Track: Information/Data Literacy for Informed Policy Decisions

How Financial Literacy impacts Financial Inclusion among SHGs

in Handicraft sector in India?
By
Nishi Malhotra
Ph.D. (Scholar) – Finance, Accounting and Control, IIM Kozhikode
nishim13fpm@[Link]
919873145005

&
Dr Pankaj Baag
Assistant Professor (Finance, Accounting & Control) – IIM Kozhikode
baagpankaj@[Link]
Abstract

India is home to art and art forms of several different categories and these art forms provide
the identity and further cement the regional social context, norms and cultures. Handicraft of
a place is also important for the economy of the place. Social Capital is embedded within the
institute of handiworks and it aims at furthering the positive impact through Value investing
and impact investing. Microfinance has emerged as a missing link between the poor people
and formal finance. In order to combat these challenges, this study aims at exploring the
impact of financial literacy and gender inclusion on performance of the groups. In this
study mixed approach, comprising of both Qualitative and Quantitative methodology have
been used for the purpose of analysis. Quantitative methodology involves the use of
Regression methodology and Qualitative analysis involves the use of Grounded Theory
approach. The analysis of data establishes that literacy leads to increase in the income of the
members of the group and there exists a gender disparity among rural women however more
and more rural women have been financially included. Moreover, the COVID period has a
negative impact on the performance of Handicraft sector in India. This study will be of high
relevance to the policy makers and the bankers in domain of Microfinance.

Keywords: Microfinance, Financial Inclusion, Gender disparity

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[Link]

Handicraft is considered as a source of financial and economic prosperity for rural

economies. This industry is credited with helping to boost the rural economy and creating
jobs. This sector has a sustainable business strategy that employs millions. Various analyses
estimate that this effort employs 7 to 200 million craftsmen. Phulkari and Bagh textiles of
Punjab, Papier mache from Jammu and Kashmir, Chikankari and Zardozi from Uttar Pradesh,
Blue pottery and Block printing from Rajasthan, Ajrak kites in Gujarat, Gond paintings in
Madhya Pradesh, Terracotta products and Worli art in Maharashtra are only a few examples
of the 3,000 art forms that support the small-scale handicraft industry. Despite government
attempts, artisans in India confront problems such as lack of funding, limited technological
penetration, lack of market, and slow institutional growth. This research examines the
influence of various financial inclusion initiatives on the income of craftsmen. The Indian
government has established many initiatives to address these issues. Studying the problems
affecting India's handcraft sector.

[Link] sector of India

Handicraft was for the first time by the judgement of Honourable Supreme of India in Louis
Shoppe case as anything made by hand and graced with visual appeal in nature of
ornamentation and inlay works. Later on, same definition has been revised as “Item or
product produced through skills that are manual, with or without mechanical or electrical or
other processes, which appeals to the eye, due to the characteristics of being artistic or
aesthetic or creative or ethnic or being representative of cultural or religious or social
symbols or practices, whether traditional or contemporary. These items or products may or
may not have a functional utility and can be used as a decorative item or gift”.

Handicraft of a country is a kaleidoscope that provides glimpse into the life of the people. As
one traverses through the panorama of shades and colours of Indian culture and artifacts,
Indian handicrafts speaks volume of the rich culture of India. India has vast and rich heritage
that percolates down from the several civilizations. From geometrical motifs in primitive art
form found in different states of India to frescoes and building sculptures, that narrate story of
glorified culture of India. The grand history of such a vast country like India is marred with
several different art forms which include metal, metallurgy, terracotta, animal figurines and
motifs. The culture and language changes within every 3 kilometres in India, and each place

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clings on to its past glory tenaciously through its norms, cultures and artifacts. Be it beautiful
intricate Bidri works of Bahamani Sultan or the cane and bamboo work of Tripura, the twist
carpets of Thana Gazi, Indian handicraft has won acclaim from people all over the world.
From coir fibres, door hangings and art of Kerala, soft toys, embroidery of West Bengal,
filigree jewels and engraved works, they showcase to the world the skill and craftsmanship of
Indian artisans. Despite, world acclaim much of the India art is dying and the artisans are
finding it difficult to market their products. Most of these handicraft units are run by the
small group of women, who are often organized as the Self-help groups and these groups are
finding it difficult to sustain themselves due to lack of finance and market linkages.

The handicraft sector in India is unstructured, and most handicraft units in India are operated
by long-time patrons. The stories and narratives in a region's handicraft reveal the people's
life, habits, and conventions. India's past is littered with cultural upheavals and
transformations. Due to tradition, most handicraft units are managed by long-time customers
and their families. This industry has long contributed to the nation's economic growth and
development. This industry is said to have significant promise for policymakers and
economic progress. Culture and art styles shift every 2 to 3 kilometres in India, providing a
common thread throughout ethnicities. To help the Indian handicraft sector expand, the
Indian government established the concept of clustering, where numerous tiny firms are
joined together. The Indian government has also created the idea of Geographic Indications to
safeguard India's heritage and art. India has around 1,152 geographical tags and indicators.
Since 1984, the Indian government has established Export Promotion Councils to encourage
small-scale foreign trade. For a long time, these troops and artisan base were uncompetitive.
To this purpose, the Indian government has created market connections. Because of these
organisations' success, the Indian government has created numerous market connections and
technology-based interfaces to build information symmetry and promote these small and
medium companies' products. With so much social capital entrenched in this intervention, the
handicraft and handloom sector is poised for significant change. In terms of exports, the
industry has grown from 386.57 crores in 1986-87 to 25,270.14 crores in 2019-20. Various
studies state that over 7 million individuals work in handcraft and related industries. The
USA (United States of America) receives the most exports, followed by the UK, UAE, and
Germany.

Many sources state that the Indian handicraft market is fiercely competitive, with competitors
including the Philippines, Thailand, Taiwan, and Korea. This industry allows rural India to

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compete. India has also adopted RFID tags. Handicraft agency not only creates jobs but also
promotes Indian talent and economic progress. Despite all attempts, selling Indian handicrafts
remains difficult. It has become a significant marketing platform for Indian handicrafts.
Wooden, stitched, and crocheted products dominate commerce, followed by handprinted
fabrics and art materials.

The growth of the handicraft industry has enabled the effective development of the economy
and preservation of national heritage. The Ministry of Government of India protects and
develops these areas. As a source of sustainable livelihood, this sector has helped to promote
the expansion of handicraft sector. The state of Uttar Pradesh accounts for 65% of rural
handlooms and 46% of rural population in India.

Ambedkar Hast Shilp Vikas Yojana

Handicraft has truly played the role of an enabler in the economic growth in this nation. This
sector is fraught with various challenges such as lack of infrastructure, technology and
capacity. This scheme is launched with the objective of mobilising artisans in the form of
self-help groups and cultural societies to facilitate production in large quantity and ensure
procurement of raw materials at an affordable cost. Social intermediation is a major part in
this scheme which include trainings, design workshops, training on newer schemes and
development of contemporary markets and market linkages.

Association scheme for Handicrafts (ASHA)

This scheme aims to bring entrepreneur and artisans in the handicraft sector under the ambit
of a single scheme. It aims at providing extensive financial support to the artisans in
handicraft sector and envisages one time support and assistance to the artisans.

Hathkargha Sam Vardhan Sahayata (HSS)

According to this scheme, the Government aims to provide looms/accessories to the weavers
to enhance the income and earnings of the members through enhanced productivity and
quality of handloom product. The Government of India provides support 90% of the cost of
loom/accessory to be borne by the Government of India.

[Link] in Handicraft industry in India

Handicraft sector in India has immense potential and economic and social significance for the
Indian economy. Geographic clusters in form of Handicraft clusters have emerged that ensure

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the protection of the local art form and the improving the employment scenario in the
economy. Enchanting handicrafts of India, incisive and intricate craftsmanship of the artisans
mesmerize the connoisseurs of art from all over the world. Despite the fame and precious
craftsmanship, many art forms are dying in the hinterlands of India due to lack of
handholding and access to finance. This paper seeks to explore the impact of financial
literacy and gender empowerment on the rural economy and performance of the Handicraft
clusters.

Various constraints facing the handicraft sector are mentioned below:

(1) Lack of access to credit

(2) Lack of empowerment
(3) Inadequate supply of raw material & manpower
(4) Lack of access to markets

Lack of access to credit: The major factor behind the constraint facing handicraft industry is
the lack of access to credit. Experience has demonstrated that poor people in rural India have
to depend on informal sources of finance which include money lenders, friends and relatives.
Biggest thrust of policy makers is to financially include the marginalized poor in order to
promote economic growth and achieve poverty reduction.

Market Linkages: The demand for the handicrafts depends on the market linkages which
include access to the markets. Poor and marginalized section of society are unable to access
th e markets due to the limited market size. To grapple with this issue there is a need for
better market linkages

High state of decentralization: The other major issue facing the small and unorganized sector
is high state of decentralization. Most of handicraft units are small and unorganized and they
do not have adequate bargaining power or negotiation skills

Lack of adequate manpower and raw materials: In case of small artisans and handicraft units,
there is lack of adequate raw material supply in the market. Dependence on external factors
has led to the issue of unsustainability and financial instability.

4. Research Objectives

The literature lack in terms of sufficient evidence regarding impact of literacy and gender on
financial inclusion. This study aims to empirically validate the findings of the theory of

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financial inclusion, Expectancy theory that financial literacy leads to better income and
performance of the handicraft units. It aims to validate that financial literacy and gender leads
to financial inclusion. To expand the frontier of research, study aims to explore the impact of
temporal factors such as month of the year on income of the handicraft units.

[Link] Framework

Expectancy Theory

Expectancy theory proposed by Victor Vroom of Yale School of Management, 1994 stated
that the human behaviour is an outcome of three factors Expectancy, Instrumentality and
Valency. Expectancy as a factor states that a certain type of behaviour leads to a specific
outcome. The theory states that individuals undergo to make choices, which leads to
behaviour. The theory of choice here means the choice undertake literacy or illiteracy. Within
the ambit of this theory, instrumentality refers to the causality between utility preconceived
and the financial performance of the results achieved.

Resource Based View (RBV)

According to this theory, a company's competitive edge is determined by its tangible and
intangible resources. Corporates will have to use their intangible resources to gain
competitive advantage. Financial literacy is a skill or understanding that determines a
company's financial behaviour. Financial literacy enables an organisation to adapt to
changing conditions and ensures its long-term viability. This idea or concept applies to
unstructured entities. Many academics contend that higher financial abilities lead to more
social investment.

6. Research Problem

Handicraft sector suffers from various challenges. These challenges include the lack of
financial literacy and adoption of financial inclusion among the members. There is very less
information available about the financial model of handicraft industry. And the reason for the
lack of interest in study of handicraft industry from financial perspective is the lack of
financial data in this domain. With massive social capital embedded in the handicraft
industry, inclusion holds great promise for improving the financial ability of these units.
Without financial sustainability there is little hope that this sector can be promoted and
financial inclusion holds the key for the success of this sector. India has adopted the
achievement of Sustainable development goals such as poverty reduction and employment as

7
the goals for Indian economy. Handicraft sector can be the mechanism to achieve Sustainable
Development Goal and hence financial inclusion has a great role in achievement of this
objective. Handicraft industry has made an indelible mark in the economic growth of the
country. And it could play a pivtol role in promoting good financial behaviour. This study
aims at understanding the role of financial inclusion on financial behaviour of women
working in the handicraft industry in India.

7. Literature review

(Associations 2017) craft and heritage that took decades to be appreciated as part of an industry
that is ailing and fraught with challenges such as lack of an ecosystem. There is a need for a
more responsive approach for integrating the entire value chain and strengthening the Credit
and Market linkages. Moves toward financial inclusion include developing effective financial
models to achieve sustainability, market linkages, create sufficient differentiation and provide
adequate infrastructure to facilitate ease of doing business, market promotion and capacity
building. As per this report this sector is fraught with challenges such as lack of organized
data on domestic sale of handicrafts, data on artisans, crafts and socio-economic conditions.
(M, Mangaonkar Vaiude P & Joshi 2021) in their study discuss that interwoven by the
threads of social and economic development, this art forms the foundation of Indian heritage
has a very dismal contribution to the total trade and exports in India. Handicrafts contribute
less than 2% of international trade whereas Chinese handicraft contributes more than 30% to
the international market. A proven platform for promotion of trade and employment, this
sector is fraught with challenges such as availability of raw materials, correct market value
and market linkages. Drawing an analogy with the dying art of traditional wooden by craft
and Ganjifa cards of Sawant wadi in Konkan in Maharashtra, the paper highlights the need to
preserve this art through market linkages. (Fabeil, et al. 2014) define handicraft as the
products that are made using hands and that basically has cultural and artistic values.
(Rogerson 2010 ) define craft products as products that constitute 80% art by hands and rest
20% constitute of raw materials such as natural fibres, textiles, clay and beads. Related to the
question of sustainability of these units and business organizations, the future of these
organizations is marred by the lack of education and financial literacy. The major weakness
of these initiatives is lack of education among the members of the lending groups. Level of
education is very low and most of the artisans are unable to get benefit due to lower level of
access to credit and markets, (Makhdoom, Shah and Bhatti 2016). From the exposition of
contemporary literature in domain of handicraft and culture, one realizes that most of artisans

8
working in handicraft sector are women from unorganized sector. Poverty and lack of
education hampers their growth, (Doane 2007 ). Many research studies appreciate the
community initiatives such as Self-help groups to promote handicraft in India, (R, Levaku
2014) in their study appreciate the community initiatives such as Self-help group in India for
promoting Women entrepreneurship and handicrafts. Another major issue with handicraft
industry is that despite increasing thrust on financialization, the members of self-help groups
or handicraft unit are unwilling to take credit, (D Bhanot 2020). And repayment of the credit
remains a challenge for the members of handicraft units in India, (Robinson 2001). Since its
inception, these units suffer from various challenges such as lack of adequate record keeping,
maintenance of savings, loan registers and lack of propensity to borrow and adhere to the
group norms, (Tankha, Ajay 2012). Slipping into theoretical discussion social innovation is
emerging as a factor impacting the growth of small-scale sectors in India. The author
highlights the lack of information and market linkages as the major factor that have been
responsible for lackadaisical growth of this sector.

8. Research Design and Methodology

For the purpose of research mix of Quantitative and Qualitative methods have been used.
Findings of qualitative methods are followed by the quantitative method has been used.
Regression analysis has been used for the purpose of analysis. And this is followed by
Grounded Theory approach for the purpose of analysis. Overall explanatory sequential
approach has been used for the purpose of analysis.

Based on the earlier research, the study uses an econometric model using Simple Pooled OLS
was used to measure the impact of gender and literacy on the income of the handicraft units
in India. In the following section the dimensions of financial inclusion, namely literacy,
gender and investment income, for the cross-sectional units which is the members of the
handicraft units has been included.

Table 1: Impact of literacy and gender on wages of the member of handicraft units

Wage it = β0 + β[Link] + β2 female + εit

Where wage it = wage for the member i for period t, female i = gender of member i, literacy
it = literacy of member i for period t and gender*literacy it = impact of literate female on
wages of member as compared to the illiterate member. The base group of this equation is
male who is illiterate. As compared to the male who is illiterate earns 146.86 units of Indian

9
rupees extra, female who is illiterate earns 4,458.39 units of Indian rupees extra, male who is
literate earns 11,422.54 units of Indian rupees extra. Female who is literate earns 9,377.40
units of Indian rupees less than the male who are illiterate.

Table 2: Impact of literacy and gender on financial behaviour of the member of handicraft
unit. This financial behaviour includes the investment decision

Dividend it = β0 + β1. education + β2. female + β3. female*literacy + β[Link] + e it

Where Dividend (it) = Dividend for member i for period t, female i= gender of member i ,
literacy (it) = education for member i for period t, age (i) = age of the member i. According to
the analysis of the data, an illiterate female earns 98.14 units of Indian rupees in Dividend
income more than the illiterate male, illiterate female earns 0.57 units of Indian rupees less
than the illiterate males, age leads to an additional income of 100.22 units of Indian rupees
extra in dividend income.

Table 3: Impact of gender and literacy on financial behaviour of the member in form of
Interest income earned.

Interest it = β0 + β1. Literacy + β2. Female + β3. female*literacy + β[Link] + εit

Where Interest (it) is the interest income for the member for the period t, literacy = interest
income for the male member as compared to the illiterate male member, female = interest
income of the male members who are illiterate, female*literacy = interest income of the
female members who are literate, age = age of the members. According to the analysis, the
female members earn 99.35 units of Indian rupees extra in Interest income as compared to the
males who are illiterate, females who are illiterate earn 0.53 units less as interest income
compared to the illiterate males, males who are literate earn 100.70 units of Indian rupees less
in interest income than the male who are illiterate. Age leads to an additional income of 98.62
units of Indian rupees in Interest income.

Table 4: Impact of time period on the wages of the members of the handicraft community

Wage it = β0+ β1. January 2021 +β2. February 2021 + β3. December 2020 + β4. Femaleit +
β5. Literacyit + β6. Ageit + εit

Where Wage (it) is the wage of member i for the period t, January 2021, February 2021,
December 2020 is the time period as compared to the base period of January 2020. According
to the analysis, the members of the household earn 1,867.59 less than the period of January

10
2020. Females earn 4,639.34 units of Indian rupees less than the wages of the males; literacy
leads to an increase of 12,539.72 units of Indian rupees and age leads to an increase of 7.94
units of Indian rupees in the wages of the member.

In the analysis all the assumptions of Classical Linear Regression are taken care of. The
parameters are linear in regression, mean of the error terms is zero, covariance between
variable and mean term is zero, there is no correlation between the independent terms, there
is no Autocorrelation between the error terms and the minimum least square

Table of analysis have been attached at the end in the form of Appendix in this report

9. Measurement and sources of data

The analysis uses the CMIE Consumer Pyramid dx database in the form of Panel data for the
period January 2014 to January – April 2021. Most of the variables are chosen from the
theory and empirical data. The data is compiled from the CMIE Consumers Pyramid dx and
People dx. The database is comprehensive data compiled from the household pyramids
survey which is a longitudinal survey. The data for this survey is collected in waves across
the households and members of household across different Indian cities.

10. Grounded Theory Approach

For the purpose of analysis Constructivist Grounded theory approach has been used. This
methodology involves theorizing through practice. As a part of methodology Open Coding
has been used, (Charmaz 2006). Grounded theory approach, within the ambit of
Constructivist Grounded Theory approach involves Open Coding, Focussed Coding and
Theoretical Coding.

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Figure 1: Grounded Theory Approach (Source: George Hadley Qualitative Research)

Coding is defined as the process of naming and labelling observed objects, (Saldana 2015).
Emergent theory is the result of Coding and leads to the generation of the Grounded Theory.

11. Data Collection

While collecting the data, care was taken that the rights of other persons were taken care of. 4
basic tenets of research ethics were considered for the analysis.

(1) Informed consent

(2) Avoid deception
(3) Banking privacy
(4) Telling truth

Open coded interview technique was used for data collection. The data was collected through
telephonic interview from the members of Self-help groups across 3 different handloom self-
help groups:
(1) Bunkar Self help Group, Nawada Bihar – Smt Ranjila Devi
(2) Shashank Mahila Self help group, Varanasi, U.P.- Mrs Sangeeta Devi
(3) Maa Bamleshwari Self help Group, Bastar, Chhattisgarh, India

[Link] Coding

The sub process deals with line-by-line analysis of the data to analyze what people are
saying, what people are doing and what problems are encountered during the analysis.
Gerund coding has been used for the purpose of analysis. Exploratory interviews were
conducted for the purpose of data collection.

Memoing

After generating 15 codes, Memoing was undertaken to generate new ideas. A focussed code
was selected and analysis was done to document new ideas generated through out the
process. Not only Memoing helps to define and structure the codes into the theory but also
provide the basis for generating new categories later on.

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Figure 1: Open Coding

The method of Open coding was followed iteratively till at least 15 Open codes have been
generated. The basic principle of coding is to generate Gerund statements regarding the
following basic questions:

(1) What the people are doing?

(2) What are people saying? What actions are people taking for granted?
(3) What are common problems people encountering?

13. Focussed Coding

After generation of the first 15 codes, the process of focussed codes was used. Throughout
the process of Open Coding and Focussed Coding, Memoing was used to define the structure
codes into the theory. Constant comparison method was used by looking at the opposite
cases. And in this study theoretical sampling was followed to further refine theoretical
categories by referring to the literature.

Figure 2: Open & Focussed Coding first round (Institutional Sustainability)

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Figure 3: Open & Focussed Coding first round (Financial Sustainability)

Focussed coding was done based on the following approach of MACR (Meaning, Action,
Challenges and Results), (Charmaz 2006).

Meaning: How do you define code so that other people understand?

Action: Describe the action taking place in focussed codes. Explain how the codes support
and interact to generate the focussed codes. Are there other things that Focussed code does?

Challenges: From the memos are there any problems in the action that focussed code are
trying to solve? Is there any problem caused by actions and interaction? Are there any
barriers to completing the actions or carrying out the focussed codes?

Results: What happens when Focussed coding is taken place? What happened after the action
has finished?

Further constant comparison was carried

Transcripts of Interviews

14. Data Analysis

Participant 1 (Interview with Ranjila SHGs)

Interviewer: In your SHG what is assistance provided to you by the Government?

14
Leader of Ranjila SHG: There are 15 women members and there are few men. We have got
Bank loan under Ajeevika Government scheme. Ours is a handloom.

Interviewer: Are members of your group literate to open a bank account and book keeping?

Leader: Each member has a Bank Account and each member rear silk cocoon and with their
own hands and they make silk threads from the cocoon.

Interviewer: Are women members literate to maintain book accounts?

Leader: There is one member who is the leader of the group and she is responsible for the
maintenance of the books for all the women. In a federation of 15 to 20 Self help groups,
there is one leader who supervises the group

Interviewer: Do you think training for livelihood by bank help them?

Leader: All the ladies in the group work at home only and do not go outside and our goods
are sold in SARAS Mela conducted by the Ministry of Rural Development

Interviewer: Are members of your self-help group, proficient in savings because in many of
the Self-help groups are not proficient in savings?

Leader: A book keeper or animator representative helps us in opening the bank account and
they also help us to get the bank loan. Earlier under SJGY and now Ajeevika scheme by
NRLM, we are getting bank loans

Interviewer: Are there any repayment issues in the groups?

Leader: Time from when we got the loan and poor people are weavers and that is why some
of them have not been able to return the loan amount. Even SARAS mela has not been
conducted for us. Bank loan is continuously extended to us as there is no bank default in our
SHGs. But there is a need to increase the loan size. We maintain all the registers for loan
amount taken, savings generated. Women take out the thread and cloth is woven by the men.
We buy the clothes from member and then we sell it in SARAS mela.

Interviewer: Do all the members know about the bank loan and have they benefited from
this scheme?

Leader: All the members in the group are supported by the bank. It’s a costly item, silk cloth.
We need higher loan as Rs 3,00,000 is not sufficient. Our members are proficient at
maintaining the records of the group. All the members are literate and yes, all the members

15
have benefitted from bank loan. This has helped women to get employment and with bank
loan they can buy cocoon or raw material. When we started, we had nothing but with bank
loan we got money to purchase Cocoon.

Interviewer: Has your group received any kind of bank loan?

Leader: Bank training is beneficial for us. Members of our group are all proficient in group
formation, group lending and marketing. At least, leader of the group is highly proficient and
we would prefer the literacy by banks.

Participant 2 (Interview with Mahabaleshwari SHG, Chhattisgarh, India)

Interviewer: Your SHG in handicraft avails of any Government scheme

Leader: Government is helping us in providing us financial loan, women empowerment, skill

building, efficacy building and this has helped women to be self-reliant.

Interviewer: How many women members are there in your group? And how have they
benefitted from the banking financial inclusion programme?

Leader: We have received training and I have also given IIBF training and after this I learnt
to manage bank account, insurance and this has helped me. This training has helped me. Most
of the women are unable to maintain their accounts due to the lack of literacy. But through
training they get confidence to avail benefits under Government scheme. Women get loan
after 26 meetings and since I work in 18 groups and all the groups have taken bank loan. In
order to monitor each other, we have personal discussions about how to invest money and
how to increase money through livelihood generation. Digital channel and bank channel are
helpful in increasing business impact. Digital channel helps to resolve the issue of distance
but all women are not proficient to use mobile banking. Training can help women to become
self-reliant in using the mobile channel for banking.

15. Summary of findings

Focussed Code: Institutional Sustainability

According to the data research, preparing accounts and making financial decisions are both
difficult tasks for members of Indian self-help organisations. Members of the group keep
track on each other's performance through personal chats. According to self-help groups,
people find it difficult to travel to the hamlet since banks are far away. Most of the time, the
loan amount is insufficient for the members since the loan size (Rs 3,00,000) is insufficient to

16
meet the group's demands. Members will need to be educated. Banks provide education,
counselling, and digital training to members of the organisation. As a result, female members
are given more influence. The importance of literacy and accountancy knowledge, as well as
peer monitoring, cannot be overstated.

Focussed Code: Financial Sustainability

According to personal interviews, members of the group find it difficult to bank on their own
and must seek the animator's assistance. Members are also having trouble repaying their
debts. At COVID 2021, members complained about a lack of marketing support. Bank loans
are insufficient to cover the group's needs. According to the data, more financial
intermediation is needed in the form of training, marketing support, and raising the loan size
for members. Self-help organisation members have a difficult time repaying their debts,
posing a financial sustainability issue.

Theoretical Coding

The data collection and analysis were done concurrently for the purpose of analysis in this
stage of Magnitude Coding or Theoretical Coding. On the basis of familiarity, two or three
focussed codes were chosen, and theoretical codes were produced based on the familiarity
between the concentrated codes. Theoretical clustering was used to construct conceptual
categories once the theoretical codes were generated. The memoranda of the focused codes
were compared to the theoretical codes. For verification, the data was compared to the
existing literature. For the aim of generating Theoretical Codes and Theoretical Coding, the 5
Cs method was used. Cause, Context, Condition, Contingency, and Consequences are the five
Cs.

17
Figure: 4 Theoretical codes

From the analysis of the data, it becomes apparent that Sustainability can be achieved through
Financial Inclusion. Financial inclusion implies providing access to the members of the Self-
help group, by providing financial literacy, digital literacy and promoting peer mechanism.
This will further help in achieving the Sustainable Development Goal of poverty reduction.

16. Conclusion

The analysis has sought to answer the pertinent question identified through the scrutiny of
extant literature, whether literacy and gender has any impact on handicraft industry in India.
It seeks to answer the question regarding the impact of financial inclusion on the income and
other demographics pertaining to the members of handicraft unit. Financial inclusion has
been defined as access to financial services for citizens of India and it includes demand side
and supply side factors. Demand side factor include financial literacy and gender. This report
concludes that literacy has a positive impact and gender has negative impact on income of
citizens of India. Moreover, during the COVID period the income of the handicraft units have
been adversely impacted.

18
Appendix
(Attached as a separate file)

19
References

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