The Transformative Role of Microfinance in Poverty Alleviation among Farmers in Faridabad District, Haryana

Abstract This study investigates the transformative potential of microfinance in reducing poverty and enhancing resilience among farming households in Faridabad district, Haryana. Agricultural communities in the region face persistent challenges of low and uncertain income, credit constraints, and vulnerability to shocks, making access to financial services particularly critical. The research evaluates the role of Self-Help Groups (SHGs), Joint Liability Groups (JLGs), and microfinance institutions (MFIs) in promoting income generation, agricultural investment, household stability, and women’s empowerment. Employing a mixed-methods approach, the study combines quantitative econometric techniques—propensity score matching (PSM) and inverse probability weighted regression adjustment (IPWRA)—with qualitative data from surveys, interviews, and focus groups. This design ensures both robust causal estimation and nuanced understanding of participant experiences. The study recommends context-sensitive loan structures, integration of financial literacy and skill-based training, and the adoption of gender-inclusive strategies to improve outreach and effectiveness. Strengthening the sustainability of SHGs and JLGs is highlighted as essential to ensuring long-term developmental impact. By linking financial inclusion with empowerment and resilience, the research underscores the importance of microfinance as both an economic and social instrument for rural transformation.