Assessing the Role of Green Microfinance in Poverty Alleviation and Sustainable Livelihood Development: An Empirical Study of Rural Households

Abstract

This study examines the role of Green Microfinance in poverty alleviation and sustainable development in the least literate districts of Uttar Pradesh, India. Green Microfinance combines access to financial services with environmentally sustainable practices, aiming to enhance livelihoods, promote ecological resilience, and address socio-economic disparities. Primary data were collected from 102 rural households through a bilingual (Hindi and English) structured questionnaire, using a multi-stage stratified sampling technique, and supplemented with secondary sources. Analytical methods focused on Principal Component Analysis (PCA), a component of factor analysis, employing Varimax rotation to extract key dimensions of impact. The PCA results identified four principal factors Income and Asset Creation, Environmental Sustainability, Capacity Building, and Social Empowerment which together explained 64.7% of the total variance. These findings underscore the multidimensional benefits of Green Microfinance, revealing its capacity to foster economic growth, encourage environmentally responsible practices, and strengthen community resilience. The study offers strategic implications for policymakers, microfinance institutions, and non-governmental organizations seeking to design and implement inclusive, sustainable financial interventions in socio-economically disadvantaged regions.