Participation in Self-Help Groups and Empowerment of Women: A Structural Model Analysis

Microfinance as a tool for poverty alleviation has attracted much attention especially after Grameen Bank of Bangladesh was awarded the Noble peace prize. Self-help groups (SHGs) in India, which originated during the same time as Grameen Bank, are considered to be an efficient mechanism for delivering microfinance to the poor. Apart from providing economic benefits, participation in SHG also brings for its members social and political empowerment. This paper examines the impact of the level of participation in SHGs on the empowerment (economic, social and political) of women SHG members. The study also investigates the impact of moderating variables, such as socio-economic status, age, and place of residence, on the relationship between the level of participation and empowerment. As we were unable to find suitable scales in the existing literature to measure the level of participation, empowerment (economic, social and political) and socio-economic status, we developed new scales to measure these constructs. Using an interview schedule in a survey method, we interviewed 353 women SHG members from the eastern Indian state of Odisha to collect primary data. Using partial least squares structural equation modeling (PLS-SEM), the study explicates the relationship between level of participation and women empowerment. The findings suggest that an increased level of participation in SHGs results in enhanced economic empowerment of its members by bringing in employment opportunities, higher income, stability in current jobs, and improved entrepreneurial abilities. Besides, higher participation also brings in higher social empowerment of members in the form of decision-making capability in households, access to health care, selfconfidence, heightened self-esteem, communication skills, and the ability to transact with banks and NGOs. In addition, increased participation in SHGs leads to higher political empowerment in the form of higher political participation and better community mobilization. Socio-economic status and place of operation significantly moderate the effect of the level of participation on women (SHG member) empowerment. Insights from this study are helpful for the government and non-government agencies working towards empowering women in developing regions. They may take note of the different indicators of participation and role of the significant moderators while implementing similar programs.