Effect of women's self-help group participation on their financial inclusion measured through a women-centric index: A study in North-East India

Abstract

This study attempts to examine the effect of women's participation in self-help groups (SHGs) on their financial inclusion levels. A comprehensive financial inclusion index is created specifically suited to women by incorporating the concept of ‘autonomy’ in the usage of financial services. Adding this indicator with access and usage improves the practical effectiveness of women's financial inclusion as a means to a larger end. Further, objective weights have been assigned to the financial inclusion indicators through the application of the Criteria Importance through Inter-criteria Correlation (CRITIC) method. The effect estimation is examined using propensity score matching (PSM) to gauge a true effect assessment free from self-selection bias. The results are also checked for robustness using inverse probability weighted regression adjustment (IPWRA). Drawing primary data from 450 respondents from the Barak Valley region of Assam, the study establishes the importance of ‘autonomy’ in determining women's financial inclusion and finds SHG participation to be effective in enhancing the holistic financial inclusion of women. Underscoring the potential of SHGs in the upliftment of women, the study recommends regular monitoring of existing SHGs, besides expansion policies, to prevent group inactivity. To enhance women's financial autonomy, it is also suggested to conduct frequent training programmes on rights awareness, boosting self-efficacy for financial management and self-sufficiency in addressing financial challenges.