Spread of the Self-Help Groups Banking Linkage Programme in India
This article presents preliminary results of a geo-economic analysis of microfinance and, more specifically, of microfinanciarization. It applies recently released state and district data to explore the spatial evolution and distribution of Indias microfinance sector through the example of Self-Help Groups (SHGs). Microfinanciarization is the process of structural change that involves financial inclusion, regulation of informal financial practices and utilization of voluntary sector and third sector capabilities to provide financial services to financially-excluded people. India is experiencing a huge expansion of households linked to microfinance, more specifically to SHGs. An understanding of spatial variation and microfinance sector development can contribute to the formulation of innovative regional developmental polices. Study findings include:
- SHGs did not evolve evenly in different Indian states;
- Regional pattern emerged with a starting base in three southern states, Andhra Pradesh, Tamil Nadu and Karnataka and one northern state, Himachal Pradesh;
- International aid made an important contribution in the southern states;
- Andhra Pradesh, Karnataka, Tamil Nadu and Orissa currently have strong microfinance sectors.
