where the dependent variable, ProfitGrowthi is the profit growth rate from 2005 to 2008. The independent variables are defined as same as the first stage. βs equal to regression coefficients.
4. Results of econometric analysis
Table 2 presents the result of estimating the determinants of sales growth from 2005 to 2008. The results suggest that gender of the entrepreneurs is statistically significant at 5 percent level. The positive coefficient of the dummy variable of entrepreneurs’ gender means holding other factors constant, being female entrepreneurs increase the sales growth rate by 7.7 percent. This suggests that enterprises owned by female entrepreneurs grew faster than those owned by male entrepreneurs. In addition, the coefficient of local dummy, Kajepettai village is negative and significant. This should be investigated more.
As for the profit growth (Table 3), again, the gender of entrepreneurs is statistically significant and positive at 1 percent level. This means that being female entrepreneurs increase the profit growth by 22 percent holding other factors constant. This may be attributing to New Life’s activity of training women on entrepreneurship. In addition, a statistically significant positive coefficient of the entrepreneurs’ years of schooling and a statistically significant negative coefficient of the education squared indicate an inverted U-shape pattern between profit growth and the educational level of entrepreneurs. Moreover, the sign of the coefficient of independent variable, the share of microfinance is positive as expected. Even though it is not statistically significant, it may suggest that the higher the share of microfinance out of the entire credit resources, the higher the profit growth of the enterprise. None of the local dummies are significant, indicating there are no specific regional effects.
5. Conclusion
The objective of this study is to identify the determinants of firm productivity in India and verify whether microfinance is really helpful for female entrepreneurs or not. The major findings are as follows. First, the data shows that the enterprises owned by female entrepreneurs achieved significant increase in both sales and profit growth relative to male entrepreneurs. In particular, the average profit growth rate of female entrepreneurs is remarkable. Also, the data shows that annual loan size of female entrepreneurs is larger relative to male entrepreneurs. Female entrepreneurs rely on microfinance as their major credit resources; however, they also used banking services. On the contrary, male entrepreneurs rely much more on microfinance and they did not use banking services. This reveals that most male entrepreneurs had bad debts in their early loans with banks. As next stage, the OLS regression results show that the gender matters to both sales and profit growth; being female entrepreneurs increase both sales and profit growth rates. In addition, the inverted U-shape pattern between profit growth and the educational level of entrepreneurs is proved. Finally, it is not statistically significant, but higher share of microfinance out of the entire credit sources may lead to higher profit growth of the enterprises.
To sum up, targeting women is efficient since female entrepreneurs can operate their business more profitable than male entrepreneurs. In addition, since entrepreneurs who use more microfinance may lead to higher profit growth, it is verified that empowering women through microfinance is an effective way to increase firm productivity and eventually, it will lead to poverty alleviation.
However, microfinance itself is not enough to achieve sustainable growth of their business. At the same time, training programs on technology and management for entrepreneurs should be provided to stimulate their innovations. New Life already implemented Livelihood Improvement Program to train poor women to take up small enterprises aiming at generating incomes for their families, their active role in this field are very much hoped more than ever. Furthermore, the role of the government is also critical. To create more jobs and help micro enterprises to achieve their sustainable growth, the government has to play a role as a facilitator so that workers employed at informal sectors are able to get requisite level of social protection and security to have decent working environment enabling them to express their skills fully and enhancing their competitiveness of their outputs and thereby raising their income and social status. Finally, to assess whether microfinance is working well in the region or not, more empirical research on microfinance effect using the data should be encouraged. Ideally, to major the impact of microfinance more rigorously, the comparison of same characteristics of enterprises with microfinance and without microfinance is needed.
REFERENCES
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Blumberg, Rae. “Entreprenuership, credit, and gender in the informal sector of the Dominican Republic.” In Women in Development: A.I.D.’s Experience, 1973-1985, vol.2, 1989. .
Cheston, Susy and Kuhn, Lisa. “Empowering Women through Microfinance.” UNIFEM, 2002.
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Hayami, Yujiro and Yoshihisa Godo. “Development Economics: From the Poverty to the Wealth of Nations.” Oxford; New York: Oxford University Press, pp.245-246, 2005.
Hulme, David. “Impact assessment methodology for micro finance.” World Development, 1995.
John E. Akoten, Yasuyuki Sawada and Keijiro Otsuka. “The Determinants of Credit Access and Its Impacts on Micro and Small Enterprises: The Case of Garment Producers in Kenya.” The University of Chicago, 2006.
Kimuyu, Peter. “Micro-level institutions & enterprise productivity: insights from Kenya’s small business sector.” World Development, 2001.
Linda Mayoux. “Women’s Empowerment through Sustainable Microfinance: Rethinking Best Practice.” 2005.
Morduch, Jonathan and Armendariz, Beatriz. “The Economics of Microfinance.” Boston: Massachusetts Institute of Technology, 2005.
N.Kavitha and A.Ramachandran. “Overview of Microfinance for Women in India.”
Rahmat Megananda Achmad Maulana. “The Impact of Microfinance to Micro and Small Enterprise’s Performance and the Improvement of Their Business Opportunity.” Padjadjaran University, 2006.
Ranjula Bali Swain. “Does Microfinance Empower Women? Evidence from Self Help Groups in India.” Uppsala University Working Paper No.2007:24, 2007.
Shwetlena Sabarwal and Katherine Terrell. “Does Gender Matter for Firm Performance?” The World Bank Policy Research Working Paper No.4705, 2008.
Stevenson, Lois and St-Onge, Annette. “Support for Growth-oriented Women Entrepreneurs in Kenya.” ILO, 2005.
Susy Cheston. “Just the Facts Ma’am: Gender Stories from Unexpected Sources with Morals and Microfinance.” Opportunity International, 2006.
Microcredit Summit Campaign Report 2009
CELENT. http://www.celent.com/124_466.htm (retrieved in 4/2009).
EconomyWatch. http://www.economywatch.com/indianeconomy/indian-economy-overview.html (retrieved in 4/2009).
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The Impact of Microfinance on Firm Productivity
~Does Gender Matter? Evidence from India~
Advisor: Jami Hubbard,Manager (Microfinance and Legal Counsel) IDLO,Rome (Italy)
Author: Asami Takeda
FASID/GRIPS Joint Graduate Program on International Development Studies
National Graduate Institute of Policy Studies
7-22-1 Roppongi, Minato-ku, Tokyo, Japan 106-8677
Abstract
This study aims to identify the determinants of firm productivity using 2005 and 2008 firm level data in India. Performance gaps between enterprises owned by female entrepreneurs and male entrepreneurs are also estimated. The study has found that female entrepreneurs operate their businesses more profitable relative to male counterparts; being female entrepreneurs increase both sales and profit growth rate; there is inverted U-shape pattern between profit growth and the educational level of entrepreneurs; higher share of microfinance may lead to higher profit growth. The important implication is that it is proved that empowering women through microfinance is an effective way to increase firm productivity and eventually, it will lead to poverty alleviation. However, microfinance itself is not enough to achieve sustainable growth of micro enterprises. Comprehensive approach including trainings for entrepreneurs, better labor regulations to protect workers employed at informal sectors and so on is required.
Key words: Microfinance, female entrepreneurs, informal sector, firm productivity, India
1. Introduction
In recent years, governmental and non governmental organizations in developing countries have introduced microfinance programs offering financial services to low income households especially targeting women. In 2007, more than 100 million of the world’s poorest families received microfinance and women made up 80 percent of the clients. The growth in the number of very poor women reached has gone from 10.3 million at the end of 1999 to 88.7 million at the end of 2007 (Microcredit Summit Campaign 2009). This is 7.6 times increase in the number of poorest women. The increase represents additional 78 million poorest women receiving microfinance in the last eight years.
Access to credit has received greater attention in the context of poverty reduction and women’s empowerment objectives. The Millennium Development Goals (MDGs) were adopted by world leaders at the United Nations Millennium Summit in 2000. They set measurable and time bound goals, which range from combating poverty, promoting gender equity and empowering women. With the aim to meet MDGs, there has been an increasing expectation on the impact of microfinance programs on women empowerment.
Then, I would like to raise a question, “Why most microfinance borrowers are women?” This is because formal sector commercial banks tend to favor men, mainly because men run the larger business that commercial banks favor. In addition, men tend to control the assets that bank seeks as collateral. Thus, traditionally women have been disadvantaged in access to credit and other financial services despite the fact that nearly 70% of the world’s poor are women.
Therefore, increase in the number of poorest women receiving microfinance leads to good effect on poverty reduction. It may deliver stronger development impacts. Blumberg (1989) finds that women tend to be more concerned about children’s health and education than their husbands. Children’s welfare improves as women’s earning power increases. It suggests that lending to women yields greater social and economic impacts.
Microfinance enables women not only to increase the bargaining power within households, but also enables them to undertake income generating activities. It is estimated that women-owned businesses account for over one-third of all firms, and they are the majority of businesses in the informal sectors in developing countries. They play a major role in creating jobs and generating income for low-income people. This means that expanding microfinance services for women may be the key to alleviate poverty and attain sustainable economic growth in developing countries.
Then, I would like to raise one more basic and direct question; are microfinance really helpful for women who are supposed to be the poorest of the poor? Increasing women’s access to microfinance really enables them to undertake income generating activities? Are there any differences in the impact of microfinance on firm productivity based on the gender of the entrepreneurs? Targeting women is efficient or not?
So far, there is very little data and quantitative research that rigorously examine the impact of microfinance especially by gender. However, fortunately, I could obtain the data from New Life, a NGO based in India. Using the data, the objective of this study is to identify the determinants of firm productivity and verify whether microfinance is really helpful especially for female entrepreneurs in India.
This paper is organized as follows. Section 2 presents Indian economy and microfinance perspective in India. Section 3 describes brief overview of the New Life, a NGO based in India. In addition, the data description and methodology to analyze the impact of the microfinance will be explained. In section 4, the results of the data analysis will be presented. Finally, Section 5 concludes this paper and enumerates the policy implications of this study.
2. Microfinance in India
2-1. Indian Economy
India’s GDP was 1,171 (US$ billions) in 2007 and its annual growth rate of GDP per capita was 7.7%. In the past two decades, India has been making outstanding and sustained progress. At the time of independence in 1947, India was a low income country with mass poverty. Now, the number of very poor people in India is diminishing and now it stands on the edge of the threshold to become the ranks of the world’s middle-income countries.
Since its independence, India reduced the number of absolute poverty by more than half, but the issue of poverty is still prevalent concern. It is estimated that 300 million people out of total population, 1 billion are living below the poverty line. If the poverty line is set from 1 dollar a day to 2 dollar, the number of people living below the poverty line will be increased to 500 million, which is surprisingly half of total population of India. Thus, it is quite essential for Indian governments to develop policies to balance between economic growth and poverty reduction.
Inequality between urban and rural areas is one of the important features of poverty in India. Figure 1 represents poverty situation in India from 1977. This inequality is due to uneven division of natural resources. Poor natural resource endowments and poor access to natural resources is one of the most important causes of poverty. It is estimated that nearly two-thirds of poor people in India are living in rural areas such as Bihar, Orissa, Uttar Pradesh, Madhya Pradesh, and Maharashtra states. It is also said that India’s richest states have incomes that are five times higher than those of the poorest states.
The reason that poverty concentrates on rural area is that rural Indians primarily depend on agriculture income, which is highly dependent on natural condition such as precipitation amount. Inadequate rain and improper irrigation facilities can obviously cause low and sometimes no production of crops. To cope with this, it is better to diversify the risks. It will be essential for India to facilitate non-farm entrepreneurship to get the rural economy moving. Encouraging policies that promote competition in agricultural marketing will also ensure that farmers receive better prices.
On the contrary, poverty prevails in urban area also. Increase in the populations is the main reason for urban poverty. This is due to migration of the rural families from villages to cities. This migration is mainly caused by poor employment opportunities in villages. This situation is exacerbated the fact that there are few job opportunities in urban areas, too.
To combat this situation, creating jobs with good wages in both urban and rural areas is essential. In this context, small enterprises are critical for the economy and social development of emerging markets. They play an important role in creating jobs and generating incomes for low-income people. For example, in Africa, small enterprise and informal sector provide more than 80 percent of jobs today. Also in India, most manufacturing jobs are in the informal sector and they employ 40 percent of the country’s worker. This is disproportionately large compared to other countries in Asia; for example, in Korea it’s only 4 percent. To expand job opportunities in India, the governments should design better labor regulations to attract more labor intensive investment. It also critical to develop strategies to foster informal sector jobs characterized by low productivity and wage into formal sector so that workers can earn higher wage and to be protected by labor laws. In addition, access to financial services for small enterprises remains severely constrained, promotion of efficient, sufficient and widely accessible financial services for them is a key to achieve pro-poor and poverty reduction goals.
2-2. Overview of Microfinance in India
India is one of the largest emerging markets in microfinance in the world. For more than two decades, microfinance initiatives have supported low income Indian households with access to financial services.
Its history started in the early 1980s, with forming informal Self Help Groups (SHGs). Based on the concept of “self-help”, women have formed small groups of ten to twenty and operate a savings-fast business model. The member’s savings are used to fund loans.
Since then, the microfinance sector has grown significantly in the past decades. In the early 1990s, the SHG model was initiated by the National Bank for Agriculture and Rural Development (NABARD) through the SHG-Bank Linkage Program, which links informal women’s groups to formal banks. This concept held great appeal for non-government organizations (NGOs) working with the poor, prompting many of them to collaborate NABARD in the program. Today the SHG model has the largest outreach to microfinance clients in the world.
On the contrary, Micro Finance Institutions (MFIs), largely of non-profit origins, emerged in the late 1990s and their growth is remarkable. Figure2 shows growth trend of MFIs in India from 2003. Today there are over 1,000 Indian MFIs and the number of borrowers has reached nearly 4.5 million. MFIs have emerged as strategic partners to individuals and entities interested in reaching out to India’s low income clients.
3. New Life
3-1. Overview of the organization
“New Life”, one of the promising NGOs in India, established in 1993 with the help of philanthropists from various fields such as agriculture, engineering, medical and so on. Their mission is to bring to mainstream the women and their children belonging to weaker sections who are far behind their counterparts in socio-economic status. Under this mission, New Life is undertaking wide range of projects such as crèche program for the children of women prisoners, rehabilitation of prisoners, child labor schools, livelihood improvement program for women, health program, skill training for the women members and the members in prison, adult literacy program, and micro insurance and so on.
One of their core projects is empowering poor women through microfinance. New Life started this service from 1995. As of today, the number of the clients has reached 23,680 since the service has been started. Women constitute 97.5% of the entire members and the repayment rates are surprisingly 100%. This can be achieved thorough education thorough credit discipline, regular follow-up by the staffs, selection method of borrowers and finally, peer pressure among the group members. New Life requires members to form groups. As the earlier member in the group repay, the other member gets the loan. Thus, peer pressure is built in the system. In addition, to lower the cost of borrowing, New Life provides marketing linkage thorough online microfinance platform called “rang de” where the social investors are encouraged to help the women to improve the quality of produce they make, registration of their units, licensing formalities, and marketing tie-ups suggested by investors.
3-2. Description of Study Site and Data
The data used in this research were provided by the New Life. The first survey was conducted in 2005 and the second one was in 2008. 30 female entrepreneurs and 20 male entrepreneurs were selected through sampling from all the geographic area where New Life works, which is Trichirappalli District. As Figure 3 shows, Trichirappalli District is located along the Kaveri River in Tamil Nadu State, one of the largest states in India. The survey area covers 11 rural villages in this district. Almost all the selected male entrepreneurs live in Srirangam village except one. This is simply because the data of male entrepreneurs were provided by a branch office near Srirangam.
In Tami Nadu State, there were about 62.41 million people, which are corresponding to 6% of total population in India according to 2001 national census. About 56% of the population lives in rural area and the city’s population is predominantly Hindu and there are sizable Christian and Muslim populations.
Tami Nadu has achieved significant development success over the last 15 years. It is one of the India’s most industrialized states with economic growth rates which are above the national average. The state’s performance in social issues such as literacy rate (male literacy rate is 94.17% and female literacy rate is 88.73%, those are higher than that of average rate, 66%), life expectancy, gender equality, female mortality rate, and access to safe drinking water, are impressive.
Despite these achievements, the states have over 12 million people still living below the poverty line, the majority in rural areas. In rural village economy such as the survey area, agriculture is major income source of people. On average, people get employment in agriculture sector for 250 days a year. Rural poverty is concentrated among landless agriculture workers and small farmers, who constitute 46% of the rural workforce. They are suffering from vulnerability of income variation since agriculture depends on natural conditions such as precipitation amount. It is also said that women headed households in rural areas are worst affected by poverty.
The government of Tami Nadu focused on reducing poverty among women, children and vulnerable people through empowerment and employment. The state spends 30% of its budget on social welfare and rural development programs. One such successful program is Mahalir Thuttam (A program for women) implemented in 1992. Its aim is to empower the poor women thorough forming community thorough Self Help Groups and by providing access to credit and other linkages. As a result of this program, a saving of Rs.8100 million has been mobilized by the members and credit linkage of Rs.14290 has been provided. In addition to the mobilization of the money, this program has been successful in empowering women socially, making them aware of the government scheme and so on. However, the success achieved in social empowerment has not translated in economic empowerment. One of the reasons is that the program emphasized on credit activities too much. To provide credit is important to reduce poverty, however, how to achieve sustainable livelihood improvement should be considered at the same time. For example, fostering micro enterprises to generate income activities should have been emphasized more.
In such circumstance, the activities of New Life are important. New Life is implementing Livelihood Improvement Program from 1994 by forming Self Help Groups among the poor women and they are trained to take up small enterprises aiming at generating incomes for their families. The women members are engaged in artisan works, handicrafts, service sector, small business, vending, and self employment initiatives and their activities are monitored periodically by the Livelihood Improvement Committee of the organization. The activities of New Life have social significance and it is hoped that New Life take active role in empowering women more than ever.
3-3. Characteristics of Sample Enterprises
Table 1 summarizes the characteristics of sample enterprises based on gender of the entrepreneurs; the mean values of firm productivity, years of schooling of entrepreneurs, and the number of employees and so on. They are all unregistered micro and small enterprises with less than 10 workers except two; female entrepreneurs who engaged in brick works and banana production have 20 and 12 workers respectively. They all started their business using New Life’s microfinance service except one male entrepreneur. All of their businesses are categorized as service sectors such as flower sales, photo studio, grocery shops, tailor shop, laundry shop, brick work, and hotel and so on except one. Only one female entrepreneur started banana production business, categorized as agriculture sector. Then, why most of the clients using microfinance have started service businesses not agriculture or manufacturing services? There are mainly two reasons. One is that they were already agriculture workers and they rank them as side businesses. Second reason is that service sectors require less initial investment compared to manufacturing sector in general, so it is easier to start their businesses.
According to NationMaster, the average years of schooling of adults in India are 5.5 years. Educational level of New Life clients is higher than this; female entrepreneurs 7.9 years and male entrepreneurs 9.9 years. On average, male entrepreneurs received higher education by two years compared to that of female. Another interesting feature is that age of female entrepreneurs is higher and they operate their businesses longer compared with that of male entrepreneurs on average.
Regarding the annual loan size, female entrepreneurs borrowed Rs 27,023 in 2008 and this amount was larger than that of male counterparts as well as the amount of microfinance. This is because female entrepreneurs rely on microfinance as business loan but they diversify their credit sources and they also used banking services. On the contrary, male entrepreneurs rely on microfinance as major source of their business loan and they did not use banking services except one entrepreneur. This is due to lack of credit discipline; most male entrepreneurs had bad debts in their early loans with banks. In addition, the bank loans are not easily accessible like microfinance because of the following reasons. First, bank loans are mostly available only for a team loan and when the loan is outstanding, a successive loan is usually not allowed. Second, the loan limit fixed by banks is mostly underfinanced. Third, the stipulation such as margin (contribution from borrowers) and collateral security requirement is difficult to comply with. Finally, banking working hours is not suitable for agricultural wage earners since they will lose their daily wage income. In addition, bureaucratic approach and unfriendly attitude of officials of banking sector also keep people away.
Next, regarding the firm productivity, both female and male entrepreneurs achieved significant growth rates in sales and profit from 2005 to 2008. Especially, female-owned business showed remarkable growth in profit, which is more than six times higher than that of 2005 although they hold less amount of the asset compared to that of male entrepreneurs.
In the next section, I would like to assess the determinants of the firm productivity; sales and profit growth from 2005 to 2008 using the ordinary least squares (OLS) regression model.
3-4. Methodology
In introduction part, I raised several questions; does microfinance really helpful for women? Are there any differences in the impact of microfinance on firm productivity based on the gender of the entrepreneurs? To answer these questions, the determinants of the firm productivity have to be analyzed quantitatively. To do this, the OLS regression model is employed. I set two dependent variables; sales and profit growth. The econometric model is expressed as follows respectively;
where the dependent variable, SalesGrowthi is the sales growth rate from 2005 to 2008. The independent variables are defined as follows:
DummySex =1 if gender of the entrepreneurs is female, =0 if otherwise,
Age = the age of the entrepreneurs,
Agesq = the square value of the age of the entrepreneurs,
Edu = the years of schooling of the entrepreneurs,
Edusq = the square value of the years of schooling of the entrepreneurs,
Firmage = the age of the firms,
Asset08 = the value of the firm’s asset in 2008 (Rs),
MFshare = the share of microfinance out of total loan,
Dummylocal1 = 1 if the firm(s) located in Srirangam village, =0 if otherwise,
Dummylocal2 = 1 if the firm(s) located in Tolgate village, =0 if otherwise,
Dummylocal3 = 1 if the firm(s) located in Aiamangalam village, =0 if otherwise,
Dummylocal4 = 1 if the firm(s) located in Kajepettai village, =0 if otherwise,
Dummylocal5 = 1 if the firm(s) located in Thandankorai village, =0 if otherwise,
Dummylocal6 = 1 if the firm(s) located in Manjakorai village, =0 if otherwise,
Dummylocal7 = 1 if the firm(s) located in Amoor village, =0 if otherwise,
Dummylocal8 = 1 if the firm(s) located in Gunaseelam village, =0 if otherwise,
Dummylocal9 = 1 if the firm(s) located in Sathyamoorthinagar village, =0 if otherwise,
Dummylocal10 = 1 if the firm(s) located in Kallur village, =0 if otherwise,
Dummylocal11 = 1 if the firm(s) located in Keelavalady village, =0 if otherwise,
ei = the error term, which is normally distributed with zero mean, and αs = regression coefficients. The determinants include the characteristics of entrepreneurs (sex, age and education), the enterprise characteristics (production experience in terms of firm age since establishment, total asset value in 2008), locational dummies and the share of microfinance out of the entire credit sources.
In the second stage, I would like to identify the determinants of the profit growth. The economic model is expressed as follows;
where the dependent variable, ProfitGrowthi is the profit growth rate from 2005 to 2008. The independent variables are defined as same as the first stage. βs equal to regression coefficients.
4. Results of econometric analysis
Table 2 presents the result of estimating the determinants of sales growth from 2005 to 2008. The results suggest that gender of the entrepreneurs is statistically significant at 5 percent level. The positive coefficient of the dummy variable of entrepreneurs’ gender means holding other factors constant, being female entrepreneurs increase the sales growth rate by 7.7 percent. This suggests that enterprises owned by female entrepreneurs grew faster than those owned by male entrepreneurs. In addition, the coefficient of local dummy, Kajepettai village is negative and significant. This should be investigated more.
As for the profit growth (Table 3), again, the gender of entrepreneurs is statistically significant and positive at 1 percent level. This means that being female entrepreneurs increase the profit growth by 22 percent holding other factors constant. This may be attributing to New Life’s activity of training women on entrepreneurship. In addition, a statistically significant positive coefficient of the entrepreneurs’ years of schooling and a statistically significant negative coefficient of the education squared indicate an inverted U-shape pattern between profit growth and the educational level of entrepreneurs. Moreover, the sign of the coefficient of independent variable, the share of microfinance is positive as expected. Even though it is not statistically significant, it may suggest that the higher the share of microfinance out of the entire credit resources, the higher the profit growth of the enterprise. None of the local dummies are significant, indicating there are no specific regional effects.
5. Conclusion
The objective of this study is to identify the determinants of firm productivity in India and verify whether microfinance is really helpful for female entrepreneurs or not. The major findings are as follows. First, the data shows that the enterprises owned by female entrepreneurs achieved significant increase in both sales and profit growth relative to male entrepreneurs. In particular, the average profit growth rate of female entrepreneurs is remarkable. Also, the data shows that annual loan size of female entrepreneurs is larger relative to male entrepreneurs. Female entrepreneurs rely on microfinance as their major credit resources; however, they also used banking services. On the contrary, male entrepreneurs rely much more on microfinance and they did not use banking services. This reveals that most male entrepreneurs had bad debts in their early loans with banks. As next stage, the OLS regression results show that the gender matters to both sales and profit growth; being female entrepreneurs increase both sales and profit growth rates. In addition, the inverted U-shape pattern between profit growth and the educational level of entrepreneurs is proved. Finally, it is not statistically significant, but higher share of microfinance out of the entire credit sources may lead to higher profit growth of the enterprises.
To sum up, targeting women is efficient since female entrepreneurs can operate their business more profitable than male entrepreneurs. In addition, since entrepreneurs who use more microfinance may lead to higher profit growth, it is verified that empowering women through microfinance is an effective way to increase firm productivity and eventually, it will lead to poverty alleviation.
However, microfinance itself is not enough to achieve sustainable growth of their business. At the same time, training programs on technology and management for entrepreneurs should be provided to stimulate their innovations. New Life already implemented Livelihood Improvement Program to train poor women to take up small enterprises aiming at generating incomes for their families, their active role in this field are very much hoped more than ever. Furthermore, the role of the government is also critical. To create more jobs and help micro enterprises to achieve their sustainable growth, the government has to play a role as a facilitator so that workers employed at informal sectors are able to get requisite level of social protection and security to have decent working environment enabling them to express their skills fully and enhancing their competitiveness of their outputs and thereby raising their income and social status. Finally, to assess whether microfinance is working well in the region or not, more empirical research on microfinance effect using the data should be encouraged. Ideally, to major the impact of microfinance more rigorously, the comparison of same characteristics of enterprises with microfinance and without microfinance is needed.
REFERENCES
Asami Takeda. “The Impact of ROSCA Participation on Household Schooling Expenditure : The Case of Kenya.” FASID/GRIPS Joint Graduate Program on International Development Studies, Applied Development Research, 2008.
Asenso-Okyere, W.K. “Policies and Strategies for poverty alleviation in Ghana” Institutes of Statistical , Social and Economic Research, University of Ghana, Accra, Technical Publication No.57, 1993.
Blumberg, Rae. “Entreprenuership, credit, and gender in the informal sector of the Dominican Republic.” In Women in Development: A.I.D.’s Experience, 1973-1985, vol.2, 1989. .
Cheston, Susy and Kuhn, Lisa. “Empowering Women through Microfinance.” UNIFEM, 2002.
Dale W Adams and Delbert A.Fitchett. “Informal finance in low-income countries.” Westview press, 1991.
Hayami, Yujiro and Yoshihisa Godo. “Development Economics: From the Poverty to the Wealth of Nations.” Oxford; New York: Oxford University Press, pp.245-246, 2005.
Hulme, David. “Impact assessment methodology for micro finance.” World Development, 1995.
John E. Akoten, Yasuyuki Sawada and Keijiro Otsuka. “The Determinants of Credit Access and Its Impacts on Micro and Small Enterprises: The Case of Garment Producers in Kenya.” The University of Chicago, 2006.
Kimuyu, Peter. “Micro-level institutions & enterprise productivity: insights from Kenya’s small business sector.” World Development, 2001.
Linda Mayoux. “Women’s Empowerment through Sustainable Microfinance: Rethinking Best Practice.” 2005.
Morduch, Jonathan and Armendariz, Beatriz. “The Economics of Microfinance.” Boston: Massachusetts Institute of Technology, 2005.
N.Kavitha and A.Ramachandran. “Overview of Microfinance for Women in India.”
Rahmat Megananda Achmad Maulana. “The Impact of Microfinance to Micro and Small Enterprise’s Performance and the Improvement of Their Business Opportunity.” Padjadjaran University, 2006.
Ranjula Bali Swain. “Does Microfinance Empower Women? Evidence from Self Help Groups in India.” Uppsala University Working Paper No.2007:24, 2007.
Shwetlena Sabarwal and Katherine Terrell. “Does Gender Matter for Firm Performance?” The World Bank Policy Research Working Paper No.4705, 2008.
Stevenson, Lois and St-Onge, Annette. “Support for Growth-oriented Women Entrepreneurs in Kenya.” ILO, 2005.
Susy Cheston. “Just the Facts Ma’am: Gender Stories from Unexpected Sources with Morals and Microfinance.” Opportunity International, 2006.
Microcredit Summit Campaign Report 2009
CELENT. http://www.celent.com/124_466.htm (retrieved in 4/2009).
EconomyWatch. http://www.economywatch.com/indianeconomy/indian-economy-overview.html (retrieved in 4/2009).
Nation Master.com. http://www.nationmaster.com/country/in-india/edu-education. (retrieved in 4/2009).
Wednesday, May 13, 2009
HAND WASHING
A Forgotten Power Tool - Hand washing
It seems silly to have to write about so basic a habit. Of all the health safety measures available, this is the easiest to forget! Hand washing is the first line of defense against the spread of many infections, from the ubiquitous diarrhoea, to the cough and cold, to more serious illnesses which may need visits to the doctor and/or hospitalization.
Millions of germs inhabit every square centimeter of this planet, while most we could not do without, an equal number can cause disease.
There is no place on Earth that we can avoid germs, unless we are in a deliberately controlled atmosphere like a surgical operation theatre. Unknowingly one becomes infected by touching their eyes, nose, or mouth. Think of what you touched today, the sink and taps in the toilet, handles of your bike, the staircase railing, your shoes, the floor when you picked up a dropped pen. It is impossible to narrate the places where you may have picked up the germs. What matters, is to know that you washed your hands after, then touched any surface of your body, not covered by skin, the God given natural barrier.
Germs spread in many ways e.g. by touching dirty hands, or objects which may appear clean, from using the toilet, through contaminated food or water, through droplets from a cough or a sneeze, via contaminated surfaces, commonly the staircase railing in a public place, handling a favorite pet/animal, contact with a sick person.
Unclean nails are a reservoir of grime and dirt, which can transmit a host of infections. Worm infestations, which in turn cause anemia, malnutrition and diarrhea, are so common that we accept them as part of the tropical exposure.
Would you have ever thought that even handling coins and paper money can cause eye infections and tuberculosis!
Proper hand washing begins with wetting the hands, rubbing soap, making foam for about 15-20 seconds, remembering the backs of the hands, web spaces and nails, then rinsing and wiping. Keeping the nails short and clean
In many old Hindi movies, we see the father enter the house, take off his outer wear, his shoes, and wait at a courtyard tank/well for someone to come and give him water to wash his hands, feet and face, wipe with a clean cloth, then change to home slippers. By not touching the water, he kept the germs away from it, the outside dirt he left near the door, before he touched his children and other family members. Also everyone had to wash hands before sitting down to a meal. How can we have dropped these habits in the name of progress?
It seems silly to have to write about so basic a habit. Of all the health safety measures available, this is the easiest to forget! Hand washing is the first line of defense against the spread of many infections, from the ubiquitous diarrhoea, to the cough and cold, to more serious illnesses which may need visits to the doctor and/or hospitalization.
Millions of germs inhabit every square centimeter of this planet, while most we could not do without, an equal number can cause disease.
There is no place on Earth that we can avoid germs, unless we are in a deliberately controlled atmosphere like a surgical operation theatre. Unknowingly one becomes infected by touching their eyes, nose, or mouth. Think of what you touched today, the sink and taps in the toilet, handles of your bike, the staircase railing, your shoes, the floor when you picked up a dropped pen. It is impossible to narrate the places where you may have picked up the germs. What matters, is to know that you washed your hands after, then touched any surface of your body, not covered by skin, the God given natural barrier.
Germs spread in many ways e.g. by touching dirty hands, or objects which may appear clean, from using the toilet, through contaminated food or water, through droplets from a cough or a sneeze, via contaminated surfaces, commonly the staircase railing in a public place, handling a favorite pet/animal, contact with a sick person.
Unclean nails are a reservoir of grime and dirt, which can transmit a host of infections. Worm infestations, which in turn cause anemia, malnutrition and diarrhea, are so common that we accept them as part of the tropical exposure.
Would you have ever thought that even handling coins and paper money can cause eye infections and tuberculosis!
Proper hand washing begins with wetting the hands, rubbing soap, making foam for about 15-20 seconds, remembering the backs of the hands, web spaces and nails, then rinsing and wiping. Keeping the nails short and clean
In many old Hindi movies, we see the father enter the house, take off his outer wear, his shoes, and wait at a courtyard tank/well for someone to come and give him water to wash his hands, feet and face, wipe with a clean cloth, then change to home slippers. By not touching the water, he kept the germs away from it, the outside dirt he left near the door, before he touched his children and other family members. Also everyone had to wash hands before sitting down to a meal. How can we have dropped these habits in the name of progress?
Friday, May 8, 2009
Education -Brings major change in the minds of Prisoners
Hi,In this section, we bring about the changes the education had brought in the minds of prisoners in Trichirappalli, South India is brought in.The 12 years successful experience of our NGO New Life is documented in this section.
" REFORMATION THROUGH EDUCATION " A SUCCESS STORYIN TRICHY RANGEEducation is essential in any walk of life in the modern scenario. Changes are bound to take place where education spreads its wings. The aim of education is enrichment of personality. With the changes in the objective of imprisonment from custody to reformation, education has become a major plank in the correctional system.The objective of Prison Education has come to mean, socialization and rehabilitation of the inmate so that they may return to society as normal citizens. Education is a process by which the knowledge, character and behavior of the inmates can be moulded.The problem of education in jails involves more intensive organization than in society in general. Education in jails is not simply related to literacy but it is essentially correlated with the problem of reorientation and treatment of personality disorders of deviants. The task of re-education of offenders is much more difficult than ordinary education. Deeply rooted complexes have to be resolved in order to make them normal citizens. Re-education of the offenders is possible only in a wholesome environment where the teachers have a humanitarian approach and give attention where necessary. As the inmates are very much interested in learning in batches educational programmes conducted not exceeding two hours per day.EDUCATIONAL ACHIEVEMENTS OF CENTRAL PRISON TRICHY INMATESCentral Prison, Trichy is one of the biggest prison in the country. Prisoners from Trichy, Karur, Perambalur, Ariyalur, Tanjore, Pudukottai, Sivaganga, Dindugal and Tiruvarur districts are being lodged here. In time of yore, the prime aim in setting up a jail was to segregate the offenders from society. But as per the modern social systems and concept prisons are not a place for punishment, but a centre of correctional treatment and reformation. The Central Prison, Trichy functions as per this ideology for the betterment of the victims of circumstances. So Rehabilitation through Education is the present strategy of this prison, Educate and illuminate is its present slogan and moto.Earlier the Central Prison had only adult education. Realizing the need of education at all levels for the creating awareness in the mind of the inmates, which can lead to their transformation four level education programme were organized.
1. Academic Education
2. Vocational Education
3. Computer Education
4. Non formal Education
1. ACADAMIC EDUCATION
a) Primary Education -
Adult Education CentreA Primary Literacy Programme is organized for the illiterate inmates who form the major population of the prison. Educated inmates, service minded students, teachers and retired teachers help in educating the illiterate.b) Higher EducationFour Special Study Centres have been established for the benefit of the literate inmates who have qualified through the Adult Education School.
1. Indira Gandhi National Open University Special Study Centre.
2. Tamil Nadu Open University Study Centre.
3. Madras University Distance Education Study Centre.
4. Manonmaniam Sundaranar University
Every academic years more number of prison inmates have studied and completed their studies such as Under Graduate, Post Graduate and other Professional CoursesMADRAS UNIVERSITY (INSTITUTE OF DISTANCE EDUCATION CHENNAI, TAMILNADU)Distance Education Programme was commenced in the
Year No.of Inmates
2003-2006 M.A (History) 14
2003-2006 B.A Music 7
TAMIL NADU OPEN UNIVERSITY, CHENNAI.This Year 2007 - 2008 there are more inmates of Prison under go various UG Courses
Year Course Duration No.of Inmates
2007-2008 B.C.A 3 Yrs 9
B.Com 2
B.Sc (Psychology) 1
B.A (Public Administration) 5
B.A (English) 1
B.A (History) 7
B.A (Social Work) 3
B.A (Physical Science) 11
B.A (Economics) 8
Total 47
INDIRA GANDHI NATIONAL OPEN UNIVERSITY, DELHI.The Following Course have been under taken by the prisoners in IGNOU from the Year 2002 to 2008
Year No.of Inmates Benefited
2001-2002 Certificate in Computer (CIC) 13
2002-2003 Certificate in food and nutrition(C.F.N) 14
2003 - 2004 12
2005 - 2006C.F.N & C.W.D.L 22(Women Empowerment)
2006 - 2007 C.F.N 10
2007 - 2008 C.F.N & C.W.D.L 15
to be enrolledMANONMANIAM SUNDARANAR UNIVERSITY, TIRUNELVELI.The following course have been taken from Manonmaniam Sundaranar University
Year Course Duration No.of Inmates Benefited
2000 - 2002 M.A (History) 2 Years 14
2001 - 2003 M.A (History) 122
VOCATIONAL EDUCATION
Vocational Education also called carrier and technical education prepares learners for carriers that are based in manual are practical activities, traditionally non academic and totally related to a specific trade, occupation or vocation, hence the term in which the learners participate. In Central Prison, Trichy the following vocational Education are imparted to the prisoners through various institutions.
VARIOUS VOCATIONAL COURSES
There are various Vocational Courses initiated in Year 2007
Year Course No. of Inmates Enrolled
2007 - 2008 Four Wheeler Mechanic 1 year 32
2007 - 2008 Fashion Design 1 year 7
2007 - 2008 House Electrician 1 year 18
2007 - 2008 Air condition & refrigeration 1 Year 18
Total 75
PLUMBING TRAINING
(Technical Trading Programme )There are also Certificate Courses from the year 2004 to 2007
Year No. of Inmates Benefited
2004 58
2005 48
2006 35
2007 53
COMPUTER EDUCATION:
After Education through university, Computer Education has been introduced to inmates as a continuing process of reformation. Successful inmates are issued Completion Certificates.In Central Prison, Trichy, Computer Education has been offered from the year 2003 to 2007. The Details of Inmates benefited in the Computer Education are furnished below.
Year Course No.of Inmates Benefited
2003-2004 Computer Basics & Office Automation 34
2004-2005 Computer Basics & Office Automation 54
2005-2006 Computer Basics & Office Automation 50
2006-2007 Computer Basics & Office Automation 50
2007-2008 Computer Basics & Office Automation 94
NON FORMAL EDUCATIONIn Central Prison,Trichy Continuing Education has been started with the help of the District Collector, Trichirappalli. The Educative prisoners have been appointed as instructors. The Non formal Education Scheme namely Valarkalvi Thittam was launched in the all the prisons of Trichy Range and this Scheme is a Special type of Educational scheme in which inmates at the age from 18 to 81 are benefited. Date of commencement and number of inmates being benefited are given below.
Period No. of prisoners being benefited.
15.09.2007 to 30.09.2007 210
01.10.2007 to 31.10.2007 218
01.11.2007 to 30.11.2007 212
01.12.2007 to 31.12.2007 205
01.01.2008 to 31.01.2008 207
01.02.2008 to 29.02.2008 210
Press had also covered our efforts in coordinating with various Universities/Instituions in arranging these educational programmes going on in Central Prison, Trichirappalli for the benefit of the public.
" REFORMATION THROUGH EDUCATION " A SUCCESS STORYIN TRICHY RANGEEducation is essential in any walk of life in the modern scenario. Changes are bound to take place where education spreads its wings. The aim of education is enrichment of personality. With the changes in the objective of imprisonment from custody to reformation, education has become a major plank in the correctional system.The objective of Prison Education has come to mean, socialization and rehabilitation of the inmate so that they may return to society as normal citizens. Education is a process by which the knowledge, character and behavior of the inmates can be moulded.The problem of education in jails involves more intensive organization than in society in general. Education in jails is not simply related to literacy but it is essentially correlated with the problem of reorientation and treatment of personality disorders of deviants. The task of re-education of offenders is much more difficult than ordinary education. Deeply rooted complexes have to be resolved in order to make them normal citizens. Re-education of the offenders is possible only in a wholesome environment where the teachers have a humanitarian approach and give attention where necessary. As the inmates are very much interested in learning in batches educational programmes conducted not exceeding two hours per day.EDUCATIONAL ACHIEVEMENTS OF CENTRAL PRISON TRICHY INMATESCentral Prison, Trichy is one of the biggest prison in the country. Prisoners from Trichy, Karur, Perambalur, Ariyalur, Tanjore, Pudukottai, Sivaganga, Dindugal and Tiruvarur districts are being lodged here. In time of yore, the prime aim in setting up a jail was to segregate the offenders from society. But as per the modern social systems and concept prisons are not a place for punishment, but a centre of correctional treatment and reformation. The Central Prison, Trichy functions as per this ideology for the betterment of the victims of circumstances. So Rehabilitation through Education is the present strategy of this prison, Educate and illuminate is its present slogan and moto.Earlier the Central Prison had only adult education. Realizing the need of education at all levels for the creating awareness in the mind of the inmates, which can lead to their transformation four level education programme were organized.
1. Academic Education
2. Vocational Education
3. Computer Education
4. Non formal Education
1. ACADAMIC EDUCATION
a) Primary Education -
Adult Education CentreA Primary Literacy Programme is organized for the illiterate inmates who form the major population of the prison. Educated inmates, service minded students, teachers and retired teachers help in educating the illiterate.b) Higher EducationFour Special Study Centres have been established for the benefit of the literate inmates who have qualified through the Adult Education School.
1. Indira Gandhi National Open University Special Study Centre.
2. Tamil Nadu Open University Study Centre.
3. Madras University Distance Education Study Centre.
4. Manonmaniam Sundaranar University
Every academic years more number of prison inmates have studied and completed their studies such as Under Graduate, Post Graduate and other Professional CoursesMADRAS UNIVERSITY (INSTITUTE OF DISTANCE EDUCATION CHENNAI, TAMILNADU)Distance Education Programme was commenced in the
Year No.of Inmates
2003-2006 M.A (History) 14
2003-2006 B.A Music 7
TAMIL NADU OPEN UNIVERSITY, CHENNAI.This Year 2007 - 2008 there are more inmates of Prison under go various UG Courses
Year Course Duration No.of Inmates
2007-2008 B.C.A 3 Yrs 9
B.Com 2
B.Sc (Psychology) 1
B.A (Public Administration) 5
B.A (English) 1
B.A (History) 7
B.A (Social Work) 3
B.A (Physical Science) 11
B.A (Economics) 8
Total 47
INDIRA GANDHI NATIONAL OPEN UNIVERSITY, DELHI.The Following Course have been under taken by the prisoners in IGNOU from the Year 2002 to 2008
Year No.of Inmates Benefited
2001-2002 Certificate in Computer (CIC) 13
2002-2003 Certificate in food and nutrition(C.F.N) 14
2003 - 2004 12
2005 - 2006C.F.N & C.W.D.L 22(Women Empowerment)
2006 - 2007 C.F.N 10
2007 - 2008 C.F.N & C.W.D.L 15
to be enrolledMANONMANIAM SUNDARANAR UNIVERSITY, TIRUNELVELI.The following course have been taken from Manonmaniam Sundaranar University
Year Course Duration No.of Inmates Benefited
2000 - 2002 M.A (History) 2 Years 14
2001 - 2003 M.A (History) 122
VOCATIONAL EDUCATION
Vocational Education also called carrier and technical education prepares learners for carriers that are based in manual are practical activities, traditionally non academic and totally related to a specific trade, occupation or vocation, hence the term in which the learners participate. In Central Prison, Trichy the following vocational Education are imparted to the prisoners through various institutions.
VARIOUS VOCATIONAL COURSES
There are various Vocational Courses initiated in Year 2007
Year Course No. of Inmates Enrolled
2007 - 2008 Four Wheeler Mechanic 1 year 32
2007 - 2008 Fashion Design 1 year 7
2007 - 2008 House Electrician 1 year 18
2007 - 2008 Air condition & refrigeration 1 Year 18
Total 75
PLUMBING TRAINING
(Technical Trading Programme )There are also Certificate Courses from the year 2004 to 2007
Year No. of Inmates Benefited
2004 58
2005 48
2006 35
2007 53
COMPUTER EDUCATION:
After Education through university, Computer Education has been introduced to inmates as a continuing process of reformation. Successful inmates are issued Completion Certificates.In Central Prison, Trichy, Computer Education has been offered from the year 2003 to 2007. The Details of Inmates benefited in the Computer Education are furnished below.
Year Course No.of Inmates Benefited
2003-2004 Computer Basics & Office Automation 34
2004-2005 Computer Basics & Office Automation 54
2005-2006 Computer Basics & Office Automation 50
2006-2007 Computer Basics & Office Automation 50
2007-2008 Computer Basics & Office Automation 94
NON FORMAL EDUCATIONIn Central Prison,Trichy Continuing Education has been started with the help of the District Collector, Trichirappalli. The Educative prisoners have been appointed as instructors. The Non formal Education Scheme namely Valarkalvi Thittam was launched in the all the prisons of Trichy Range and this Scheme is a Special type of Educational scheme in which inmates at the age from 18 to 81 are benefited. Date of commencement and number of inmates being benefited are given below.
Period No. of prisoners being benefited.
15.09.2007 to 30.09.2007 210
01.10.2007 to 31.10.2007 218
01.11.2007 to 30.11.2007 212
01.12.2007 to 31.12.2007 205
01.01.2008 to 31.01.2008 207
01.02.2008 to 29.02.2008 210
Press had also covered our efforts in coordinating with various Universities/Instituions in arranging these educational programmes going on in Central Prison, Trichirappalli for the benefit of the public.
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