Self Help Group Model: A Strategy for Inclusive...

International Review of Research in Emerging Markets and the Global Economy (IRREM)

An Online International Research Journal (ISSN: 2311-3200)

2017 Vol: 3 Issue: 1

1055 www.globalbizresearch.org

Self Help Group Model: A Strategy for Inclusive Growth

Niranjan Shetty,

Lecturer,

Dept. of Professional Studies Lecturer,

College of Banking and Financial Studies, Oman.

Prakash Pinto,

Professor and Dean,

Dept. of Business Administration,

St. Joseph College of Engineering, India.

_____________________________________________________ Abstract

Availability of suitable financial products or services to the rural mass is one of the criterion

to achieve inclusive growth. This research paper highlights the role of Self Help Groups (SHGs)

in achieving inclusive growth. Three major financial inclusion process indicators (FIPIs) and

four major financial inclusion effectiveness indicators (FIEIs) have been used in the research

to measure the effort of linked banks in providing financial products or services to the SHG

members thereby fostering the inclusive growth. Research has been undertaken in Mangalore

District of Karnataka State in India from 2006 to 2013. A total of 766 SHG members have taken

active participation in the research through a structured schedule. Study has been divided in

to two specific objectives and seven hypotheses. Wilcoxon Signed Ranks, a non-parametric

statistical test has been used to validate the data. Both the indicators (FIPIs and FIEIs) have

shown a weak presence before rural mass joined the SHGs. However, alarmingly all the three

FIPIs have shown a considerable effort of linked banks in providing financial services to the

SHG members after they joined the SHGs. At the same time, effectiveness of the efforts of the

linked banks in offering financial services are also found to be robust in all the four FIEIs

subsequent to joining SHGs by rural mass. Collectively, the FIPIs and FIEIs have shown an

exceptional contribution in extending greater inclusive growth by accelerating the effort of

providing financial services and its effectiveness in the District of Karnataka state in India

through SHG model.

___________________________________________________________________________

Key Words: Financial inclusion, Self Help Group, inclusive growth, financial products &

services





1. Introduction

Inclusive growth is an important agenda of all governments world over. Bringing lower

strata of the people, especially the poor and the destitute into the mainstream of the financial or

growth gamut is referred to as inclusive growth. SHG is a small thrift group consisting 10-12

members in the rural and semi-rural areas who endeavour to save a small amount of money on

weekly or monthly basis and create employment or income opportunities by investing collective

fund raised in the group. This paper tests how far inclusive growth gained momentum through

a constructive effort of linked banks in providing financial services to the SHG members. Three

questions have been raised relating to the provision of financial services offered by the linked

banks to the SHG members, such as; what is level of awareness being created? What is the level

of accessibility? What is the timeliness of the services being offered? Similarly, four questions

being raised pertaining to the effectiveness of financial services offered. It includes; what is the

usage of effectiveness of financial services? What is the level of involvement by the linked

banks? What is the level of quality of the financial services being offered? And finally, what is

the level of fulfilment of the requirements of the SHG members? Hence the purpose of this

research is to find the level of inclusive growth permeated through providing financial services

to the members of the SHGs by answering the seven questions raised above. However, it has

two dimensions: effort in the provision of financial services (three indicators) and the

effectiveness (four indicators) of the same. Research shows, how inclusive growth is achieved

as a result of increased effort in providing financial services and increasing the effectiveness of

the same by the linked banks to the SHG members, who in-turn represent the poor, weaker and

destitute class of the society. Research clearly identified a strong inclusive growth as a result

of linked banks’ efforts in providing financial services to the SHG members and the

effectiveness of the same happened to be robust as well.

2. Literature Review

While offering financial services to the people, it is important that quality of financial

services and the dignity of people are considered (Centre for Financial Inclusion at ACCION

International). One of the major underpinning concerning the non-access of financial services

was the limited geographical access to bank branches as a result of branch closures (Leyshon

and Thrift, 1993). In the year 1999, the word financial exclusion is coined to represent people

who could not access financial services from mainstream providers (Kempson and Whyley,

1999). The major strata of people who have been completely ignored from financial services in

India include, marginal farmers, oral lessees, landless labourers, self-employed, urban slum

dwellers, migrants, ethnic minorities, senior citizens, women and unorganised sector

entrepreneurs (Mohan, 2006). Structural factors such as non-availability of financial services

suiting to the requirements, rigid documentation, and requirements for collateral and cut-throat





competition in financial services contributed to the cause of financial exclusion to a great extent

and thereby by reducing the magnitude of inclusive growth (United Nations, 2006b).

Non-poor individuals, small and medium entrepreneurs are also exposed to difficulties of

accessing financial services. Most of the people from the low-income strata of the society

doesn’t even have access to the basic financial services. Those strata of the people who have

access to finance are either underserved in terms of quality or quantity of financial services and

products. This phenomena is found not just in one or two countries, but found in many countries

(Asian Development Bank, 2007).Lack of financial education and advice is yet another

important reason for being excluded financially. Since the general literacy rate is very low in

India, providing financial awareness is no just a pre-requisite but also equally challenging. The

social exclusion is the further complicating the issue of financial inclusion and this in turn,

blocks the inclusive growth (S. Ramesh & Preeti Sahai, 2007). Formal credit access is a product

of robust economic growth and not a driver of it. This fact has been revealed by the history. In

the past, most businesses began and still begin today with informal financing. Formal financing

is based on the powerful saving and use of those savings as the basis for consumption and not

for enterprise investment (Dichter Thomas W, 2007).

In a study, in South East Asia, it has been found that economic and social well-being of the

poor people has been improved. Continuous innovations at the ground level, rigorous and

continuous evaluation of the effectiveness of microfinance in this regard has been emphasised

and further expressed that this will provide much needed evidences for the effectiveness of

microfinance (Krishnan Bhagirathy Aparna, 2005). Liberalising the financial sectors is very

important to give impetus for greater dynamism, innovation and competitive pressure.

However, strong incentives to banks who provide financial assistance to people should come

from government, which in-turn increase financial inclusion (Ellis Karen, 2007). Seibel Hans

Dieter (2008) has made two observations in study conducted in Indonesia. Firstly, financial

institutions can learn from the best experiences of the highly successful micro finance

strategies. Secondly, financial institutions need to modify if they have to perform more in the

area of providing financial services. This calls for an integrated approach or plan by involving

all the stakeholders concerned in developing a nation thereby providing a full range of financial

services to the needy.

3. Research Hypotheses

To authenticate the research objectives, seven hypotheses have been identified. For each of

the FIPIs and FIEIs one hypothesis has been formulated. First objective consists of three

(awareness, accessibility and timeliness) FIPIs and it has three hypotheses to be tested. Second

objective contains four (usage, involvement, quality and fulfilment) FIEIs and it has four

objectives to be validated.





(1) H0: There is no difference between the level of awareness on financial products or services

before and after joining SHG.

(2) H0: There is no difference between the level of accessibility for the financial products or

services before and after joining SHG.

(3) H0: There is no difference between the timeliness of the financial products or services

offered before and after joining SHG.

(4) H0: There is no difference between the level of usage of financial products or services before

and after joining SHG.

(5) H0: There is no difference between the level of involvement by the financial institutions in

offering the financial products or services before and after joining SHG.

(6) H0: There is no difference between the level of quality of financial products or services

offered before and after joining SHG.

(7) H0: There is no difference between the level of fulfilment of the SHG members before and

after joining SHG.

4. Methodology

4.1 Research objectives

The research has two core objectives. One objective will measure the extent to which

financial products or services are made available to the SHG members using leading financial

inclusion process indicators (FIPIs) so that greater inclusive growth is achieved and the second

objective measures the extent to which financial products and services made available to the

SHG members are effective using leading financial inclusion effectiveness indicators (FIEIs).

1. To find the extent of financial products or services offered by the linked financial institutions

to the SHG members before and after joining SHG to achieve inclusive growth.

2. To find the effectiveness of financial products or services offered by the linked financial

institutions to the SHG members before and after joining SHG to achieve inclusive growth.

4.2 Sample unit, size and techniques

SKDRDP and NGVCT are the two leading NGOs of Karnataka State in India. SHG

members of these two institutions are the sample subjects for this research work. Both the

institutions are not only pioneer in the field of permeating financial services to the SHGs in the

state, but also in the entire country. Sample subjects are selected from the whole district using

disproportionate random sampling method. The district has been divided into five taluks and

subjects are picked from all the five taluks. The sample size is determined based on the formula,

s = X2 N P (1 - P) ÷ d2 (N - 1) + X2 P (1 - P), (Robert V. Krejcie - University of Minnesota,

Duluth and Daryle W. Morgan, - Texas A. & M. University, 1970). A sample of 766 SHG

members out of a total population of 312287 is selected. Further the sample of 766 SHG

members is selected from a sample of 748 SHGs out of a total population of 30388 SHGs. The





significance of this study goes for clearly identifying three financial inclusion Process

indicators (FIPIs) and four financial inclusion effectiveness indicators (FIEIs). This is a two-

dimensional study as compared to others with three and four research questions being attached

to the first (effort in provision of financial services) and the second (effectiveness of the efforts)

dimensions respectively. Further the indicators used for the efforts in the provision of financial

services and the measurement of their effectiveness have been well discussed in the literature

review by past researchers. The data is from the SHG members who have been benefited from

the banks and the qualitative views of the SHG members have been measured using Likert

scale. The qualitative data collected in the form of Likert scale has been supplemented with

direct interviews. The information is sourced from the original point and hence information is

highly reliable. The Likert scale has been used to measure the opinions of the respondents as

the data is in ordinal in nature. Since Likert scale is used to measure the ordinal data, Non-

parametric test is used to analyse the data. Among the major techniques such as Mann-Whitney

U test, Wilcoxon signed-rank test, Kruskal-Wallis test etc. the second method, Wilcoxon

signed-rank test is used.

4.3 Research scope and limitations

Only the SHG members of SKDRDP and NGVCT has been considered for sample and their

respective linked banks in the district of Karnataka State. Study completely ignored the minor

share of other NGOs in the district. Study also ignores SHG members of Shree Shakthi, a

government sponsored SHG group in the state. Similarly, study has not been confined to the

SHGs that are not linked to any of the banks, may be cooperative or national banks. But such

SHGs are actively present in the district. SHGs operating outside the district but actively

performing irrespective whether linked or not linked however has been excluded from the

current study for the simple reason that the present study is limited to the scope of the district.

Hence it may carry any specific limitation to the study, but only limits the scope. The sample

size is determined based on the formula shown in section 4.2 and any inherent limitation in the

formula might pass to the research. Only those members who availed financial services on or

subsequent to 1st April 2006 are considered for the purpose of this research. Members who

availed financial services prior to this date are not part of this research. However, the members

who have joined prior to 1st April 2006 but availed financial services after 1st April 2006 are

considered for the purpose this research.

5. Empirical Analysis and Results

5.1 Hypotheses 1 to 3 (objective 1)

Hypotheses 1 to 3 have been tested to validate objective 1. It provides statistical backup to

answer objective 1. The first objective of the research is to measure the extent of provision of

financial products or services by the linked financial institutions to the SHG members before





and after joining the SHGs. Three hypotheses covers three variables of FIPIs such as awareness,

accessibility and timeliness. It considers based on the three variables, whether the financial

institutions created sufficient awareness of financial products or services being offered to the

SHG members? Whether the financial institutions have made the financial services accessible

to the SHG members? And finally whether the financial products or services are made available

timely to the SHG members? All the three hypotheses have been tested using Wilcoxon Signed

Ranks Test (Non Parametric). Table-1 and table-2 shows the measurement of FIPIs before and

after joining the SHGs respectively. It can be seen in table-1 that values are fully centred on the

left hand side of the table indicating a weak financial inclusion before joining SHGs

emphasising a lower inclusive growth efforts. The reason is; factors favourable to FIPIs are

either disagreed or strongly disagreed by majority of the respondents before joining SHGs. On

the other hand, in table-2 values are more fully centred on the right hand side of the table

indicating a strong financial inclusion after joining SHGs emphasising a higher inclusive

growth efforts. This is because; factors favourable to FIPIs are either agreed or strongly greed

by majority respondents after joining SHGs. However, though it is apparent from the raw data

that inclusive growth is achieved by providing more robust financial services after joining

SHGs, it has to be validated through hypothesis.

5.2 Hypothesis 1 (objective 1)

Since the objective 1 uses Liker Scale, non-parametric test statistics has been applied.

Wilcoxon Signed Ranks Test for paired statements of the respondents on awareness indicators

relating to hypothesis 1 is shown in table-3. It shows the positive ranks, negative ranks and ties

for each pair of statements before and after joining SHGs. The positive ranks for all the five

pairs of statements before and after joining SHGs are far higher than the negative ranks

indicating a greater financial inclusion and inclusive growth due to joining of SHGs. Positive

ranks indicate that who are aware of financial products or services after joining SHGs were not

aware of the same before joining the SHGs.

Table1: Financial Inclusion Process Indicators (FIPIs) before joining SHGs

# Statements #

&

%

Strongly

Disagree

Disagree Neither

Agree nor

Disagree

Agree Strongly

Agree

Total

1 2 3 4 5

1

Awareness indicator # 389 245 33 57 42 766

% 51 32 4 7 6 100

2

Accessibility indicator # 223 368 30 67 78 766

% 29 48 4 9 10 100

3

# 143 124 306 98 95 766





Timeliness indicator % 19 16 40 13 12 100

Source: Compiled by the researcher through primary research

Similarly, Negative ranks represents those respondents who have not saved after joining the

SHGs but were saving before joining SHGs. This section of the respondents are the blocks to

the achievement of greater financial inclusion and the inclusive growth.

Table 2: Financial Inclusion Process Indicators (FIPIs) after joining SHGs

# Statements #

&

%

Strongly

Disagree

Disagree Neither

Agree nor

Disagree

Agree Strongly

Agree

Total

1 2 3 4 5

1 Awareness indicator # 0 0 0 406 360 766

% 0 0 0 53 47 100

2 Accessibility indicator # 15 24 22 216 489 766

% 2 3 3 28 64 100

3 Timeliness indicator # 4 9 2 130 621 766

% 0.5 1 05 17 81 100


The ties indicate those respondents who are aware of financial products after joining SHGs

were also aware of the same even before joining the SHGs. Therefore ties doesn’t not contribute

to have greater financial inclusion or inclusive growth as a result of joining SHGs. Positive

ranks are far higher than the negative ranks and the ties. Conclusively, majority of the

respondents who are aware of the financial products and services after joining the SHGs were

not aware of the same. Hence, due to the higher value of positive ranks; financial inclusion and

as a result inclusive growth said to be strong as a result of people joining SHGs.

Table 3: Wilcoxon Signed Ranks relating to hypothesis 1 - Non Parametric

N Mean Rank Sum of Ranks

My linked bank has communicated about the

various financial services available in the

bank to me - I was fully aware of various

financial products or services offered by the

financial institutions

Negative Ranks 32a 43.00 1376.00

Positive Ranks 716b 389.32 278750.00

Ties 18c

Total 766

My linked bank has given sufficient

information about the various financial

services available in the bank to me - I was

fully aware of various financial products or

services offered by the financial institutions

Negative Ranks 27d 39.50 1066.50

Positive Ranks 716e 384.54 275329.50

Ties 23f

Total 766

My linked bank has provided sufficient

materials about the various financial services

available in the bank to me - I was fully

aware of various financial products or


Negative Ranks 13g 24.50 318.50

Positive Ranks 674h 350.16 236009.50

Ties 79i

Total 766

Negative Ranks 13j 25.50 331.50





My linked bank has provided sufficient

training about the various financial services

available in the bank to me - I was fully

aware of various financial products or


Positive Ranks 676k 351.14 237373.50

Ties 77l

Total 766

My linked bank has motivated me about the

various financial services available in the

bank - I was fully aware of various financial

products or services offered by the financial

institutions

Negative Ranks 13m 25.50 331.50

Positive Ranks 676n 351.14 237373.50

Ties 77o

Total 766a


The test statistics for all pairs of statements on awareness indicators required for hypothesis 1

in before joining and after joining SHGs are represented in table-4. It shows the Z value and

the asymptotic significance for each pair of statements for proving hypothesis 1. Similarly

Wilcoxon Signed Ranks Test for paired statements of accessibility indicator and timeliness

indicator linked to hypotheses 2 and 3 of research objective 1 and the Z value and the asymptotic

significance for each pair of statements of the same have been calculated. However, due to

space constraint it has not been shown.

5.3 Result for hypothesis 1 (objective 1)

Since the asymptotic values for all 5 paired statements of Z values is 0 and it is less than 0.05

at 95% level of confidence, the null hypothesis (H0) is rejected and the alternative hypothesis

(H1) is accepted (see table-4).

Table 4: Paired sample test for hypothesis 1 - Non Parametric Test - Statisticsa

Z Asymp. Sig.

(2-tailed)

My linked bank has communicated about the various financial services available in

the bank to me - I was fully aware of various financial products or services offered

by the financial institutions -23.842b .000

My linked bank has given sufficient information about the various financial services

available in the bank to me - I was fully aware of various financial products or

services offered by the financial institutions -23.818b .000

My linked bank has provided sufficient materials about the various financial services


services offered by the financial institutions -23.075b .000

My linked bank has provided sufficient training about the various financial services



-23.057b .000

My linked bank has motivated me about the various financial services available in

the bank - I was fully aware of various financial products or services offered by the

financial institutions

-23.061b .000

Source: Compiled by the researcher through primary research a. Wilcoxon Signed Ranks Test b. Based on negative ranks

This implies that there is a difference in the level of awareness on financial products or

services offered before joining SHGs and after joining SHGs to the members and as a result

there found to be considerable increase in the effort of providing financial services to achieve





greater inclusive growth after joining the SHGs. With this result of hypothesis 1, the first part

(variable) of research objective 1 is answered and the research concludes there is an inclusive

growth as a result of financial provision to the SHG members. However, the other two

components (two variables of accessibility and timeliness and the corresponding hypotheses, 2

and 3) of the research objective 1 have to be complied with to conclude on objective 1.

5.4 Hypotheses 2 and 3 (objective 1)

The nature of testing hypotheses 2 and 3 are also in line with hypothesis 1 and both the

hypotheses compliment the research objective 1. Table-1 to table-4 contains the data generated

during testing hypothesis 1. In addition, it includes descriptive statistics, such as mean, standard

deviation, percentiles, mini-maxi etc. But descriptive statistics are not shown due to space

constraint. But both the sets of data (descriptive and test statistics) have been preserved by the

researcher. Accessibility and timeliness indicators too when put on similar test generated equal

quantum of data (as shown in table-1 to table-4). But only the final interpretation of the data is

shown. The results of these two hypotheses have been aligned to deduce objective 1.

5.5 Results for hypotheses 2 and 3 (objective 1)

In case of hypothesis 2, since the asymptotic values for all 5 paired statements of Z values

is 0 and it is less than 0.05 at 95% level of confidence, the null hypothesis (H0) is rejected and

the alternative hypothesis (H1) is accepted. This implies there is a difference in the level of

accessibility of financial products or services offered by the linked financial institutions to the

SHG members before and after joining SHGs and as a result there found to be sufficient effort

in provisioning financial services to the SHG members after joining the SHGs and to achieve

inclusive growth. In case of hypothesis 3 too, since the asymptotic values for all 5 paired

statements of Z values is 0 and it is less than 0.05 at 95% level of confidence, the null hypothesis

(H0) is rejected and the alternative hypothesis (H1) is accepted. This implies there is a difference

in the level of timeliness of financial products or services offered before and after joining SHGs

and as a result there found to be a considerable effort shown in providing financial services to

the SHG members after joining the SHG thereby fostering inclusive growth. With this result of

hypotheses 1, 2 and 3, research objective 1 has been fully complied. In all the three (1, 2, and

3), null hypotheses rejected and the alternative hypotheses have been accepted. It indicated

there is inclusive growth as a result of increased provision of financial services or products to

the SHG members after they join the group. SHG members have revealed a strong attempt or

effort of the linked financial institutions in providing financial services or products to the

members of the SHG once they join the group. However, it should not be taken to mean there

is robust growth in the provision of financial services offered. It only indicates the process being

created in terms of awareness, accessibility and timeliness.






Hypotheses 4 to 7 have been tested to validate objective 2. It provides statistical backup to

answer objective 2. The second objective of the research is to measure the effectiveness of

provision of financial products or services by the linked financial institutions to the SHG

members before and after joining the SHGs. Four hypotheses covers four variables of FIEIs

such as usage, involvement, quality and fulfilment. It considers based on the four variables,

whether members use the financial products on regular or frequent basis? Whether the financial

institutions involve completely in providing financial services to the SHG members? Whether

the quality of the financial services provided to the SHG members are good? And finally,

whether the SHG members have fulfilled their required purpose after joining SHG? All the four

hypotheses have been tested using Wilcoxon Signed Ranks Test (Non Parametric). Table-5 and

table-6 shows the measurement of FIEIs before and after joining the SHGs respectively.

Table 5: Financial Inclusion Effectiveness Indicators (FIEIs) before joining SHGs

# Statements #

&

%

Strongly

Disagree

Disagree Neither

Agree nor

Disagree

Agree Strongly

Agree

Total

1 2 3 4 5

1

Usage

indicator

# 419 179 13 43 112 766

% 55 23 2 5 15 100

2

Involvement indicator # 398 196 15 63 94 766

% 52 26 2 8 12 100

3

Quality

indicator

# 419 130 21 78 118 766

% 55 17 3 10 15 100

4

Fulfilment indicator # 504 108 42 43 69 766

% 66 14 5 6 9 100


It can be seen in table-5 that values are fully centred on the left hand side of the table

indicating a weak financial inclusion before joining SHGs emphasising a lower inclusive

growth efforts. The reason is; factors favourable to FIEIs are either disagreed or strongly

disagreed by majority of the respondents before joining SHGs. On the other hand, in table-6

values are more fully centred on the right hand side of the table except one indicator i.e. ‘usage’

indicating a strong financial inclusion after joining SHGs emphasising a higher inclusive

growth efforts. This is because; factors favourable to FIEIs are either agreed or strongly (except

usage indicator) agreed by majority respondents after joining SHGs. However, though it is

apparent from the raw data that inclusive growth is achieved by providing more robust financial

services effectively after joining SHGs, the same has to be validated through hypothesis. In





case of usage indicator, SHG members are not familiar with using the financial products or

services on regular basis. The usage frequency is found to be very low even after joining the

SHGs.

5.7 Hypothesis 4 (objective 2)

As the objective 2 uses Liker Scale, non-parametric test statistics has been applied.

Wilcoxon Signed Ranks Test for paired statements of the respondents on usage indicators

relating to hypothesis 4 is shown in table-7. It shows the positive ranks, negative ranks and ties

for each pair of statements before and after joining SHGs. The negative ranks and ties for all

the five pairs of statements of usage indicator before and after joining SHGs are far higher than

the positive ranks indicating a weaker financial inclusion and inclusive growth due to joining

of SHGs. Negative ranks indicate those SHG members not using financial services after joining

SHGs were using the same before joining SHGs. Similarly ties indicate those SHG members

using financial products or services after joining SHGs were also using the same before joining

the SHGs.

Table 6: Financial Inclusion Effectiveness Indicators (FIEIs) after joining SHGs

# Statements #

&

%

Strongly

Disagree

Disagree Neither

Agree nor

Disagree

Agree Strongly

Agree

Total

1 2 3 4 5

1 Usage indicator # 416 330 12 2 6 766

% 54 43 1.5 0.5 1 100

2 Involvement

indicator

# 0 0 0 60 706 766

% 0 0 0 8 92 100

3 Quality

indicator

# 0 0 0 0 766 766

% 0 0 0 0 100 100

4 Fulfilment

indicator

# 0 0 0 0 766 766

% 0 0 0 0 100 100


Therefore negative ranks and ties have hindered the permeation of financial inclusion thereby

achieving greater inclusive growth. Out of four FIEIs only usage indicator has resulted in lesser

financial services provision to the SHG members thereby curbing the extent of inclusive

growth. The remaining three FIEIs have shown a positive move towards the provision of

financial services indicating a stronger impetus for inclusive growth. The negative ranks and

ties are far higher than the positive ranks in case of usage indicator. Conclusively, majority of

the respondents who are not using the financial product products and services after joining the

SHGs were also not using the same. Hence, due to the higher value of negative ranks and ties;





financial inclusion and as a result inclusive growth said to be weak though people joined SHGs.

The test statistics for all pairs of statements of usage indicators required for hypothesis 4 before

and after joining SHGs are represented in table-8. It shows the Z value and the asymptotic

significance for each pair of statements for proving hypothesis 4. Similarly Wilcoxon Signed

Ranks Test for paired statements of involvement indicator, quality indicator and fulfilment

indicator linked to hypotheses 5, 6 and 7 of research objective 2 and the Z value and the

asymptotic significance for each pair of statements of the same have been calculated. However,

due to space constraint it has not been shown.

Table 7: Wilcoxon Signed Ranks relating to hypothesis 4 - Non Parametric

N Mean Rank Sum of Ranks

I know to use various plastic cards given by

the bank such as swiping/debiting/crediting

- The financial products or services offered

by the financial institutions were frequently

used by me

Negative Ranks 195a 385.20 75114.50

Positive Ranks 361b 220.86 79731.50

Ties 210c

Total 766

The terms or documents used in the bank is

understandable or user-friendly - The


financial institutions were frequently used

by me

Negative Ranks 237d 276.41 65509.50

Positive Ranks 187e 131.50 24590.50

Ties 342f

Total 766

I know to process the bank requirement on

my own such as documents and rules - The


financial institutions were frequently used

by me

Negative Ranks 273g 321.41 87745.00

Positive Ranks 232h 172.50 40020.00

Ties 261i

Total 766

Mobile or telephonic services are being

offered to me - The financial products or


were frequently used by me

Negative Ranks 307j 239.33 73474.00

Positive Ranks 111k 127.00 14097.00

Ties 348l

Total 766

Regular visits are required to avail the

linked bank services - The financial

products or services offered by the financial

institutions were frequently used by me

Negative Ranks 328m 231.66 75983.50

Positive Ranks 89n 125.50 11169.50

Ties 349o

Total 766






5.8 Result for hypothesis 4 (objective 2)

Since the asymptotic values for four paired statements of Z values is 0 and it is less than

0.05 at 95% level of confidence out of five paired statements, the null hypothesis (H0) is rejected

and the alternative hypothesis (H1) is accepted. This implies that there is a difference in the

level of usage of the financial products or services offered before and after joining SHGs and

as a result there found to be a financial inclusion and inclusive growth. However, one paired

statement has asymptotic value more than 0, but when considered as a whole (five paired

statements), this result can be ignored as it is the only component of usage out of 5 pairs.

Table 8: Paired sample test for hypothesis 4 - Non Parametric Test - Statisticsa

Z Asymp. Sig. (2-

tailed)

I know to use various plastic cards given by the bank such as

swiping/debiting/crediting - The financial products or services offered by the

financial institutions were frequently used by me -.626b .532

The terms or documents used in the bank is understandable or user-friendly - The

financial products or services offered by the financial institutions were frequently

used by me -8.363c .000

I know to process the bank requirement on my own such as documents and rules -

The financial products or services offered by the financial institutions were

frequently used by me -7.586c .000

Mobile or telephonic services are being offered to me - The financial products or

services offered by the financial institutions were frequently used by me -12.375c .000

Regular visits are required to avail the linked bank services - The financial products

or services offered by the financial institutions were frequently used by me -13.550c .000

Source: Compiled by the researcher through primary research a. Wilcoxon Signed Ranks Test b. based on negative ranks c. based on positive ranks

On an overall basis, though the raw data signifies lesser inclusive growth through provision

of financial services, statistically when all the five sub indicators of usage are considered, the

asymptotic vale for only one sub indicator found to be higher than 0.05. Hence when applied

the principle of average, there said to be good usage of financial services by the SHG members

after joining the SHGs. With this result of hypothesis 4, the first part (variable) of research

objective 2 is answered and the research concludes that there is an inclusive growth as a result

of provision of financial services to the SHG members. However, the other three components

(three variables of involvement, quality and fulfilment and the corresponding hypotheses 5, 6

and 7) of the research objective 2 have to be complied with to conclude on objective 2.


Hypotheses 5, 6 and 7 are tested on the same manner how prior hypotheses have been tested

and all the three hypotheses compliment research objective 2. Table-5 to table-8 contains the

data generated during testing hypothesis 4. In addition, it includes descriptive statistics, such as

mean, standard deviation, percentiles, mini-maxi etc. But due space constraints descriptive





statistics have not been shown. But both the sets of data (descriptive and test statistics) have

been preserved by the researcher. Involvement, quality and fulfilment indicators when put

under similar test, they too generate equal quantum of data (as shown in table-4 to table-8). But

only the final interpretation of the data is given. The results of these three hypotheses have been

aligned to deduce objective 2.

5.10 Results for hypotheses 5 to 7 (objective 2)

In case of hypothesis 5, since the asymptotic values for all 5 paired statements of Z values

is 0 and it is less than 0.05 at 95% level of confidence, the null hypothesis (H0) is rejected and

the alternative hypothesis (H1) is accepted. This implies that there is a difference in the level of

involvement of the related parties (financial institutions) in offering financial products or

services before and after joining SHGs and as a result there found to be a greater inclusive

growth. The change in the level of financial inclusion measured in terms involvement by the

financial institutions found to be grater or positive. In case of hypothesis 6, since the asymptotic

values for all 5 paired statements of Z values is 0 and it less than 0.05 at 95% level of

confidence, the null hypothesis (H0) is rejected and the alternative hypothesis (H1) is accepted.

This implies that there is a difference in the level of quality of financial products and services

offered to the SHG members before and after joining SHGs and as a result there found to be a

greater inclusive growth by providing financial services to the rural mass. The change in the

level of providing financial inclusion is found to be grater or positive. In case of hypothesis 7

too, the asymptotic values for all 5 paired statements of Z values is 0 and it less than 0.05 at

95% level of confidence, the null hypothesis (H0) is rejected and the alternative hypothesis (H1)

is accepted. This implies that there is a difference in the level of fulfilment of goals of the SHG

members due to financial inclusion before and after joining SHGs and as a result there found

to be a greater financial inclusion and inclusive growth. The change in the level of financial

inclusion or fulfilment is found to be grater or positive. With this result of hypotheses 4, 5, 6

and 7, research objective 2 has been fully complied with. In all the four (4, 5, 6, and 7), null

hypotheses rejected and the alternative hypotheses have been accepted. It indicated that there

is an inclusive growth as a result of increased effectiveness in the provision of financial services

or products to the SHG members after they join the group as indicated by three variables such

as usage, involvement, quality and fulfilment. SHG members have revealed a strong attempt or

effort of the linked financial institutions effectiveness in providing financial services or

products to the members of the SHGs once they join the group. However, it should not be taken

to mean there is robust growth in the provision of financial services or products offered. It only

indicates the effectiveness of process being created in terms of four indicators (usage,

involvement, quality and fulfilment).





6. Findings

The major findings of the two broad objectives placed in section 4.1 are; firstly, the three

major indicators of inclusive growth expressed in terms of provision of financial services

(FIPIs) such as awareness, accessibility and timeliness have been absolutely non-prevalent and

highly prevalent before and after joining the SHGs respectively. Before joining the SHGs,

members were not exposed to these three indicators. They were unware of financial services,

inaccessible to financial services and untimely received limited financial products or services.

Once they joined the SHGs, there is a massive change in the level of awareness, accessibility

and timeliness in offering financial services to the SHG members. Financial institutions linked

to the SHGs have shown a considerably amount of interest in extending the financial services

to the rural mass through SHG model. This effort in turn contributed to the government’s drive

on inclusive growth. SHG members are not only made aware of financial products and services,

but also they are enabled to access various financial products and services. Similarly, financial

services or products are made available in the right time whenever required by the SHG

members. In other words, SHG members are not made to wait for a long period to avail financial

services or members are not pressed to undergo complex procedural compliances. This finding

is different from earlier studies in a way that earlier studies highlighted the reasons for lack of

awareness, inaccessibility and untimely provision of financial services. Whereas this finding

measured the extent to which three indicators are achieved before and after joining SHGs using

a qualitative scaling and disproportionate random sampling method in order achieve inclusive

growth.

Secondly, the four major indicators of inclusive growth expressed in terms of effectiveness

of provision of financial services (FIEIs) such as usage, involvement, quality and fulfilment

have been non-prevalent and highly prevalent before and after joining the SHGs respectively.

Before joining the SHGs, members were not exposed to these four indicators. The SHG

members neither frequently used financial services nor even banking personnel involved in the

process of delivering financial services to the members. In addition SHG members were not

exposed to quality financial services or products and their requirements of life have not been

fulfilled. Once the members joined SHGs, there is a drastic change in the level of four

effectiveness indicators of financial services or products such as usage, involvement, quality

and fulfilment. Financial institutions linked to the SHGs have shown a considerably amount of

effectiveness in delivering the financial services to the poor people through SHG model.

However, the usage indicator was not robust like other three indicators. But still, there was an

incremental change in the frequency of using financial products before and after joining SHG.

This change results in the speed of attaining inclusive growth through the offer of financial

services or products. SHG members were not only just offered the financial products and





services, but also offered those products and services more effectively. Though SHG members

were infrequently using banking products, most of them are happy about the involvement of

banking personnel in delivering the financial services. Further, SHG members have shown

complete happiness towards the quality of financial products or services being offered and they

emphasised that their requirements of life have been fulfilled by joining SHG. This finding is

different from earlier studies in the sense that effectiveness have been measured in two different

periods, i.e. before and after joining SHGs. And it concludes effectiveness is drastic after

members joined the SHGs. However, other studies doesn’t compare the effectiveness of

offering financial services before and after joining SHG. The present finding measures the

extent to which four indicators are effective in extending financial services before and after

joining SHGs using a qualitative scaling and disproportionate random sampling method in order

achieve inclusive growth.

Past studies have not studied the extent and effectiveness of specific indicators of financial

product or services as in the present study to draw conclusions on inclusive growth. This could

be seen in the literature review section. Studies shown the causes and the variables of financial

exclusion but doesn’t really state the dimension. The findings of this research may become a

success story for banks, NGOs, SHGs, and Micro finance institutions to draw implications or

policies not only in India, but also world over.

7. Conclusion

The revelation of this research is different from those mentioned in prior studies and

contributes uniquely to the existing body of literature. Firstly, all the sub-indicators of the three

main FIPIs have shown a complete favourable view towards the efforts of linked banks in

providing financial services to the SHG members there by accentuating greater inclusive

growth once the rural mass joined the SHGs. But prior to joining SHGs, efforts of linked banks

in providing financial services was very low. Secondly, the sub-indicators of the all the four

major FIEIs have also shown a sheer favourable view towards the attainment of inclusive

growth. However, ‘usage’ one of the four FIEIs found to be weak (plastic cards such as

debit/credit cards). Effectively, except one indicators (usage) out of the seven indicators of the

efforts of financial service provision and the effectiveness of the same found to highly

prompting towards achieving greater inclusive growth. Neither the break-up of two-dimension

nor even the break-up financial inclusion before and after joining the SHGs have been provided

by earlier studies. Past studies centred on pointing out the reasons for the same. The findings

will raise further questions and impetus for additional research as to the strategies to be followed

to reach the rural mass. This can be passed on to other countries or NGOs as best practice. Only

seven indicators of providing financial products and services have been focussed in the study

for measuring effort and effectiveness of the efforts of linked banks. Additional research may





be taken up focusing on other indicators that are pointed out in the literature reviews of financial

inclusion or inclusive growth areas.

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