STUDY ON OBSTACLES IN THE PATHWAY OF STARTING AND OPERATING MFIs ESPECIALLY SHGs IN INDIA

Abstract

In India, most of them live in the countryside and are engaged in odd jobs. Due to the lack of employment in rural areas, people are migrating to metropolitan areas. Microcredit serves those who are often overlooked in society such as women and the disabled. Microcredit cannot exist without microfinance institutions.     In India microfinance operates through two channels:1. SHG – Bank Linkage Programme (SBLP) 2. Micro Finance Institutions (MFIs). The aim of the present study is to find out the obstacles in the pathway of SHG members in starting, operating, and promoting their businesses. As such a study requires in-depth exploration of SHG member’s conditions, their experiences and the problems they face in operating their business so researcher adopt a qualitative methodology to address the research agenda. The researcher concludes that at the very initial stage SHG members get support from the government in terms of getting guidance about how SHG scheme works and how SHG scheme works but still they face problems due to strict social norms that do not allow them to work beyond the boundaries for their home. Also, psychological issues like lack of confidence, lack of communication skills possess problems in their way. At operational stage training related problems and chances of falling into debt due to frauds and high competition in the market are the biggest problems for them. But major comes at promotional stage and this stage is important because failure at this point will put members in huge losses. SHG members face trouble in selling what they have produce because as per today’s trend they are not able to market products like through online platforms.