Microfinance interventions and enhanced capabilities: creating the inevitable connect among indigenous people at a village in gujarat, india

Denis, Litty (2019). 'Microfinance interventions and enhanced capabilities: creating the inevitable connect among indigenous people at a village in Gujarat, India' Paper presented at the annual conference of the HDCA 2019, London, UK.



Background: Marginalisation and deprivation of indigenous people is graded and many layered. The tribal regions have been subject to many a type of coercions. Sometimes development agenda does not respect the achievements of people and therefore plans and policies fail to address the freedom of the indigenous in terms of what Sen would like to put forward. This has further led to manifold deprivations like that of land and property entitlement, political and social freedoms. Ultimately leading to greater levels of poverty and inequality. The microfinance movement helped this phenomenon to a large extent in the South Asian region. The capability approach (CA) (Sen, 1984) is an important lens to review what microfinance has been able to do for the indigenous people in a tiny tribal village of Gujarat, India. The present paper examines socio-economic impact of microfinance (MF) on the indigenous people and initiatives in enhancing capabilities among these indigenous people. Credit creates economic power, which quickly translates into social power. When credit institutions and banks make rules that favour a distinct section of the population, that section increases both its economic and its social status. Banks often reject poor as unworthy of credit and because of this, banks have imposed a financial apartheid and gotten away with it (Yunus, 1999). Therefore, the role of microcredit assumes great significance in creating plausible capabilities. Institutions play a vital role in connecting capabilities and enhancing the freedoms available to a developing society (Drèze and Sen, 2002). In the light of this, it would be pertinent to check whether indigenous residents from a village in a developing country like India have been benefitted and enhanced the dimensions listed in Nussbaum’s central list of functional capabilities (2000).

Methodology: The paper dwells upon both primary as well as secondary study. Secondary data was collected from books, journals and reports for reviewing the literature and facts about tribal areas of Gujarat, India and developing the conceptual framework. The primary data was collected from tribal people residing in a village at Narmada district in Gujarat, India. The district is adjoining forest area and inhabited with tribal population. The population density in Narmada is quite low 210 and has a population of 5,90,297. The district has a sex ratio of 961which is quite good compared to other districts in Gujarat. Focus group discussions were done in the village. The main objective being to find out if microfinance has enhanced capabilities among the tribal people. The results were later collated and analysed.

The basic research questions were to find out:

  • Does microfinance lead to improved socio and economic functionings in terms of Capability Approach (CA)?
  • Does microfinance generated functioning lead to freedom or development in terms of CA?
  • Role of institutions in connecting capabilities in the village?

Findings: The findings from the study suggest that the tribe in this village has benefitted from their association with the non-government organisation (NGO) providing them MF and various other interventions primarily on towards improving their health and strengthen their economic condition giving them freedom to make choices. Access to finance has enabled them to send their children for higher education; where ironically most of the respondents have hardly been to high school. Apart from the microfinance institutions, Christian missionary institutions have played a significant role in connecting capabilities by educating these tribes as per the requirements of the mainstream, providing them more opportunities for livelihood in the near-by towns instead of migrating to far off cities. They are now better equipped to meet any health crisis in the family or among the community members. There is a strong feeling that the social capital has enhanced due mobilisation of collectives with a common vision. There is improvement in not only incomes and savings but also in other skillsets like managing loan groups and co-ordinating livelihood opportunities like handicrafts and other works done in groups. There are issues of land entitlement as the village is adjoining forest. But many of them still depend on agriculture as their main livelihood. Many in the village have to migrate to neighbouring villages or far off cities for better livelihood opportunities, a scenario which is gradually changing due to opportunities which can be created in the village itself due to microfinance. The significant freedom attained is in terms of political awareness and awareness of their rights and entitlements and above all the spirit to protest for these entitlements in the region. A large majority of them see their next generation doing something different from what this generation has been pursuing. Also, most of them agree that their capabilities have enhanced due to the microfinance interventions.

Key words: Capability Approach; Tribal Gujarat; Microfinance; Connecting Capabilities; Indigenous

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