Saving Preferences and Financial Literacy of Self Help Group Members: A Study of Uttar Pradesh

Abstract

Microfinance is the provision of financial services to the rural and underprivileged sections of the society to engage in income-generating activities for their own growth and progress. This paper examines the income generating activities of Self-Help Groups (SHGs) for empowerment of women. It also analyses the saving preferences of SHG members and examines the financial literacy of these members after joining the SHGs. The analysis reveals that the different types of income generating activities started by SHG members include embroidery work, dairy, flower and bangle making, jute work, stitching work, vegetable cultivation and own shop. Among these, ‘own shop’ is the most prominent income generating activity followed by ‘stitching work’. In terms of saving preference, ‘own business development’ is their first saving preference for sustainable livelihood; ‘education of children’ is their saving preference for future of their children and ‘repairing of house’ is their saving preference for immediate expenditure. The analysis in terms of financial literacy reveals that financial literacy of SHG members regarding ration card, voter card, bank account and their phone number has increased after joining of SHGs.