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Introduction

The “vicious cycle” of gender inequality, poverty, and malnutrition is an intergenerational trap where social marginalization limits a woman’s economic capacity, leading to household poverty and subsequent nutritional deficiencies. Microfinancing through Self-Help Groups (SHGs) acts as a circuit breaker by injecting capital into the hands of women, who statistically prioritize health and nutrition over other expenditures.

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Breaking the Cycle: Mechanisms and Examples

• Economic Empowerment: Microloans enable women to start nano-enterprises, reducing dependency on seasonal labor and increasing household “disposable income.”
  Eg: The Lakhpati Didi initiative (DAY-NRLM) has already empowered over 1.48 crore women (as of June 2025) to earn at least ₹1 lakh annually.
• Nutritional Security: Higher income in women’s hands directly correlates with improved dietary diversity and child health.
  Eg: In Maharashtra, the MAVIM project links SHG loans to “kitchen gardens” and poultry, significantly lowering stunting rates among children.
• Decision-Making Agency: Financial independence shifts power dynamics within the family, allowing women to advocate for their health and their children’s education.
  Eg: The Kudumbashree model in Kerala has shown that 90% of SHG members report increased participation in household financial decisions.
• Social Capital: SHGs serve as platforms for awareness regarding sanitation and reproductive health, tackling the “ignorance” aspect of malnutrition.
  Eg: The Jeevika mission in Bihar utilizes “Health & Nutrition Sakhis” to drive behavior change at the community level.

Associated Challenges

• Regional Disparity: SHG penetration remains low in Northern and North-Eastern regions (approx. 6% each) compared to the South and East (30% each).
• Over-indebtedness: Multiple borrowing from different Microfinance Institutions (MFIs) can lead to a “debt trap” rather than asset creation.
• Digital Divide: While Bank Sakhis bridge the gap, many rural women still lack the digital literacy required for modern fintech platforms.
• Societal Pushback: In highly patriarchal pockets, male family members may control the loan amount, essentially using women as “fronts” for credit.

Conclusion

Microfinancing is a necessary but not sufficient tool. To truly break the cycle, it must be integrated with skill-upgradation and market linkages (like the SARAS melas). Moving forward, the focus should shift from “credit access” to “value-chain integration,” ensuring that women-led SHGs transition from survivalist units to sustainable rural businesses, thereby securing long-term nutritional and social equity.

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