Evaluating the Economic Impact of Bank Finance on Self-Help Group Members – A Comparative Study of Punjab & Haryana

Abstract

This study examines the economic impact of bank-linked financing on members of Self-Help Groups (SHGs) under the SHG–Bank Linkage Programme in the states of Punjab and Haryana. The research aims to evaluate how access to formal bank credit influences income generation, savings behavior, employment opportunities, business participation, and overall economic stability among SHG members. A mixed-method research design was adopted, combining quantitative and qualitative approaches. Primary data were collected from 500 respondents through structured questionnaires, interviews, and focus group discussions, while secondary data were obtained from NABARD reports, government publications, and scholarly literature. The study employed descriptive statistics and Chi-Square tests to analyze the relationship between bank finance and economic empowerment indicators. The findings reveal that bank-linked financing has significantly improved the economic condition of SHG members in both states. A majority of respondents reported higher income levels, increased savings capacity, better employment opportunities, enhanced business involvement, and improved financial stability after receiving bank finance. The Chi-Square results indicated statistically significant associations between bank finance and all major economic variables. Haryana demonstrated relatively stronger outcomes in employment generation and entrepreneurship compared to Punjab. The study concludes that bank-linked financing is an effective mechanism for promoting financial inclusion, women’s empowerment, poverty reduction, and sustainable rural economic development.