Study On Role of Bandhan Bank Microfinance in Women Entrepreneurship With Reference To Gorakhpur Region

Study on Role of Bandhan Bank Microfinance in Women Entrepreneurship with Reference
to Gorakhpur Region
Study on Role of Bandhan Bank Microfinance in Women

Entrepreneurship with Reference to Gorakhpur Region
Vishal singha Ugrasenb
aMBA student, bAssistant Professor, Centre for Management Studies,
Madan Mohan Malaviya university of technology, Gorakhpur, Uttar Pradesh
ARTICLEINFO ABSTRACT
Keywords: Concept of microfinance is emerged in order to meet
Microfinance ,women the goal of empowerment of women, specially related
entrepreneurship, to low-income and weaker section of society.
social and economic Microfinance plays an important role in order to
upliftment, financial provide an entrepreneurial option for women, who are
inclusion, financial socially disadvantaged and economically exploited for
security their social and economic upliftment.
Microfinance is increasingly being considered as one of
the most effective tools of reducing poverty and
increasing financial inclusion. Mr. Chandra Shekhar
Ghosh founded Bandhan financial services limited in
the year 2001, in order to provide loans to weaker
section of society, those who have not able to get the
loans from traditional banking services. Women have
also rights of good health, financial security, access of
education and other opportunities and for that,
microfinance has helped women to achieve these all
rights in order to improve quality of their life in both
economic and social settings.
And through this paper, efforts have been made to
know the role of Bandhan bank microfinance in
women empowerment through women
entrepreneurship in Gorakhpur region, to know about
the purpose of taking loans, what is the changes in the
women’s socio-economic settings and to know about
loopholes in these process and for reducing these all
drawbacks what corrective measures should be taken
with reference to future prospective in order to
improve the process of microfinance in Gorakhpur
region.
Introduction to Microfinance
Micro finance by self-helping group act as a modern tool to fight poverty for the
development of rural as well urban India. Microfinance or also known as micro-
credit is a financial service that focuses on meeting financial needs of population that
are financially underserved, these are individuals who usually lack the credit or
resources to secure a loan and are unlikely to get approval from traditional banks. It
is a financial service that offers loans, savings and insurance to entrepreneurs and
small business owners who does not have access to traditional sources of capital, like
Available on SSRN-Elsevier
689
Electronic copy available at: https://ssrn.com/abstract=3309292

to Gorakhpur Region
banks or investors. microfinancing is available through MFIs. They offer small loans
and help to set and maintain a savings account.
The study aims to understand the concept of Microfinance and Microfinance
institutions and its impact on financial inclusion with special focus on poverty
alleviation and women empowerment through with the help of entrepreneurship in
India. A Micro Finance Institution is an organization that acts as an interface
between the formal credit delivery institutions and credit seekers, with an aim to
assist for the socio-economic development of poor and marginalized people.
Need for Microfinance

The main thrust of Bandhan microfinance is social upliftment and to empower the
women through women entrepreneurship who are socially disadvantaged and
economically exploited.
Women Entrepreneurship
Women entrepreneur is defined as “a women or group of who initiate, organize and
run a business enterprise. Entrepreneur is person who is visualizer, creator,
innovator, decision maker, risk taker and leader. He/she is actively engaged in
seeking change by engaging opportunities. An enterprise owned and administrative
by a women entrepreneur with a minimum financial interest is 51% in share capital is
termed is women entrepreneurship. Basically, Entrepreneurship refers to the act of
setting up a new business so as to take advantages from new opportunities.
Current Status of Women Entrepreneurs in India
Unfortunately, women do not get as many facilities as the man do. They are
discriminated and underprivileged. In spite all the efforts of government as well as
non-government they have been the most overlooked client by financial sector. In
recent time microfinance has emerged as a major tool for the upliftment of women
mainly rural women. Both informal as well as formal sector of finance such as
commercial banks are taking active part in providing facilities of microfinance to
rural women. Women are taking active part in getting themselves availed of different
facilities of microfinance.
Challenges Faced by Women Entrepreneurs
 Lack of finance
 Conflicts between work and domestic commitments
 Gender gaps in education
 Social barriers
 Legal constraints in family law
 Heavy and large house hold responsibilities
 Lack of family support
 Lack of capital
 Lack of confidence and faith
Rural Development Through Microfinance
 It is unable to attain sustainable development without the rural development.
women form the main part in attaining sustainable development. It is
important to empower women for the progress of a country. Rural women
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to Gorakhpur Region
form the main part in the development of women. Development of rural

women leads to development of a country. India has a total population of
about 6.40 lacs villages and most part of population is living in rural areas.
Most of the female population lives in rural India. The majority of rural
women lives in rural India forms the category of being below poverty lines. So
rural poverty can mean the feminization of poverty. The segment of rural
India forms the backbone of Indian economy. To empower a rural India it is
important to empower its rural population. Government is providing aid in
rural development by providing facilities like self-help group. Self-help group
are taking help of microfinance in providing facilities to rural women. Helping
women through self-help group by microfinance is a new innovation in the
field of development.
 Bandhan microfinance focuses and serving the under banked and
underpenetrated markets and it help to make the country’s economic growth
more inclusive.
 Its focus on the under banked and under penetrated markets allows and also
helps to meet certain regulatory requirements. The RBI requires (1.) that
banks locate at least 25% of their banking outlets in unbanked rural areas (2.)
that at least 40% of all lending be made to priority sectors, which includes
micro loans.
 Bandhan sense the opportunity and focuses on these segments (PSL or rural
areas) not because of regulatory compulsion but as a business strategy and
they continuously work upon it.
Range of Microloans Provided by Bandhan Bank Microfinance,
Gorakhpur Branch in Order to Promote Women Entrepreneurship
SUCHANA
Minimum loan amount: Rs 1,000
Maximum loan amount: Rs 25,000
Loan tenure: Up to 1 year
Rate of interest per annum: 18.80%
 Dedicated doorstep service canter (DSC) to service the needs of customers.
 Simplified documentation for hassle free loan processing.
 Use of house held devices (HHDs) with biometric authentication at doorsteps
to speed up transaction time
 Timely disbursement
SRISHTI
Maximum loan amount: Rs 1,50,000
SURAKSHA
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to Gorakhpur Region
It is designed to meet stress- free support for medical emergencies with Bandhan
bank’s suraksha loan that is committed to help you with timely support when you
need it the most. As an existing microloan customer, you can now access funds
conveniently at your doorsteps to support your family’s emergency health needs
without any stress.
SUSHIKSHA
It is designed with purpose to ensure your children’s education with Bandhan bank’s
sushiksha loan that helps you ensure their bright future. You can access funds
conveniently at your doorsteps and enable your children to continue study
uninterrupted.
Rate of interest per annum:10.52%
Review of Literature
Soumali bose (2015) studied that micro-finance schemes of Bandhan microfinance
helped to alleviate poverty at larger scale. Microfinance also act as an effective
approach for financial inclusion program. Mayank Tiwari and komaljeet kaur (2018)
analysed that Empowerment of women is a key factor to eradicate poverty as women
are the major contributor to the national income. Financial assistance is required to
make these poor and dependent women as emerging entrepreneurs. union
government, state governments, self-help groups, industrial organisations, micro-
banks, nationalized banks, non-banking financial companies are providing financial
support schemes to poor section of society. Women empowerment includes in its
ambit the respect social, political, economic, and psychological aspects which are
urgent requirement of modern society. Women have become more confident and
stable with microfinance through SHGs but several MFIs are charging exorbitant rate
of interest to the poor people which is required to checked and controlled. Jagtap
(2017) studied that the Bandhan bank focuses on Eastern India as banking
penetration is still poor in the region but at the same time want to expand their loan
portfolio by increasing lending funds to retail business and Micro and Small Medium
Enterprises. Micro finance institutions are basically established with the objective of
providing financial facilities to the needy and weaker sections of the society. They
helped the government to get rid of poverty and achieve economic development of
the country and Bandhan is playing a key role to achieve these objectives. In India
the government should focus to examine the structure of microfinance schemes and
suggest some recommendation for the proper functioning of MFIs.
Research Objectives
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to Gorakhpur Region
 To study the role of microfinance in empowering women through women

entrepreneurship.
 To know about the purpose of taking microloan from microfinance
institutions in Gorakhpur region.
 To study the impact of microfinance on financial inclusion with special focus
on poverty alleviation.
 To know and study about the categories and the suitability of microloans
provided by Bandhan Microfinance, Gorakhpur Branch.
Research Methodology
Research Design-Descriptive Study
Sampling Method- Non-Probability, Convenience Sampling.
Data Collection- Primary Data Through Questionnaire and Secondary Data from
various sources like research papers, case studies, internet websites, articles, journals
etc. various studies on this subject have also been referred in this study and also
Various information provided by Bandhan bank Gorakhpur branch and their
doorstep service centres (DSCs) is considered. Through Questionnaire, I have
collected my primary data among 150 women who shows their interest in micro
loans in Gorakhpur.
Findings and Observations
Based on my questionnaire, from secondary data, Bandhan bank microfinance
Employees, various journals, article and others associated topics, these are the
findings and observations.
 It is found that the main occupation of 33.33% women is labour work.
 It is found that 33.63% poor women is earn below or equal Rs. 4500, therefor
they need microfinance in order to generate extra income through
entrepreneurship options.
 Women are mostly aware of micro credit facility.
 35.33% women come to know about microfinance through the advertisements
and awareness program by MFIs and 36% from their friends too.
 Most of cases women are helped by their friends to get avail of micro finance.
 It is found that 90% of the women agree that microfinance have helped to
improve their overall socio-economic status.
 About 55 percent women agree that they are satisfied with the interest rate of
loans.
 About 90 percent women think that micro finance helped them to generate
extra income, and it is helpful for their family.
 It is found that 34.44% women have loan amount about in between Rs. 30 to
40 thousand.
 Duration of most of the loan is up to 2 years.
 It is found that 75.56% of the women agree that in case of non repayment of
loan of any member in a group, guarantor would repay their repayment.
 Most of the women are satisfied with the grievance handling mechanism of
micro finance services.
 It is found that 90% of the women agree that microfinance has helped in
poverty reduction and helps to promote women entrepreneurship.
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to Gorakhpur Region
 Till FY 18 its customer base in microfinance is 10.6 million while in FY17 its
customer base in microfinance is 9.08 million in all over India, which also
shows its progressive improvement in direction of achievement of financial
inclusion.
 Bandhan’s commitment to financial inclusion is also reflected from the fact
that it offered loans to 1386976 new borrowers in FY 17-18. The growth of over
30% in the aggregate micro-banking asset portfolio from Rupees 21,418 crore
to Rupees 27,670 crore during FY 2017-18, is another indicator of Bandhan’s
commitment.
Suggestions
Basic literacy, education and business Training programmes to the women can be
provided for the better performance of their business activities and for the
enhancement of understanding capacity which empowers the group members. Since
the repayment of loan among the members of the self help groups is quick; therefore,
the banks may reduce the rate of interest on such a loan. Should open branches and
doorstep service Centres (DSCs) to grow customer base for microloans.
Develop more and more products and services that actively suits to poor people.
Should continuously work in order to enhance digital and technology platform to
drive customer satisfaction, customer retention and reduce costs. This will also help
to reduce lending rate. The Government may announce presentations and awards to
the best Performing group at the district and state level. I found that that near 15% of
women would not use their loan amount for actual purpose for which they have
taken, so there should be a control mechanism by the Micro Finance Institutions to
control this.
Government should organize trade fairs and create environment to promote the work
of women entrepreneurs in the rural areas, as well as urban area.
At present, the repayment period of loan starts within one weeks from the date of
disbursement of loan, my suggestion is that the repayment should not be started till
3 months. In this period, the borrower should establish their business completely
and after that they repay their loan easily in weekly mode.
Conclusion
 Bandhan microfinance is playing an important role in order to provide and
Promote entrepreneurship option for women in Gorakhpur region.
 Bandhan Microfinance loans and its productive utilization found to be having
a profound role and impact on women empowerment through women
entrepreneurship.
 Micro finance is accepted a key mantra for attaining and maintaining the
sustained and long term economic growth in all over world.
 Bandhan microfinance is playing a vital role to perform financial inclusion in
Gorakhpur, it is also helpful in order to generate leadership quality.
 Bandhan microfinance is playing a key role in order to remove poverty or
taking efforts for poverty alleviation.
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to Gorakhpur Region
 Bandhan microfinancing is playing a pivotal role in order to uplift the socially

disadvantaged and economically exploited women in Gorakhpur region.
 Bandhan Micro finance is capable of helping the poor to upscale themselves to
a better living standard.
 Bandhan microfinance is also helping to reduce the gender discrimination and
enhance the women decision-making process.
 At last I want to say that there is still some untouched remote areas where the
requirement of finance is more and services are not yet reached. Government
should support more to these MFIs in order to need and fulfilment of capital is
possible as they required.
Limitation of Study
The limitation of my study is restricted to two door step service centres (DSCs) of
Gorakhpur district. As the area of study needs more enquiry and project study should
be spread over entire Gorakhpur district specially in more remote areas.
References
Soumali Bose (2015). Microfinance for poverty alleviation and women empowerment: A case
study of Bandhan. International journal of applied research (IJAR )2015.
Mayank Tiwari and Komaljeet Kaur (2018). Microfinance and Its Impact on Women
Empowerment. 11th international conference on research in science, technology and
management, Osmania university, Hyderabad.
Sakshi Verma and Khushboo Aggarwal (2014). Financial Inclusion through Microfinance
Institutions in India. international journal of innovative research and
development(IJIRD), volume 3, issue 1, January, 2014.
Manisha Vikas Jagtap (2017). Transformation from Micro Financing Unit to Bank: Case
Study of Bandhan, Kolkata. International journal of advanced research(IJAR),2017.
P.Bhargavi (2015). Micro Finance and Empowerment of Women Entrepreneurship in India.
International Journal of Multidisciplinary Advanced Research Trends, Volume Ii,
Issue 2(3), 2015.
Pashmeen Kaur (2015), Microfinance – An Emerging Financial Instrument of Financial
Inclusion for Social Upliftment and to Eradicate Poverty: A Case Study Based
approach. IOSR Journal of Business and Management (IOSR-JBM).
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Study On Role of Bandhan Bank Microfinance in Women Entrepreneurship With Reference To Gorakhpur Region

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Study On Role of Bandhan Bank Microfinance in Women Entrepreneurship With Reference To Gorakhpur Region

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Study on Role of Bandhan Bank Microfinance in Women Entrepreneurship with Reference

Study on Role of Bandhan Bank Microfinance in Women

Madan Mohan Malaviya university of technology, Gorakhpur, Uttar Pradesh

Electronic copy available at: https://ssrn.com/abstract=3309292

Need for Microfinance

Electronic copy available at: https://ssrn.com/abstract=3309292

form the main part in the development of women. Development of rural

Electronic copy available at: https://ssrn.com/abstract=3309292

Electronic copy available at: https://ssrn.com/abstract=3309292

 To study the role of microfinance in empowering women through women

Electronic copy available at: https://ssrn.com/abstract=3309292

Electronic copy available at: https://ssrn.com/abstract=3309292

 Bandhan microfinancing is playing a pivotal role in order to uplift the socially

Electronic copy available at: https://ssrn.com/abstract=3309292

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