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International Conference on Rural Finance Research: Moving Results - page 3 / 9





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this void by applying the recently released state and district data to empirically explore the spatial evolution and distribution of the development of the microfinance sector in India through the example of SHGs. Mapping analysis is an excellent tool to visualize the spatial distribution and evolution of microfinanciarization in India, and with which to initiate debate.

More specifically, in order to examine the spatial distribution and variation of SHGs, picture maps for selected years are employed and plotted using Arc View GIS, which is linked with the main database for this study.

Following common practice (Nabard various years, Daley-Harris 2005), the number of households linked to one SHG is set at seventeen, corresponding to the average group-size. We use the total number of SHGs linked by formal agencies (commercial banks, regional rural banks and cooperatives) during each financial year. We also calculate the coefficient of variation, a measure of relative variation, to provide a view of the variation relative to the size of the data measurements.

With these data at hand, two yardsticks are employed in the analysis: the relative strength of households in SHGs measured by the ratio of households in SHGs to total state and district households; and, the pace of change in SHGs measured by the percentage change in the total number of SHGs over the given period.

Relative Strength of the SHGs among States

The ratio of the number of SHG members to the total households of the states reveals a different, although continuing, pattern in regional variations as compared to the relative strength of the SHGs. In March 2001, there were less than ninety households participating in SHGs for every 1,000 of Andhra Pradesh’s households. In the states Sikkim, Assam and Punjab, however, there were six, five, and three households participating in SHGs for every 10,000 of the total households respectively. The irregular pattern continued in 2003 and 2005. Nevertheless, the relative strength of the SHGs slightly converged among states, as evidenced in the decline of the coefficient of variation from 1.99 in 2001 to 1.15 in 2006 - a spatial pattern that is confirmed by inspecting the related maps in Figure 1.


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