This paper assesses the distributional implications of the world’s largest-ever government operated micro-finance programme and examines the suitability of the Self Help Group (SHG)–micro-enterprise framework towards effective income generation and poverty alleviation. The statistical analysis indicates that while internal savings and group corpus have a positive and significant effect on the income growth of beneficiaries, bank credit does not have any such impact. The results also highlight that the socially and economically forward regions are more likely to benefit from this programme. This has policy implications towards effective governance of government operated micro-finance initiatives in developing nations.
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