Self Help Group Movement in West Bengal and India

Self Help Groups
in India and West Bengal

Discussion Forum
Organized by: Institute of Social Sciences and
Self Help Group Promotional Forum
2nd February, 2013
SHGPF: SHG in India and West Bengal 1

Outline of this presentation
1. Genesis of SHGs
2. Finance Focus
3. Strategy of SHGs
4. Characteristics of SHGs
5. Progress of SHGs
6. What is the impact
7. Supply demand mis-match
8. Visible changes in the environment
9. What is the way out – a strategic framework
10. Foreseeing the future – financial, livelihood, social and governance
scenario
11. What is the way out - an operational framework


Genesis of Self Help Groups
As part of supplementary developmental
approach - SHG-bank Linkage Program in
1992 – financial access
1. Linkage between informal groups like SHG
and formal banking sector
2. without any security or collateral
3. without any scheme


Finance Focus …. why

• 51.4% of farmer households are financially excluded
from both formal / informal sources.
• Overall, 73% of farmer households have no access t0
formal sources of credit.


Progress on Self Help Groups
The SHG - Bank Linkage Programme can
be regarded as the most potent initiative
since Independence for delivering
financial services to the poor in a
sustainable manner
– Rangarajan Committee on Financial
Inclusion


The major strategy of MC
through SHG
to provide easy credit for poor people

to
generate income

through
various self employment means

Characteristics of SHGs
a strong feeling of affinity
•relationships of trust, non-exploitative
relationships
•homogeneity among members,
•voluntarism
• self reliance
•willingness to support one another in need on
certain structural features - common origin /
same livelihood base / gender bond

Characteristics of SHGs

Strong feeling of affinity

vis a vis

Peer Pressure in the case of Grameen Model


Status on Self Help Groups … coverage
SL Rural HH No. of States
coverage states
range %
1 0 - 20 9 Bihar, Jharkhand, J&K,
UP, Sikkim, …
2 21 - 50 10 Assam, CG, Guj, HP,
Raj, Uttaranchal…
3 51 - 75 5 Maha, Tripura, WB.
(57% and 150%) ….
4 76 - 100 2 Goa andOdisha
5 > 100 7 AP (150%& 765%),
Karnataka, Kerala, TN.
9

Status on Self Help Groups … Savings
SL State / No. of Amount Savings /
Country SHGs (Crores) SHG
(lakh) (Rs.)
1 AP 14.96 1490 9962

2 TN 9.25 790 8541

3 WB 6.85 377 5499

4 India 79.60 6551 8230

Status on Self Help Groups … Credit
SL State / No. of Credit Credit / SHG
Country SHGs disbursed (Rs.)
(lakh) (Crores)
1 AP 3.79 8171 215875
2 TN 1.80 1933 107443

3 WB 0.99 551 55481

4 India 11.48 16535 144046


Status on Self Help Groups … Outstanding
SL State / No. of SHGs OS OS / SHG
Country (lakh) (Crores) (Rs.)
1 AP 14.01 15342 109506

2 TN 5.14 4639 90223

3 WB 3.83 1570 40999

4 India 43.54 36340 83455


Status on Self Help Groups … linkage
SL State / % of SHGs – % of SHGs –
Country Credit received Credit
during this year outstanding
during this
year
1 AP 25.30 93.66
2 TN 19.44 55.57
3 WB 14.50 55.87
4 India 14.42 54.70


Status on Self Help Groups … NPA
SL State / NPA – 2012 (%) NPA – 2011 (%)
Country

1 AP 3.46 2.02

2 TN 9.58 7.72

3 WB 3.11 2.28

4 India 6.09 4.72


Few other observations ….

1 % of sample SHGs having a loan 59
outstanding to Banks

2 SHG Savings and Loan Ratio 1:3.5

3 Inadequate quantum of loan (%) 43

4 Bank loans are not timely 27


Few other observations ….

1 Learnt to sign 88 %
2 SHG women attends (alone) meetings 66 %
outside the village
3 Casting of vote – independent 52 %
decision
4 Husband shares the household work 68 %
5 Women taking up non-traditional 30%
works


What is the impact
• ‘Strikingly, 30 years into the microfinance movement we have little solid evidence
that (microfinance) improves the lives of clients in measurable ways’

• A study shows “..on net, 1.8 million microcredit client households, including 9.43
million household members, crossed the $1.25 a day poverty threshold between
1990 and 2008” * This study made no attempt to establish causality between microcredit and
poverty alleviation. Instead, it simply estimates the change in status of microcredit client households
between 1990 and 2008, when compared with their status during the time of the first loan received by
any member of the household.

• Microcredit is a tool for unlocking human dreams. But microcredit, by itself, is
usually not enough.

• That may seem like an unusual way to start an annual report from an organization
named the Microcredit Summit Campaign, but we recognize that we cannot
achieve our goals, especially the goal to see 100 million families move above the
US$1.25 a day threshold, with microcredit alone.


Supply demand (mis) match

• What ever your types of business venture, the
repayment schedule is weekly.
• At the same time, even if one embarks upon long
term economic venture, the repayment period is not
more than one year.
• The demand side has to comply with the delivery and
to the advantage of the supplier


(mis) match means

• the repayment is not from the economic activities for which
the credit is supposed to be used and yield economic surplus.
• But it is very useful for trading / vending type of activities
where business cycle is very short and likely to be less than or
match with the credit repayment period.
• It is true that most of the categories of credit recipients of
MCs are either engaged in trading and small traditional
economic activities.
• And some cases, they have to repay from the incomes of
other activities.


Visible changes in the environment
• National Conference on CBMF Community Based Approaches for Inclusive Growth

• “.... we need to focus on the last theme--empowerment and less on the
NABARD/Velugu obsession with credit” -- Deep Joshi

• “I asked how many of you have toilets at home “ – a question asked to SHG
members in AP by Mr. Jairam Ramesh, Union Minister

• It is really nice to see that this conference is discussing something outside credit” …
opening remark by Dr. Chakraborty, Dy. Governor, Reserve Bank of India

• NRLM – Social Mobilisation, Institution Building, Financial Inclusion, Livelihoods
Promotion and Convergence


SHGPF’s strategy
From the very beginning – SHG is micro development unit,
not a MF delivery units and

Therefore the key functional areas for SHG movement are
1. creating organizations of poor and marginalized women
(SHG, Clusters, Federations, etc.)
2. ensuring facilities for financial services (savings, credit,
insurance, pension, provident fund, and remittance)
3. addressing income enhancement through various
livelihood measures
4. addressing social, gender and women empowerment
issues, and finally and very importantly
5. strengthening governance locally and globally


What is the way out
Broad sectoral Approach Intermediary Goal Final Goal
Intervention in
1. Financial 1. Institution 1. Economic
Services. building empowerment
of women Poverty
2. Social 2. Facilitation elimination
sector 2. Women’s &
services 3. Service collective voice improved
provisioning and political quality of life
3. Livelihood empowerment
services 4. Engagement
for rights


The process needs high level of
performance
• in financial management,
• in institution building,
• in making use of financial services for obviating the supply-demand gap at
the subsistence level along with treading into investment for income
generation by sustainable use of resources through participation in the
market.

Coupled with this, there is a need to understand the environment they live in,
• to identify the immediate and long term and wherever possible micro and
macro level linkages that are severely affecting to wreck their lives
• to strengthen their own internal institutional systems, they also need to
understand the relative position of theirs vis a vis the other institutions
and mechanisms in order to change the relationships in favour of them


Foreseeing the future .... Financial Scenario

• Silver Bleak
SHG members deposit multiple types of Limited scopes like compulsory
savings with Formal FI / Banks savings

SHG members getting adequate and Losing the battle with MFIs
multiple loan from Banks
SHG members getting adequate and Almost absent
multiple insurance / remittance /
pension products from Banks
Financially sustainable own institutions Weak Institutions
Local Cooperative Banks / BCC / German As clients and vulnerable
Cooperative - as owner


Foreseeing the future .... Livelihood Scenario

• Silver Bleak
Some members engaged in self Only trading through MFI’s
employment - production, loan
manufacturing and trading
Skill for Jobs Unskilled
Market - own and external External market
Wage Employment with Unskilled wage eraner –
negotiable skill and voice unorganized
Own collectives


Foreseeing the future .... Social Scenario

• Silver Bleak
Rights and entitlement - control At the receiving end of the
and access ensured delivery
Social Equity Social inequality
Gender Equity Gender inequality
Strong Institution and capacity Lack of voice
to engage
Inclusive with necessary positive Exclusive / discriminating
discrimination


Foreseeing the future .... Governance Scenario

• Silver Bleak
Institutions with participatory No institutions of poor /vulnerable
governance
Engagement with and Participants in Engagement not possible – one
Elected governance sided
Synergy between Participatory Elected governance affords to
governance and Elected governance : a ignore people’s needs and voice
case for people’s governance
Constituents ‘ interest preserved Elites prevail
people’s governance controls / manages Economy driven by corporate
economic principle interest


Way out – an operational frameowrk
• the promotion of local micro-savings for
accumulation of capital
• promotion of genuine community-owned and
controlled financial institutions, such as credit
unions,
• Explore local markets and build own strangth
• Macro policies that promote local sustainable
businesses


Thank you for your patience

And

Requesting you to debate ……


Self Help Group Movement in West Bengal and India

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