A financial maturity model for the empowerment of women’s saving groups

Abstract

Women's microfinance groups are increasingly recognized as a space for empowerment, access to financial and social capital, and personal growth. However, few studies have attempted to evaluate these groups' performance, as evidenced by the lack of adequate instruments to measure their success. This study proposes and tests a financial maturity model (FMM) for assessing and monitoring women's groups' performance and supporting effective intervention design. The proposed FMM was conceived based on applicable theoretical and operational frameworks for women's groups. Three groups of grassroots stakeholders validated and ranked the FMM constructs in terms of their importance. A sample of 31 Self-Help Groups in rural India was utilized to test the applicability of the FMM. One of the most important findings relates to the necessity of enhancing the loan management capabilities of groups, including loan repayment, identification of defaulters, delinquency ratio, risk management, and financial reporting. These results can provide stakeholders with baseline measures for designing and implementing interventions to improve the performance and sustainability of women's groups, as well as testing the efficacy of these interventions. While FMM was developed in the Indian context with 7 million registered groups, it has the potential to be adapted in other international contexts to inform decision-making in low- and middle-income countries where women's economic groups are promoted for socioeconomic empowerment and poverty reduction.