Research by Dr Garikipati identifies that microfinance benefits women most when they use it to enhance their livelihoods and participate in the local economy. It also shows that over 80% of the micro-loans in rural India did not meet these conditions. Using these findings in collaboration with the Department for Rural Development, she developed the Livelihood Enhancement Programme (LEP), which was rolled out in the state of Andhra Pradesh from 2009 onwards. She is now working with NABARD, the apex rural bank of India, to integrate LEP into the offerings of microfinance institutions at the country level. National implementation is expected to impact existing clients plus around five million women annually.
Microfinance is a popular pro-poor policy intervention in several developing countries. Its main modality is to extend small loans to women with the intention that they create self-employment opportunities. Earning their own incomes is expected to enhance women’s confidence and status. Microfinance has experienced tremendous growth over the last two decades. With over 65 million women beneficiaries, India continues to lead the microfinance movement. However, the culture surrounding microfinance was mainly focused on loan repayments, irrespective of how repayments are made. Little attention was paid to how loans are used and even less to whether loans are used to enhance women’s and their household’s livelihoods.
Drawing on extensive fieldwork in India, Dr Garikipati carried out a stream of research consisting of several projects at Liverpool between 2003 and 2019. Research insights include identifying that microfinance has a beneficial impact on women when used to enhance their livelihoods and that more emphasis needs to be placed on livelihood activities that enhance the value of women’s time and improve their participation in the local economy. Finally, the impact of microfinance on women’s livelihoods can be understood better by studying the ‘processes’ women engage in as a result of the loans.
Using her research and its policy related messages, Dr Garikipati actively lobbied practitioners and policy makers in the state of Andhra Pradesh for changes to the loan disbursement procedures to poor, rural women. These efforts resulted in the introduction of the Livelihood Enhancement Programme (LEP) as part of the loan application process, which explicitly links disbursement of loans to enhancement of livelihoods. It captures the existing profile of the village and helps identify livelihood opportunities in the local enterprise economy. Starting in 2009, LEP was rolled out across the state of Andhra Pradesh benefiting over 50,000 new microfinance clients every year.
Dr Garikipati is now collaborating with NABARD – the apex rural bank of India – to constructively develop a livelihood component based on LEP for its web-based microfinance data sharing platform called E-Shakti. The collaboration so far indicated that E-Shakti can accommodate a livelihood component successfully and with some additional work the integration into the digital interface will be completed for a full rollout. The national rollout of E-Shakti will make it possible for the potential benefits of the livelihood component to reach women microcredit clients across all of India's 29 states and seven Union Territories. Once the rollout is completed, the estimated beneficiaries are existing clients plus over five million every additional year who join the microfinance programme across India.
Dr Supriya Garikipati
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