Role of micro-finance for economic uplift of urban poor women (A study on Rishi Para slum, Narayangang Pouroshova)
The goal of economic development of the
country is to increase the well being and quality of life of the population
through economic growth. Though women constitute about 49 percentages of the
total population of Bangladesh Bangladesh
Women face the greatest obstacles in the
working sector are – lack of access to resources or lack of capitals in urban
areas. From eighteen the lack of access to resources or lack of capitals has
largely been solved by the discovering Micro-finance techniques. Micro-finance
plays a great role in uplifting the social and economical conditions for the
poor women. It has been focused as an important financial instrument to generate
economic activity for the poor women in the informal sector. Women who are
involved in the urban informal sector activities have increasingly become a key
target group for micro-finance programmes. The strength of micro-finance lies
in its ability to organize idle women into a productive workforce with their
proven credit-worthiness. It is believed that 25 million people both in rural
and urban areas in the worldwide are now using micro-finance to undertake
income-generating or self-employment activities and 90% of them are women. The
impact of micro-finance is very much positive for the urban poor women.
Micro-finance not only makes women more productive, but it also empowers them.
Similarly, it can integrate the women into the mainstream of socio-economic activities
through contributing to family income and decision making and exercising more
control over their fertility. In spite of having some criticisms micro-finance
has been focused as a very effective instrument for economic upliftment of the
poor women in the third world countries like Bangladesh
1.2
Objectives
The specific objectives of the study are
as follows:
q
To
study the socio-economic conditions of the female headed urban poor households.
q
To
study the role of micro-finance for economic upliftment of urban poor women
engaged in the informal sector activities.
1.3
Research questions
Some
logical questions are essential for accomplish the study which may affect the
total study. The research findings will depend on the creative answers obtained
for these questions which also define the specific objectives of the research.
The research questions will be more objective oriented. The clarified
objectives depend on these questions as specified below:
· Who are the urban poor women?
· What is the status of the urban poor
women in terms of education, health, employment?
· What is informal sector?
· Why urban poor women want to be involved
in informal sector?
· What are the roles of informal sector
activities in employment creation among the urban poor women?
· What is the impact of informal sector
activities?
· What is micro finance?
· Who is the provider?
· What is the system of micro finance?
· What are the objectives of
micro-finance?
· What is the impact of micro finance on
its recipients?
· Why do urban poor women get involved in
micro finance?
· What are the indicators of economic
upliftment?
· How does micro finance help to economic
upliftment of the poor women?
· What are the roles of the micro-finance
in economic upliftment for the urban poor women?
· What are the problems of micro-finance
for the urban poor women?
1.4
Justification of the study
As a poor country most of the women are
illiterate and their social status is very low. Women are expected to perform
familiar rather than extra familiar roles and avoid contract with the public
realm, especially in terms of employment and exposure to strangers. They have
no direct control over the means of production or other social and economic
resources. Besides, the urban poor women lack capital to generate employment
and income. Where the formal banking system are failed to provide credit to the
poor women, the micro-finance organizations such as NGOs, Local somiti are the
great helping hand for the poor women access to credit. Micro finance extends
small loans (about tk 2000 to tk 25000) to very poor women for self-employment
projects that generate employment and income, allowing them to care for
themselves and their families.
Micro-finance can plays a very effective
function for economic upliftment of the urban poor women. Sufficient amount of
credit in a reasonable interest rate with reasonable installment and repayment
are the essential parts in terms of taking credit for the poor women. The poor
women want their required amount of credit in a reasonable interest rate with
reasonable installments and repayment period from the credit providers.
Besides, the micro-finance providers should provide credit for self employment
and income generating for the poor women.
The economic upliftment of the poor
women can be measured with the increase of employment, income, money
contribution to family, savings, access to expend for major resources,
insurance or life security and living standards. Taking finance, the urban poor
women can find works in informal sector, earn money which can help to uplift
their economic condition. Micro-finance not only provides finance but also
generates savings and insurances facilities for the poor women. These are
really beneficial for the economic upliftment of the poor women.
The current research tries to find out
how to uplift the economic condition of the poor women in Rishi Para slum
through involving into micro-finance.
1.5
Limitations of the study
Like
all other researches, this study also faced some problems such as, lack of
money and lack of time. As this study is related with people at the grass root
level, some extra problems were faced. The people of the slums are not educated
and aware of their problems so it was difficult to extract answers from them.
It was a hard job to identify the
socio-economic conditions of the poor people. Most often the occupations are
not permanent and income from these occupations could not be justified
properly. Like middle income and higher income people, the expenditure pattern
is not always well structured for the urban poor people and there are a few
specific fields for fixed expenditure. Moreover, there is a permanent disparity
between income and expenditure. Again, there is a tendency among the people not
to disclose the exact income to any other people and strangers. Hence, it was a
great problem in identifying the income and expenditure pattern of the slum dwellers.
Sometimes, it was difficult to
identify the age of the women. This was done in an indirect way; either from
the years the women spent for studies with respect to the current educational
condition or from age of marriage and so on.
It was very difficult task to
differentiate between primary and secondary occupations, as most of the
occupations are not permanent. Besides, these are some informal occupations
that have no fixed places to perform. For example, rickshaw drivers, daily
labours and hawkers. The distances between working places and residences for
these people could not be properly identified.
Another
problem was arisen during taking informations from the micro-finance
organizations. The organizations were not friendly to give real information.
The institutional setup for the
database management is not so rich in Narayangang Pouroshova. The secondary
sources of the data related to the Narayangang Pouroshova are not available.
Moreover, there are few researches
done on the micro-finance for economic upliftment of urban poor women and the
secondary sources of data related to the topic are not readily available.
1.6
Literature review
Limited publications have been found
having relevant articles and specific chapter and discussions about the analysis
of role of micro-finance in economic upliftment of urban poor women. Various
secondary sources like – Books, journals, unpublished thesis, reports etc.
Books
§
In “Expanding Micro credit Outreach to Reach the
Millennium Development Goal- some Issues for Attention” by Muhammad Yunus
(2005) described that Micro
finance Summit of 1997 set the goal to reach 100 million poorest families with
micro-finance, along with other financial services, preferably through the
women in those families by 2005. He said that by the end of 2001, more that
26.8 million poorest families around the world have been benefited from
micro-finance and most of them are the poor women. The author described that
women empowerment is very important for the socio-economic development in the
poor countries. He suggested that micro-finance organizations should play a
golden role for the poor women in both urban and rural areas. He also suggested
some considerations for the formation of micro-finance :
- The law
should be designed in such a way that it becomes it attractive for the
NGOs to convert themselves into formal financial institutions.
§ A regulatory body
should also be created simultaneously to oversee the operation of the
microfinance banks and to facilitate their activities. Microfinance regulatory
body should be independent from the central bank, but participated by the
central bank. It can be created in the form of a Microfinance Commission.
§ The law may allow
creation of microfinance banks with several options in terms of operational
areas and levels of services. These levels may be defined by geographical
areas, like, sub-districts, districts, provinces etc.
§
In
From the Margin to the Mainstream: Micro-Finance Programmes and Women’s
Empowerment: The Bangladesh Experience, Gita Sabharwal (2001) described about the micro-finance programmes, the
development theory of micro-finance, women’s participation in micro-finance,
their empowerment and development. She said that taking micro-finance many poor
women not only improved their living condition, but also increase their
economic participation in to their family, their knowledge, opinions.
§
International Year of Micro-credit 2005; Building Inclusive
Financial Sectors to Achieve the Millennium Development Goals by United Nations (2005)
underscored the importance of microfinance as an integral part of the
collective effort to meet the Millennium Development Goals. It said that
sustainable access to microfinance helps alleviate poverty by generating
income, creating jobs, allowing children to go to school, enabling families to
obtain health care, and empowering people to make the choices that best serve
their needs. UN demonstrated the impacts of micro-finance in the following way:
- Micro-finance helps poor households to meet their
basic needs and protect against risk.
- The use of financial services by low-income
households leads to improvements in household economic welfare and
enterprise stability and growth.
- By supporting women’s economic participation,
micro-finance empowers women, thereby promoting gender- equity and
improving household and improving household well-being.
- The level of impacts relates to the length of
time clients have had access to financial services.
Journals
§
“Empowering
women through micro-credit”
by Susy Cheston and Lisa Kuhn (2002) discussed that although microfinance does
not address all the barriers to women’s empowerment, microfinance programs,
when properly designed, can make an important contribution to women’s
empowerment. The authors began by examining some of the theories and
assumptions behind the targeting of women for microfinance and the resulting
implications for empowerment. Drawing on the studies and experiences of
microfinance institutions in Africa, Asia, and Latin
America , the paper looks at what evidence is known about impact on
women, in terms of both welfare and empowerment.
§
“South Africa key to Africa's economic upliftment”
by Sapa (2004), said
that Johannesburg - Developing South Africa's financial sector is key to
improving the economy of the entire continent says National Treasury
director-general Lesetja Kganyago. "Although South Africa Africa
fell short of the capital needed to achieve Nepad's goals. "A strong
regional financial centre can help cater to the capital needs of the region,
especially if African entities were a key focus rather than a global
afterthought.
§
“The Coffee
Beans Route Kalkfontein Township , Cape
Town
Unpublished thesis
There have been little investigations
and research on this type activity in Bangladesh
§
A
study of Md. Golam Mostafa (2002) on “Women in urban informal sector and their
activity pattern” – A Case Study of Some Selected Slums in Khulna
Reports
§
Women in the informal sector and their access to
microfinance, the report of ILO (International Labor Organization) (1998)
for the Inter-Parliamentary Union (IPU) Annual Conference, Windhoek , Namibia
- Close
targeting of the neediest borrowers.
§
Decentralized
loan delivery and management systems through intermediary.
§
Institutions
or parallel banking system
§
Group
formation to ensure financial discipline.
The paper also presented the
classification of the mechanisms providing women with access to financial
services. According to the paper the mechanisms may be:
- Social
programmes.
- Intermediary programmes.
- Parallel programmes.
- Poverty-oriented development banks.
- Community revolving loan funds.
- Savings and credit cooperatives and unions.
The paper
also presented the characteristics of the micro-finance institutions. These
are:
- Offering
primarily short-term working-capital loans.
- Having a
turnaround time for loan approval of less than 2 weeks.
- Providing
services close to borrowers' home or work.
- Charging
interest rates significantly above the rate of inflation.
- Having
lower salary levels than financially less viable programmes.
The paper focused that both in side and
out side of the home micro-finances have a positive impact on the livelihood of
poor women.
§
Leading
to higher income that will help women to better perform their reproductive role
as brokers of the health, nutritional, and educational status of other
household members.
§
Increasing
women's employment in micro enterprises and in improving the productivity of
women's income-generating activities.
§
Enhancing
their self-confidence and status within the family as independent producers and
providers of valuable cash resources to the household economy.
1.7
Operational definitions
1.7.1
Micro-finance
Microfinance
is the term used to refer to different methods for giving poor people access to
financial services. Generally, micro-finance is the basic financial services, like finance,
savings and insurance, give poor people an opportunity to borrow, save, invest
and protect their families against risk. It also helps to secure a family’s
food supply, buy medicine and pay for children’s education.
1.7.2
Urban poor women
The urban poor women are those who are
living in unhygienic and low graded habitats in urban areas and can not afford
basic needs of life with their very low income. Basic needs requirements
include food and nutrition, clothing, primary health care, education and
shelter. The specific criteria of the basic needs are as follows—
§
Nutrition:
2122 kilo calories, as minimum requirement
§
Clothing:
At least two sets of clothes
§
Health:
Real access to the primary health care facilities
§
Education:
Access and ability to obtain primary education or vocational training with literacy.
§
Shelter:
An independent room which is strong enough to withstand weather elements and
which provide minimum decent privacy with access to drinking water and toilet
facilities.
1.7.3
Urban informal sector
The informal sector describes economic
activity that takes place outside the formal norms of economic transactions
established by the state and formal business practices but which is not clearly
illegal in itself. Generally, the term applies to small or micro-business that
is the result of individual or family self-employment. It includes the
production and exchange of legal goods and services that involves the lack of
appropriate business permits, violation of zoning codes, failure to report tax
liability, non-compliance with labor regulations governing contracts and work
conditions, and/or the lack of legal guarantees in relations with suppliers and
clients. As such, it is conceptually, methodologically and theoretically
difficult to define in terms of its precise nature, size and significance. There
are two characteristics of the urban informal sector that are worth to mention:
·
In general, firms and workers in the informal sector
do not pay fees or taxes and the administrative procedures are simplified.
· It is
difficult to protect the rights of the agents employed, as the informal- sector
does not always comply with the rule of law.
Informal
activities are the way of doing things, characterized by the following:
·
Ease
of entry
·
Reliance
on indigenous resources
·
Family
ownership of enterprises
·
The
small scale of operation
·
Labour-intensive
and adapted technology;
·
Kills
acquired outside the formal school system
·
Unregulated
and competitive markets.
In
addition to the above characteristics, the following are included:
·
Units
work outside the formal administrative networks that cover the formal sector;
· A relatively low level of capital
requirement.
1.7.4
Self employed
Self
employment is used to refer to subsistence cash-crop or non-cash crop
agricultural activities such as small industries, small business, trade and
commerce, transport and services one carries out on one’s own to produce food
grains and other commodities, goods and services for consumption by the members
of the family or for the markets,
1.7.5
Wage employed
The
term wage employment generally associated with work in exchange for
wages/salaries in cash/kind.
1.7.6
Unpaid family worker
Unpaid
family worker has been used to refer to those women who assist husband/male
family members in their economic work without payment. Sometimes they provide
finished goods for sale by the male members of the households without payment.
In the process, they become invisible producers without any financial or other
benefits directly accruing to themselves.
1.7.7
Slum
In
the respect of this study:
· A slum is predominately an overcrowded
area which is an advance state of decay where dwellings are unfit for human
habitation.
· It is an area where basic amenities like
water supply, drainage for standard living are lacking, unsanitary condition
prevail and diseases flourish.
1.7.8
Economic upliftment
Economic upliftment means the economic
development, economic raise of the people. In this study economic upliftment
has been measured with employment, income, money contribution to family,
savings, insurance, major and valuable resources, living standards etc.
2.1
Introduction
Methodology is the working frame work of
the study which gives a complete idea about how the study was done. To complete
the study, the following sequential activities were performed.
2.2
Selection of the topic
2.3
Selection of the study area
The selected study area is Rishi Para slum in the
Narayangang Pouroshova. Having many industries, manufacturing factories,
garments, port, railway station and well road network and being a part of Dhaka Mega
City
2.4
Data collection
Both primary and secondary data have
collected for the study purpose.
2.4.1
Primary data collection
Primary
data has collected from the field survey through questionnaire survey method.
2.4.1.1 Field Survey
2.4.1.2 Reconnaissance Survey
After selecting the topic, the study
area preparing the working schedule and enlisting data sources, a
reconnaissance survey have conducted in the study area. It will help to gain a
clear idea of the study area and also to make an efficient questionnaire for
the study. In reconnaissance survey attention has given on the different aspects
of the role of the informal sector and their impacts, the socio-economic
conditions of the urban poor women, the role of micro-finance and their impacts
etc.
2.4.1.3Sampling
Sampling is the process of selecting a
subset of individuals from a large group of individuals, the selection being
done with a view to drawing inferences about the larger group on the basis of
information obtained from the subset. The larger group of individuals is known
as population and the subset is known as the sample. The sample design refers
to the technique or the procedure the researcher would adopt in selecting items
for the sample. For this study, the total households of the study area have
used for the sample size determination. First the initial sample size has
determined and then the sample size has determined. The following technique has
used for the present study
2.4.1.4Questionnaire
preparation
After reconnaissance survey and
sampling, a well defined and structured questionnaire has prepared.
2.4.1.5Household survey
Following
types of data have collected from the study area through field survey:
|
Data types
|
Items
|
|
Socio-economic data
|
§
Household
head
§
Family
informations
§
Urban facilities
§
Other facilities
§
Distance of services and facilities from home etc.
|
|
Employment data
|
§
Self
employment
§
Wage
employment
§
Unpaid
family labor
|
|
Informal sector data
|
§
Types
of informal sector activities
§
Women
in informal sector activities
§
Role
of informal sector activities in self-employment, etc.
|
|
Micro-finance data
|
§
Micro-finance
providers
§
Programs
for economic upliftment of micro-finance providers
§
Micro-finance
systems (finance size, interest rate, repayment periods, installments, etc )
§
Women
recipients in micro-finance
|
|
Economic upliftment data
|
§
Overall
change in annual employment
§
Overall
change in annual per income
§
Overall
change in annual per money contribution to their family
§
Overall
change in annual per savings
§
Overall
access to expend in annual major resources
§
Overall
change in annual insurance/life security
§
Overall
change in living standards
|
2.4.2
Secondary data collection
Secondary data has collected from
various secondary data sources like - books, published and unpublished thesis
and researches, newspapers, journals, various active NGOs in relevant works,
Bangladesh Bureau of Statistics (BBS), Government organizations
like-Narayangang Pouroshova, Local Government and Engineering Department-Dhaka
and Narayangang. Following types of data has collected from various sources for
the study:
|
Data types
|
Sources
|
|
· Information of Narayangang Pouroshova
|
·BBS, 2001
|
|
· Map of the study area
|
·Narayangang Pouroshova & LGED,
|
|
·
Involved NGOs in the study area
·
Provided facilities
· Micro-finance
system of the NGOs
|
·NGOs
·Local people
|
|
· Total population data
· Female population data
|
·Local community
|
|
· Others relevant data
|
·Newspapers
·Journals
·Reports
·Unpublished thesis
·Internet, etc.
|
2.5
Data processing & interpretation
After
collecting the primary and secondary data from the field, data processing and
interpretation has completed.
2.6
Data analysis and data presentation
In this stage, all the processed
information and data has analyzed to fulfill the objectives of the study. After
storing all the questionnaire data has grouped, categorized and interpreting
according to the objectives of the study. Here the information has presented in
the form of texts, tables, graphs, maps etc. For processing and analysis
purpose computer data base software like Statistical Package for Social
Scientist (SPSS), MS-Excel, MS-Access, MS- Word has used and for the map
presentation Geographical Information System (GIS) and for presentation purpose
MS-PowerPoint software has used.
2.7
Report final
After analysis and data
presentation, a final report has prepared for its checkout.
2.8
Draft final
Final report prepared and
after its checkout a final draft has prepared. Several drafts were made
prepared for review and study of the supervision. After necessary
accommodations of corrections the final report was prepared and submitted.
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