A Study On Problems And Prospects Of Self- Help Groups Towards Human Resource Empowerment With Reference To Namakkal District

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1 A Study On Problems And Prospects Of Self- Help Groups Towards Human Resource Empowerment With Reference To Namakkal District Mr.S.Nagarajan Research scholar (Ph.D), Bharathiar University, Coimbatore. & Dr. R.Mohanraj, HoD,Govt Arts College,Kumbakanam & Mr.G.Kanagasabapathy Research Scholar (M.Phil) Nandha Arts and Science College, Erode ABSTRACT Self- employment is a significant step to have sustained incomes and remove the shackles of poverty. Self help groups are voluntary gatherings of persons who share needs or problems that are not being addressed by Existing organizations, institutions, or other types of groups Rapid progress in SHG formation has now turned into an empowerment movement among women across the country. Economic empowerment results in women s ability to influence or make decision, increased self confidence, better status and role in household etc.the participation of women in SHGs made a significant impact on their empowerment both in social and economic aspects. The main objective of this study is to find the impact of microfinance in pushing back rural poverty. Hence, the socioeconomic status of the respondents both in pre- and post-shg situations, were sought to be analyzed. The present study addresses issues related to the performance of self-help groups. Various research gaps have been identified that need to be studied immediately to strengthen the performance of selfhelp groups is found that the income of members of Self Help Group has increased after joining On the basis of the study undertaken researcher is able to provide the following findings. It is found that no member of the Self Help Group is occupation less as compared to 75 percent of the members were having no occupation in the pre Self Help Group. The Self Help Group. It is observed that the activities of Self Help Group helped them to generate income and slowly changing their living condition making them out of poverty. It is observed that the members of SHG are getting knowledge of Banking system, knowledge about health education, Development of savings habit and skill up gradation etc It is observed that the overall conditions of Self Help Group are increasing after they have joined the Group. Keywords: Micro-finance, Capacity Buildings, Credit Linkage to SHG's,Credit rating and Linkage, Sustainable Rural development and Skill training for Women INTRODUCTION CONCEPTS AND TERMS Self Help Groups Self Help Groups are voluntarily formed informal groups. An SHG consists of members. The members are encouraged to save on regular basis. They use the pooled resources to meet the credit needs of the group members. The groups are democratic in nature and collectively make decisions. Since the members are neighbours and have common interest, the group is a homogenous one and cohesiveness is one of the characteristic features of the group. Regular savings, periodic meetings, compulsory attendance, proper repayment and systematic training are the salient features of the SHG. Self Help Group is a path toward empowerment of rural people and the ultimate goal is the improvement of social and economic status of rural women. Self Help Group is a participatory endeavor of people trying to secure three types of power- social, political and psychological- that would empower them and improve their lives. 1 > RJSSM: Volume: 05, Number: 08, December 2015 Page 212

2 Evidences from various developing countries throughout the world have shown that the poor can be helped by organizing themselves into Self Help Groups. Financial service is only a small part of the success story and the more fundamental have been voice, identity and empowerment. Self Help Groups form the basic constituent unit of micro finance movement in India. 2 The characteristic features of Self Help Groups are: Small in size (10 to 20 members in a group). 1. Identical background, common interest and affinity of members. 2. Close and intimate knowledge of member s needs and problems. 3. Democratic functioning. 4. Simple documentation. 5. Collective decision making and peer pressure in repayment. 6. Regular meetings and savings. 7. Group access to external funds. 8. Focus on poor people especially women below poverty line. Self Help Groups have the following advantages: 1. They help the poor to gain economic and social empowerment. 2. They reduce the transaction cost of lenders and borrowers. 3. They encourage the poor to save. The poor become creditworthy and bankable customers and are not seen as beneficiaries. 4. Women are trained in new skills and technologies and the wage earning workers become micro entrepreneurs. 5. Increased asset creation and savings, higher employment and improved social lives of members are the benefits to the members. Self Help Group (SHG) is a group of 12 to 20 women of the same socio-economic background who come forward voluntarily to work together for their own upliftment.the unique feature of the SHG is its ability to inculcate among its members sound habits of thrift, savings and banking Regular savings, periodic meetings, compulsory attendance, and systematic training are the salient features of the SHG concept. Each group selects one animator and two representatives from among themselves. The animator is responsible for providing leadership to the group and to maintain the various registers. The representatives assist the animator and maintain the bank accounts of the group. Self Help Groups consist of BPL women members in the age group years residing in the same area. NGOs and PLFs affiliated with TNCDW undertake the formation of SHGs. They are trained to become cohesive as a group through regular meetings and encouraged to cultivate savings habit. Capacity Building Programmes such as SHG and A & R training are imparted to the Group members and within a period of six months. After a period of 6 months, SHGs are rated for Credit Linkage by a Committee consisting of Bankers, APOs, NGOs, Block level officer and PLF Representative. For the eligible Credit rated SHGS, credit facilities are largely made available through Banks, both for revolving fund and economic activity. Other sources of funding for Credit linkage are SGSY, TAHDCO, NABARD & SJSRY Under various Skill Training Programmes, eligible SHG members are encouraged to start economic activities or undertake self employment. Efforts are made by TNCDW for marketing the products produced by SHGs wherever possible locally and for sale in exhibitions. In order to enable all poor women living below poverty line to join and benefit from the Self Help Group movement, the group formation is undertaken with special focus on NREGS women workers, urban slum dwellers and in Village Panchayats where SHG coverage is still inadequate. Hence, Tamil Nadu will have the distinction of enrolling all women living below the poverty line into SHG movement. > RJSSM: Volume: 05, Number: 08, December 2015 Page 213

3 Status Reports Details of SHGs as on No. of SHGs 5,56,311 No. of SHG Members 85,69,676 No. of Rural SHGs 3,72,092 No. of Members in Rural SHGs 57,37,023 No. of Urban SHGs 1,84,219 No. of Members in Urban SHGs 28,32,653 Total Savings Rs.3440 crores Revolving Fund and Credit Linkage No.of SHGs Revolving Fund provided 4,92,229 No.of SHGs Revolving Fund provided Rural 3,62,241 No.of SHGs Revolving Fund provided Urban 1,30,480 No. of SHGs credit linked 4,93,330 Total credit linked Rs.17, crores Economic Assistance No of SHGs provided Economic Assistance 63,522 Amount released for Economic Assistance Rs crores Panchayat Level Federation No. of Habitation Level Forums 22,640 (Mathi-15,509; PVP-7,131) Restructured (Mathi-8,714; PVP-2,422) 11,136 Registered (Mathi-7,671; PVP-2,414) 10,361 Incentive provided (Mathi-; PVP-) 6,507 Bulk Loan provided to PLFs 447 Bulk Loan Amount sanctioned to PLFs Rs crores Slum Level Federation Cluster Level Federations 1,126 SLF formed 459 SLF Registered 428 Skill Training Programme a) Youth Skill Training Youth Skill Training provided to 1,19,336 Placed under YST 70,094 b) EDT Programme Completed 17,323 Affiliation of NGOs and PLFs No. of NGOs affiliated 449 No. of PLFs affiliated 531 Marketing State Level Marketing Complex 1 District Level Marketing Complex 51 Block Level Small Complex 256 Infrastructure No. of PLF Buildings No. of PLF Buildings Village Haats 83 Source: TamilNadu Development Corporation-Mahazhir Thittam > RJSSM: Volume: 05, Number: 08, December 2015 Page 214

4 REVIEW OF LITERATURE: There have been many studies on the working of SHGs in different parts of India. These studies mostly covered the SHGs working in the States of Orissa, Andhra Pradesh, Maharashtra, Tamil Nadu, and Uttar Pradesh, Karnataka A study by NABARD covering 560 SHG member households from 223 SHGs across 11 states, showed many positive results on the impact of participation of rural poor in the SHGs. It shows that there have been perceptible and wholesome changes in the living standards of SHG members in terms of ownership of assets, borrowing capacities, income generating activities, income levels and increase in savings. It indicates that the average annual saving per household registered an increase over three-fold (NABARD, 2002).Impacts of micro finance on women were addressed by researchers and some important regional, national and international studies are presented here to examine the suitable literature on this issue. Experiences of Grameen bank in Bangladesh have shown that availability of collateral free tiny loans for income generating activities for poor have a significant impact on the lives of poor families (Yunus 2004).Further, a few (Bokil, 2005 ), reported that SHGs were the best place to address the issues of domestic violence and also forwarded arbitration in domestic quarrels and disputes, counseling, facilitation of legal action and also provide moral and motivational support to the victim.(meher, 2003), and (Ravi & Venkataramana, 2002), reported that SHGs have a positive impact on elimination of poverty and act as an instrument for empowerment of women through economic Intervention.(Patil and Benjamin, 2011), reported that micro finance through SHGs has had a positive impact on income, expenditure and savings of the women clients. Indhumathi and Palanivelu (2013) Women Empowerment through Self Help Group reveals that the formation of SHGs has led to a member of positive feature. The most important achieved aspect is that the earlier belief that the poor are unbankable and less credit worthy has been wrong. The success of any strategy of woman empowerment depends upon the following factors: level of education, hard work, social customs, family planning, environment and collective strategies beyond the microcredit to increase the endowments of the woman enhance their exchange outcomes vis-a-vis the socio culture and political spaces are required for the women empowerment. Parker (2013) in his article Empowering Women Through Microfinance in India depicted that across the globe, but especially in Asia, and particularly in areas where rural population density is relatively high, microfinance can be an extremely effective poverty reduction tool. Microfinance enterprises can also potentially be very profitable undertakings as excess urban capital is redirected to credit starved rural areas. Modern microcredit is a relatively new phenomenon and as such some growing pains should be expected. Dr. Bhatt and Rajdev (2012) in their study An Analysis of Factors Empowering Women Through Microfinance stated that the research study aimed at checking the impact of microfinance on women empowerment. From the study it can be concluded that microfinance institution helps in poverty alleviation and through that standard of living of women also improves. The SHG s have provided social opportunities to make them aware about these rights, entitlements and development programmes as well as starting income generation activities for substantial earnings and selfemployment. Dr. DhirajJain and MsBhagayashree Jain (2012) in their study Does Microfinance Empower Rural Women?- A Empirical Study in Udaipur District, Rajasthan revealed that Microfinance program like the SHGs in India have been promoted for their positive economic impact and the belief that they empower women. The study result strongly demonstrates that there is a significant increase in the women empowerment of the SHGs members. However, social backwardness, indebtedness and presence of other microcredit programs in the same or nearby villages have a significant positive influence on women s participation in this program. Rajendran and Dr.R.P.Raja (2011) in their study Does Micro Finance Empower Rural Women?- A study in Vellore District, Tamil Nadu summarizes that there is an appreciable empowerment in the political space than economic empowerment and there was negligible social empowerment as a result of participating in microfinance through the SHG programme. > RJSSM: Volume: 05, Number: 08, December 2015 Page 215

5 Singh & Singh (2010) in their study Loan default by SHGs in Rajasthan unraveled many interesting dimensions of Self Help Groups and reinforced the significance of focusing on the core principles of SHG formation and promotion as identified by some of the earlier enquiries into SHG quality and performance. The study findings revealed that the ad hoc formation of groups, lack of emphasis on group development, widespread laxity in writing and absence of basic books of record, lack of attention to member savings, low incidence of inter-loaning, appropriation of benefits by the leaders/ office bearers, credit to group without estimating credit needs of members, lack of effective grading by banks are the defining characteristics of the groups. Deininger & Liu (2009) in his study Longer-Term Economic Impacts of Self-Help Groups in India suggests that SGH s a program that not only fosters group formation but also supports more mature groups through federation and credit access can have significant economic benefits in the long term. To assess the overall desirability and impact of such programs, a key question relates to the extent to which benefits will be maintained once outside support is terminated. The answer will at least partly depend on whether either the SHGs established by the program continue to operate development and, related to this, whether beneficiary households will be able to use the one-time injection of credit and capacity to push them on a permanently higher trajectory of economic activity and asset accumulation. Ranjula Bali Swainan and Fan Yang Wallentin (2009) in their study Does microfinance empower women evidence from Self-Help Groups in India strongly concluded in their study that SHG members were empowered by participating in microfinance program in the sense that they could have a greater propensity to resist existing gender norms and culture that restrict their ability to develop and make choices. Prof. Singh (2008) in his study Micro Finance and Empowerment of Scheduled Caste Women: An Impact Study of SHGs in Uttar Pradesh and Uttaranchal stated that there has been a paradigm shift in development and governance. Democratic decentralization, partnership with NGO s, empowering community based organizations, participatory development, 223sustainable growth and equity etc. have proved to be instrumental in people participation in development and governance as well as their empowerment.supporting her family financially while earning more than Rs 5000/- per month and with this money she is not only giving her children quality education. Meena Kumari an SHG Beneficiary of Hindustan Zinc whose hand-stitched craft embodies the spirit of Rajputs in various artifacts and dresses. By joining the local Self Help Group supported by Hindustan Zinc, this woman of Debari village has acquired stitching and embroidery skills and has become an entrepreneur. Shahnaz Hussain lost her husband 15 years ago, her life came to a standstill. The thought of funding the education of her two children and bearing the family's expenses almost sent the homemaker from a Rajasthan village into depression. Speaking to other women in her Bichhdi village in Udaipur district, she came in touch with the Jai Hind self-help-group (SHG), which trained her in stitching and tailoring. Today, she is one of the many businesswomen of rural Rajasthan supported by Hindustan Zinc. The Jai Hind SHG not only helped her get educated but also empowered her socially and economically. Shahnaz is one of the 6,000 rural women who have been able to support their families by joining Hindustan Zinc's SHGs launched in Micro-finance Even though the terms micro credit and micro finance are interchangeably used, the term micro finance connotes broader activity. Now, there is a shift from micro credit (small loans) to micro finance, in which in addition to credit, mobilization of savings, insurance, training and support services like assistance in marketing of client s products are provided which are otherwise known as credit plus. Micro finance programme has been introduced in many countries since it has been considered as an important tool to combat poverty. Grameen Bank in Bangladesh, Banco Sol in Bolivia and Bank Rayakat in Indonesia are some of the examples and Grameen model has been > RJSSM: Volume: 05, Number: 08, December 2015 Page 216

6 replicated in many developing countries. Micro finance is considered as a development tool to alleviate poverty in Asian, African and South American countries. Micro finance gives quick and tangible results to the poor people especially women. Micro finance is required by the poor people to invest in income generating activities which will break their vicious cycle of poverty. A comprehensive definition given by Robinson is applicable to micro finance in all countries in the world. Micro finance refers to small scale financial services for both credit and deposits that are provided to people who farm or fish or herd; operate small or micro enterprises where goods are produced, recycled, repaired or traded; provide services, work for wages or commissions; gain income from renting out small amounts of land, vehicles, draft animals, or machinery and tools; and to other individuals and local groups in developing countries, in both rural and urban areas. 3 NABARD has defined micro finance as follows: Micro finance is all about provision of thrift, credit and other financial services and products of very small amount to the poor in rural, semi urban and urban areas for enabling them to raise their standard of living. 4 Sharma (2007) explains the principles of micro finance based on the experiences gained during last three decades all over the world. 1. Small savings or thrift by poor is possible. 2. Poor people need small collateral free loans with regular frequency instead of large loans at a time. 3. Repayment matches with the family cash flow instead of individual cash flow. 4. Rate of interest is not crucial. 5. Timely, adequate and continued credit facility. 6. Relatively small repayment periods e.g. weekly, monthly, instead of yearly installments and half yearly installments. 7. Credit plus is preferred to credit alone. 8. Women are better customers than men. 9. Group method of lending is more successful than individual lending. 5 UN declared the year 2005 as year of micro credit since the policy makers of UN supported the view that micro finance is an instrument to fight against poverty. According to Nobel Committee, micro finance can help the people to break poverty, which in turn is seen as an important prerequisite to establish long last peace. 6 It has been accepted that micro finance plays a vital role in reducing poverty since it paves way for employment and empowerment which leads to economic development. Poverty can be eradicated only by employment opportunities and the employment seeker and worker should become a job provider. This is possible through micro finance coupled with micro enterprises. But still micro finance plays a modest role in India. At all India level, less than five per cent of rural poor households have access to micro finance as compared to 65 per cent in Bangladesh. But significant variation exists across Indian states and 75 per cent of micro finance flows to the four southern states. 7 Empowerment of women through Micro Finance benefits individual women, their families and the community as a whole through collective action for development. Pollution of water, deforestation, inadequate public health and sanitation, ground water scarcity, falling ground water table, overexploitation of water resources are some of the problems related to environment which may be addressed through sustainable rural development which in turn is possible through SHG and micro finance. > RJSSM: Volume: 05, Number: 08, December 2015 Page 217

7 Group formation, provision of collateral free credit, participatory efforts for income generating self employment, knowledge and awareness and skill development have improved the socio economic conditions of rural poor. Self Help Groups and micro finance are found to be successful in promoting empowerment of women leading to development. Capacity Buildings The members and office bearers of the SHGs promoted by Mahalir Thittam are provided systematic training to bring about qualitative changes in their attitude and to promote cohesion and effective functioning of the group. All the SHG members are imparted training in 4 modules for 4 days. The primary objective of this training is to orient all members to the SHG concept and bring out the hidden talents and capacity of all the members. The office bearers of the SHGs (Animator and Representative) are given training in 3 modules for 6 days. The main objective of this training is to enhance the leadership quality, team building spirit and to build their capacity to maintain books of accounts In addition, SHG members who are interested in starting economic activities or develop skills to get self employment are provided skill training. Credit Linkage to SHG's Bank credit is one of the most critical inputs for empowering SHGs and to reduce rural indebtedness. Banks normally extend cash credit of Rs.10,000 to Rs.30,000 to SHGs along with RF subsidy of Rs.10,000 provided by Government. But the quantum of credit extended by banks to SHGs was not adequate to meet the credit requirements of all the SHG members. Therefore Government have taken special efforts to increase the quantum of credit to SHGs and ensure credit is made available to SHGs in multiple doses. Due to the efforts taken by Government, banks in the State have started providing minimum of Rs.50,000 as first linkage and minimum of Rs.1 lakh and Rs.1.5 lakh as second and third linkages respectively. From the inception of Mahalir Thittam, SHGs have been assisted with the cumulative credit linkage of Rs.1, crores only upto March But during the last four years alone, credit linkage to SHGs has touched Rs.6, crores due to the positive interventions made by the Government and the whole hearted co-operation received from the Banks in the State. During , the focus of Mahalir Thittam would be on increasing credit linkages to SHGs, particularly repeat loans and a credit target of Rs.3,000 crores has been fixed for the year YEAR-WISE CREDIT LINKAGE DETAILS Year Achievement (Rs. in Crores) Cumulative (Rs. in Crores) Up to (Upto ) Total 10, Source: TamilNadu Development Corporation-Mahazhir Thittam > RJSSM: Volume: 05, Number: 08, December 2015 Page 218

8 Sustainable Rural development In India, Community Development Programme (CDP) was launched in 1952 with the objective of bringing all round development of the rural areas. This was followed by Natural Extension Service (NES) in These programmes were followed by Intensive Agricultural District Programme (IADP) in 1960, Intensive Agricultural Area Programme (IAAP) in 1964 and High Yielding Variety Programme (HYVP) which brought Green Revolution in the country that resulted in record agricultural productions and productivity. Later, Government introduced many development programmes like Small Farmers Development Agency (SFDA) and Marginal Farmers and Agricultural Labourers Agency (MFAL) for the development of weaker sections. Subsequently area development programmes like Drought Prone Area Programme (DPAP) were introduced to develop the severely drought affecting districts. Hill Area Development Programme (HADP) was introduced to develop hill areas. The objectives formulated during 1979, for Rural Development are given below Maximising production in agriculture and allied activities in the rural areas including development of rural industries with emphasis on village and cottage industries. 2. Generating maximum possible employment opportunities in rural areas especially for the weaker sections of the community so as to enable them to improve their standard of living. 3. Providing certain basic amenities like drinking water, electricity, especially for productive purpose, link roads connecting villages to market centres and facilities for health care and education. Conclusion The above review of literature indicates that most of the studies dealt with the aspects of evolution of SHGs, viability of SHGs, SHG-Bank linkages, financial assistance provided by the NABARD and banks in promoting SHGs etc. However there is a dearth of micro-level studies to evaluate the performance of SHGs, more particularly, the socio-economic conditions of the women SHG members in the pre and post-shg concept and their impact on women empowerment. An analysis of these aspects may provide a comprehensive picture of the SHGs to make them more viable and sustainable. The present study aims to fill in this gap. References 1. Sambat, S.S. (1988): Self Help Groups in Thailand, RURAL FINANCE 1(2), Kropp, E (1989) Linking Self Help Groups and Banks in Developing Countries, Asia Pacific Regional Agricultural Credit Association, Bangkok. 3. Ramanathan, M. (1993): Linking Banks and SHGs Srilankan Experience RURAL FINANCE, October, 1993, PP TamilNadu Development Corporation-Mahazhir Thittam > RJSSM: Volume: 05, Number: 08, December 2015 Page 219