Can Microfinance Promote Livelihoods and Reduce Vulnerability Among Adivasis? A Study of Some NGO Interventions from Karnataka and Tamil Nadu

Abstract

To what extent have NGO microfinance programmes for adivasi households promoted livelihoods and reduced poverty and vulnerability among them? This question is analysed with the help of primary data collected from Karnataka and Tamil Nadu states. Although adivasi households have joined microfinance groups, made small savings and availed credit facility, microfinance activities have not significantly improved livelihoods and reduced vulnerability. In the absence of savings products to meet expenses on housing and marriage, and access to formal social security services such as health insurance, adivasis are forced to borrow from informal sources. This places them into inextricable debt traps, undoing whatever positive impact that microfinance programmes may have. To avoid such a situation, meaningful savings products and access to social security are needed.