Social Impact Analysis of Microcredit on Beneficiaries: Findings from Survey of Literature

Indian economy has recently completed 18 years of economic reforms. These economic reforms brought with them the structural transformations and pushed India towards rapid economic growth in terms of rising GDP. It is true that at times, the sluggish growth trends are also observed but the efforts continue in order to make India as one of the fastest growing economies in the world. A significant period of economic reforms was also earmarked by heated discussions and debates regarding need for identifying the importance inclusiveness. It was based on the plea that unless the efforts are made in order to elevate the lives of a significant portion of population that has either no or little access to credit, the holistic growth of the economy cannot be achieved.

With a general consensus on inclusiveness aspect and with the motive of elevating the socioeconomic growth of the economy, initiatives were undertaken so as to include those who somehow have been excluded from formal financial structure. In this direction, a number of studies since then have been conducted that reflected the impact of financial inclusion initiatives on the beneficiaries. Some studies have been directed to microcredit as one of the major financial inclusion initiatives. These studies have pointed out that the social conditions of the microcredit beneficiaries changed after provision of credit. In this direction, the present paper makes an attempt to specify the impact of microcredit on the borrowers on social front.

This paper is analytical in nature. It begins with the objective and the rationale for the study. In the next section, the theoretical perspective has been discussed and elaborated. Further, the paper makes reference to the literature that delineates the social impact of microcredit. The literature specifies the opinions and theoretical arguments on the social impact of microcredit. Thereafter, the Social Impact Analysis (SIA) has been conducted to draw inferences. Finally, the paper ends by a brief conclusion.