Role of Microfinance in Economic Wellbeing of Women in Rural Area: A Study Based on Kudumbashree in Vazhikkadavu Panchayat, Malappuram District, Kerala

Abstract

Microfinance can be understood as a banking service that makes micro credits available to people with low income. It offers opportunities to underprivileged sections to become self-sufficient by supporting small savings and microcredit access. This study examines the role of microfinance, specifically through the Kudumbashree program, in enhancing the economic wellbeing of rural women in Vazhikkadavu Panchayat, Malappuram District, Kerala. Using a structured questionnaire administered to 50 randomly selected Kudumbashree members, the research gathered primary data on income, household expenditure, entrepreneurial activities, and perceptions of empowerment. Secondary data from published studies, official reports, and recent literature complemented the findings. Results reveal that while most respondents experienced slight to moderate increases in income and household expenditure, significant improvements were less frequent. The majority engaged in savings and microcredit utilization, with notable participation in agriculture and small business ventures. However, challenges such as lack of training and inadequate institutional support persisted, limiting the potential for transformative economic change. The study emphasizes the critical role of education and occupation as factors influencing economic outcomes. It concludes that Kudumbashree has positively impacted women's financial stability and empowerment, although scope remains for enhanced support mechanisms. Policy recommendations include scaling up capacity-building programs, improving access to diversified financial services, and strengthening linkages with markets and digital platforms. Future research with larger samples, control groups, and longitudinal analysis is necessary to assess long-term effects comprehensively. The findings contribute to understanding how microfinance can serve as an effective instrument for women’s socio-economic development in rural India.