Women s Empowerment through SHGs: Intervention and Imperatives

Transcription

1 Women s Empowerment through SHGs: Intervention and Imperatives Tattwamasi Paltasingh* AbstrAct The emergence of Self-help Group (SHG) is more than two decades old in India. The SHGs have played an important role in hastening the country s economic development.the SHGs are considered to be the vehicle of change for the poor and marginalized. In India the SHG approach is an integral part of all the community development projects. SHGs having mainly women members is an implication that it is meant for women s economic participation that can further contribute country s economic development. Against this backdrop the paper attempts to examine the role of SHG in enhancing women s status. The growth and evolution of SHGs across Indian states is dicussed in the paper. The SHGs may not be an exclusive empowering agency, it can have other stories too. The paper also highlights the SHG-bank linkage and bottlenecks in the implementation of such initiatives.policy measures has been recommended in the concluding section that can contribute to women s empowerment. Keywords: SHGs, India, Growth, Empowerment, Intervention, Women IntroductIon The Self-help group is a method of organising the people to come together to solve their individual problems and it is used worldwide. The poor collect their savings in banks and in return they receive easy access to loans with a small rate of interest to start their micro unit enterprise. The Self Help Groups (SHGs) have emerged as a powerful instrument to alleviate the poverty and to empower the women in the new economy (Gangwar et al, 2004). Self-employment has been an important component of the anti poverty programmes implemented through government * Associate Professor, Sardar Patel Institute of Economic and Social Research, Drive-in Road, Thaltej, Ahmedabad, Gujarat, India. tattwam@rediffmail.com, tpaltasingh@gmail.com

2 55 Social Work Chronicle Volume 3, Issue 1 & 2, 2014 initiatives in the rural areas of India. Bangladesh has been known as a pioneer in the field of micro-finance. Mehmud Yunus, an initiator of an action research project Grameen Bank started this initiative in The Grameen Bank achieved the status of an independent bank in By 1994, this bank was directly serving two million people and the owners of the bank were mostly women (94%). Currently, the Grameen Bank is in a credit relationship with nearly 7.0 million poor people spread across 73,000 villages in Bangladesh. According to the Bank s internal survey, 58 percent of the borrowers have crossed the poverty line. So far, 80% of the poor families have, in some form, received micro-credit from the Grameen Bank. The Grameen Bank has generated a huge multiplier effect in the country with regard to women s organisational abilities and their overall empowerment. It has enabled them to build assets, increase family income, and reduce their vulnerability to economic stress, violence and exploitation. The success of SHGs programme has also led to considerable improvement in the health and nutritional status of women and children. The Bank organises regular workshops in the interior areas of the country to update women s knowledge on issues like dowry, family planning, primary healthcare, nutritional status, clean drinking water, sanitation and children s education. Bangladesh Rural Advancement Committee (BRAC), Association for Social Advancement (ASA) and PROSHIKA are the other principal Micro-credit Finance Institutions (MFIs) operating for over two decades in all the districts of the country (Drushti, 2004). Bolivia, Indonesia and Mexico are some of the other developing countries which have a mature Micro Finance Institution (MFI). In all these countries, micro-finance is used as a synonym for providing financial services to the poor. The goal is to help the poor gain more control over their lives by giving them the same financial services which middle and upper class individuals enjoy. Bolivia has been one of the leaders of the micro-finance movement in South America. Micro-finance in Mexico has adopted a model which works in both rural as well as urban areas, but operates at high interest rates (at least 79% per annum). India has adopted the Bangladesh s model in a modified form. The Annapurna Mahila Mandal in Maharashtra, Working Women s Forum in Tamilnadu and the many National Bank for Agriculture and Rural Development (NABARD) -sponsored groups have followed the path laid down by a trade union of poor, Self-employed Women Workers Association (SEWA) since The NABARD started promoting selfhelp groups on a large scale in The Reserve Bank of India

3 Women s Empowerment Through SHGs: Intervention and Imperatives 56 also allowed SHGs to open saving accounts in banks from 1993, which gave a boost to the SHG movement (RBI, 2009). This movement was nourished in many states of India including Gujarat, Maharashtra, Andhra Pradesh, Rajasthan, Tamilnadu and Kerala. Nearly 465 banks (including 336-Commercial Banks, 113 Regional Rural Banks, 4 Cooperative banks and 12 SIDBI banks) and more than 3, 013 NGOs are actively involved in the promotion of the SHG movement in India (NABARD, 2012). The other developing countries and international agencies are turning to India to learn from its experiments with microfinance and to explore possibilities of replication of the model in their country. EvolutIon of the SHG MovEMEnt In IndIa The micro-finance groups are undergoing significant changes which are Thrift groups; Credit management groups, Income generating groups, Selfhelp groups and Mutual help groups. Today the SHG has been recognised as a decentralised, cost effective and fastest growing micro finance initiative in the world (Ahirrao, 2012). The first decade of the SHG movement was meant to demonstrate the potential of SHGs to organize themselves and be instrumental in managing their own savings and extending emergent micro credit needs. Second decade laid emphasis on establishing the model across the regions, with a focus on poor regions of the country. This decade also witnessed greater confidence among the financing banks. The development planners including the Government of India and the State Governments also recognized the real potential of the SHG movement in the development of the poor and it was made an essential ingredient of all poverty alleviation programmes of the Government. Even the private sectors have started realising the untapped potential of SHGs for deep penetration to the emerging rural markets (Prasad and Singh, 2012). The small beginning of linking only 500 SHGs to banks in 1992, had grown to over 0.5 million SHGs by 2002 and further to 8 million SHGs by The third decade of the programme witnesses the linkage programme with livelihoods support with lot more innovations in the product range. Drastic reforms in leveraging technology have been witnessed that has improved the efficiency, while extending its outreach to more geographical regions, especially the most resource poor regions of the country. The evolution of the SHG federations can be described under six phases i.e. Phase I during which the NGOs promote women SHGs to mainstream financial services to reach the un-reached segments of society. In Phase

4 57 Social Work Chronicle Volume 3, Issue 1 & 2, 2014 II the NABARD takes the lead in partnering with NGOs to pilot the wellknown SHG-bank linkage model. Phase III involves proactive role of the state Governments, particularly in the South, for promotion of SHGs by revolving loan, funds and other support; in Phase IV the SHG-Bank linkage reaches over a million. Phase V involves the emerging SHG federations to sustain the SHG movement and to provide value-added services. In phase VI the SHGs and SHG federations gained widespread recognition to be partners of various mainstream agencies like financial institutions, corporate sector, and government (Reddy et al, 2008). In India, 8 million SHGs of the poor maintain a balance of over 6550 crore in the Saving Bank accounts. More than 4.4 million SHGs are regularly availing credit facilities from the Banks (NABARD, 2011). Initially NGOs pioneered the SHG promotion processes and later the Government has emerged as the largest SHG promoter. Approximately 44% of the country s Bank-linked SHGs were in the southern States. The government has launched a selfemployment program, Swarnajayanti Gram Swarozgar Yojana (SGSY) from April This is a holistic programme covering all aspects of self employment such as organization of the poor into self help groups, training, credit, technology, infrastructure and marketing (VOICE, 2008). The share of the centre and the states is allotted in the ratio of 75 : 25 with regard to the funding of SGSY. SHG IntErvEntIon and WoMEn S EMpoWErMEnt The year 1975 was declared as a year for women. The decade from 1975 to 1985 was declared as a decade for women as the movement for empowerment of women received a great boost highlighting the important role of women s in the society. It was emphasised that woman should get the same opportunities as that to men. The year 2001 was declared as a year of women s empowerment. Efforts were being made in the direction that women should have a role in all walks of life; and special provisions should be made in the budget for activities related to the development of women. Many schemes were planned and started to be executed, at government level, for women s education, laws regarding prevention of atrocities on women, for their economic empowerment etc. The SHGs increase the productivity as well as the credibility of women. In addition the women involved with the SHGs activities play an important role in improving the economic status of their families.

5 Women s Empowerment Through SHGs: Intervention and Imperatives 58 The first organised initiative of self help group was taken in Gujarat in 1954 when thetextile Labour Association (TLA) of Ahmedabad formed its women s wing to organise the women from the households of mill workers. Their aim was to train them in the primary skills like sewing, knitting embroidery, typesetting and stenography etc. It was given a more systematized structure when Self Employed Women s Association (SEWA)was formed in 1972 as a Trade Union under the leadership of Ela Bhatt. She organised women workers such as hawkers, vendors and home based operators like weavers, potters, papad/agarbatti makers, manual labourers, service providers and small producers like cattle rearers, salt workers, gum collectors, cooks and vendors with the aim of increasing their income and assets; improving their food and nutritional standards; and increasing their organisational and leadership strength. In order to broaden their access to market and technical inputs, the primary associations were encouraged to form federations like the Gujarat State Mahila SEWA Cooperative Federation, Banaskantha DWCRA, Mahila SEWA Association etc. In the 1980s, MYRADA (Mysore Resettlement and Development Agency) a Karnataka based non-governmental organization, promoted several locally formed groups to enable the members to secure credit collectively and use it along with their own savings for economically gainful employment. Since 1987 MYRADA has promoted Credit Management Groups (CMGs) with an aim to impart social empowerment to women. The MYRADA promoted affinity, voluntarism, homogeneity and membership limit. Tamilnadu Women in Agriculture Programme (TANWA), 1986, Participatory Poverty Reduction Programme of Kerala, (Kudumbashree) in 1995 and Tamilnadu Women s Development Project (TNWDP) in 1989 gave stronghold to SHG movement in these states. Around 44% of the total Bank-linked SHGs of the country are in the four southern states i.e. Andhra Pradesh, Tamil Nadu, Karnataka and Kerala. These initiatives have led to the consensus that the small group organisation and self-management are powerful tools for socio-economic empowerment of the rural poor, especially the women. SHG S linkage WItH financial InStItutIonS The linkage with banks/financial institutions has provided a facility of pooling of savings and access to credit from the banking system. In addition

6 59 Social Work Chronicle Volume 3, Issue 1 & 2, 2014 it creates a platform for the members of the groups, through which they could launch a number of livelihood initiatives and also facilitate the empowerment process. In India three different models of linkage of SHGs to the financial institutions have emerged. These are: 1. Banks, which themselves form and finance the SHGs. 2. SHGs are formed by the NGOs and other agencies but funded by banks. 3. Banks finance the SHGs with NGOs and other agencies as financial intermediaries. The second model is the most popular model. Almost three-fourths of all the SHGs come under this model. About 20% of the SHGs under the first model and 8% under the third model are covered. The SHG Bank Linkage Programme has come a long way since 1992 when a project involving partnership among SHGs, Banks and NGOs was launched by NABARD. Nearly 4.22 million SHGs have been provided bank credit and the total outstanding loan to them stood at Rs. 22, 680 crore on Almost 90% of these groups are women s groups. The programme has covered more than 8.06 crore poor households, making it the largest microfinance programme in the world. More than 35,290 bank branches of 48 commercial banks, 96 Regional Rural Banks (RRBs) and 352 cooperatives are involved in financing the SHGs. The SHG-Bank linkage programme was started as a test project in 1989 when NABARD sanctioned Rs.10.0 lakhs to MYRADA as seed money assistance for forming credit management groups. Ministry of Rural Development provided financial support to PRADAN to establish Self-Help Groups in some rural pockets of Rajasthan. In 1995, the RBI streamlined the credit delivery procedure by issuing a set of guidelines to Commercial Banks which enabled the SHGs to open bank accounts. The scheme was further strengthened by a standing commitment given by NABARD to provide refinance and promotional support to banks for credit disbursement under the SHG Bank linkage programme. table 1: trends & progress of SHG - Bank linkage programme in India SHGs linked 255 4,757 22,38,525 29,24,973 % women s groups Families assisted (m)

7 Women s Empowerment Through SHGs: Intervention and Imperatives Population covered (m) Banks participating (n) SHG promoting partners (n) ,323 4,896 Districts covered (n) Cumulative bank loan (Rs. Million) ,13,974 1,80,407 Source: NABARD 2008 Table 1 shows that million families and million people having been covered under SHG - Bank Linkage programme and the cumulative loan figure is on However, in the context of the magnitude of poverty prevailing in the country and the overall quantum of the fund flow available under various anti-poverty programs of the Government, only a small number of the SHGs have emerged. nabard Initiatives The corporate mission of NABARD, the Apex Rural Development Bank in the country, was to make microfinance services available to 20 million poor households, or one-third of the poor in the country, by the end of 2008.The number of SHGs financed by NABARD increased to more than 6.20 lakhs in and 6.87 lakhs in Cumulatively, million poor households in the country have been able to secure access to micro-finance from the formal banking system (NABARD, ). Apart from NABARD, there are other major organisations in the public sector which also provide loans to financial intermediaries for onward lending to SHGs. They are Small Industries Development Bank of India (SIDBI), Rashtriya Mahila Kosh (RMK), and Housing and Urban Development Corporation (HUDCO). Microfinance Programme of SIDBI Small Industries Development Bank of India (SIDBI) launched its micro finance programme on a pilot basis in 1994 for delivering credit to the poor and unreached, especially the women. The SIDBI reoriented and upscaled its micro finance programme in A specialised department viz. SIDBI Foundation for Micro Credit (SFMC) was set up with the mission to create a national network of strong, viable and sustainable Micro Finance Institutions (MFIs) from the informal and formal financial

8 61 Social Work Chronicle Volume 3, Issue 1 & 2, 2014 sectors. SFMC serves as an apex wholesaler for micro finance in India providing a complete range of financial and non-financial services to the MFIs. The goal of the National Micro Finance Support Programme (NMFSP) is to bring about substantial poverty elimination and reduce vulnerability in India amongst users of micro-finance services. The NMFSP is being implemented in collaboration with the Government of India, the Department for International Development (DFID), UK and the International Fund for Agricultural Development (IFAD), Rome. The cumulative assistance sanctioned under SIDBI s micro finance initiatives under its various products upto, 2008 aggregates to Rs crore. The SIDBI is focusing on development of microfinance in the weaker States i.e. Uttar Pradesh, Bihar, Jharkhand, Orissa, Chhattisgarh, Madhya Pradesh, Rajasthan and the North-Eastern States. rashtriya Mahila kosh (rmk) The Rashtriya Mahila Kosh was set up by the Government of India in 1993 under the Department (now Ministry) of Women and Child Development to facilitate credit support to poor women for their socioeconomic upliftment. The credit needs of poor women, especially those in the unorganized sector, were not adequately addressed by the formal financial institutions of the country. Thus RMK was established to provide loans in a quasi formal credit delivery mechanism,which is client-friendly, has simple and minimal procedure, disburses quickly and repeatedly,has flexible repayment schedules, links thrifts and savings with credit and has relatively low transaction costs both for the borrower and the lender. The maximum amount of loan that can be given to a beneficiary at a time is Rs. 25,000 for income generation, Rs. 50,000 for house building and Rs. 10,000 for a family purpose (Table 2). A corpus of Rs.31 crore was provided to the RMK at its inception however, this corpus has increased to Rs crore on The Kosh has supported the SHG in many states of the country. The RMK has sanctioned Rs.250 crores and disbursed Rs 197 crore so far. table 2: performance of rmk (as on ) Loans sanctioned Rs.250 crores Loans disbursed Rs.197 crores Recovery percentage Above 90% IMOs (Intermediary Organisations) 1375

9 Women s Empowerment Through SHGs: Intervention and Imperatives 62 SHGs 61,600 Women benefited 6,19,230 No. of nodal agencies 31 Franchises 5 States / UTs covered 25 Ceiling of loan to an individual Source: MoRD, 2010 Rs.25,000/- Income generation Rs.50,000/- Housing loan Rs.10,000/- Family consumption loan The support by the RMK is extended through NGO s, Women Development Corporations, State Government agencies like DRDA s, Dairy Federations, Municipal Councils etc. The process of loan sanction for voluntary organizations consists of five steps i.e. (i) issues of guidelines / inviting applications; (ii) desk evaluation of the proposal; (iii) presanction visit / assessment; (iv) sanction and implementation, monitoring and(v) post- completion reporting. In the year , the organization provided a credit of Rs crores benefiting 34,692 women. private Initiative in SHG development In India there have been a large number of voluntary organisations(ngos) which have facilitated and assisted SHGs in organizing savings and credit. The SEWA in Ahmedabad, MYRADA in Karnataka, Nav Bharat JagritiKendra and Ramakrishna Mission in Jharkhand, and ADITHI in Bihar took the lead in promoting Self-Help Groups with income generation activities using local skills. PRADAN (Professional Assistance for Development Action), DHAN Foundation, ASSEFA (Association of Sarva Seva Farms, MALAR (Mahalir Association for Literacy, Awareness and Rights), SKS, Janodaya, Cohesion Foundation and Jan Chetna Sansthan are some other major non-governmental institutions which are promoting and nurturing a large number of SHGs of poor people, mostly women into effective organisations. Involving the corporate sector and the poor with an emphasis on skill development is another approach to transform the marginalised into successful entrepreneurs (Torawane, 2012). The refore the combined efforts ofthe government and private voluntary agencies have made the SHGs to occupy a place of prominence in the socio-economic fabric of rural India.

10 63 Social Work Chronicle Volume 3, Issue 1 & 2, 2014 relooking SHGS: BottlEnEckS & ISSuES It is assumed by a large number of researchers and policy makers that the economic empowerment of women leads to social empowerment that can be futher translated to other field of development. Issues related to women s health, education, autonomy, income, power, decision-making within the family etc. can have positive impact. However, some scholars and critiques do not consider SHGs as a solution to tackle poverty. According to them the SHGs can be used for local level interventions and development, at the same time it cannot be considered as the only method for women s empowerment and community development. Some of the bottlenecks of the SHGs that have emerged in recent years include an uneven spread of the SHGs across the country, difficulty in taking up issues of gender and social inequality, women s empowerment (Kabeer, 2005), funding pattern of the self help groups etc. Apart from possible delays in the funds passing from the Ministry of Rural Development and State governments to the DRDOs, the banks also hold up the project at any stage for the Self help groups like SGSY. There is no authority to intervene and ask the banks if their decisions affects the progress of work. Proper training to the rural swarozgarisin order to analyse the market opportunities, to impart modern professional skills; and technical expertise to acquire the required tools is also found to be lacking. All these requirements have been ignored in the SGSY. It was repeatedly pointed out by the women that joining the SHGs had increased their workload as the new activities could not generate enough income for them to give up any of their earlier work. Defects in the BPL lists are perhaps the main reason for proving any poverty alleviation programmes to be ineffective and SGSY is no exception. All projects for helping the poor at the grassroots are implemented as per the BPL lists. There is need to consider decentralizing the SGSY so that each region get the authority to modify the use of the funds to its problem of poverty and the poor. There is a need for more awareness generation among the potential beneficiaries about the scheme and its contents as well as the authorities in charge and their responsibilities. So that the targeted population can seek help and question authorities if the latter fail to deliver the benefits to the needy and genuine people.

11 Women s Empowerment Through SHGs: Intervention and Imperatives 64 conclusion Rural India faces several problems due to poverty, illiteracy, lack of skills, health care etc.these problems can be solved through group efforts like the Self Help Groups.The Government of India supports the Self Help Groups with an objective of bringing every assisted family above the poverty line. The SHG Movement has evolved to a significant level since last two decades in India. The SHG across the country is institutionalized by SHG-Bank linkage program. Initiatives by various financial institutions like NABARD, Rashtriya Mahila Kosh (RMK), SIDBI and several other Private Initiative which have contributed towards the SHG progress in the country. Despite many initiatives, there are several issues which need to be tackled for better implementation of the microfinance initiatives in India. Provision of an adequate knowledge and training to the members of Self Help Groups, more transparent & speedier funding from the banks, provision of capacity building and other necessary inputs by promoters to the SHGs, right identification of BPL individuals are some important issues which need serious attention for the success of Micro finance initiatives and benefits of SHGs. Addressing issues of women through SHGs have certainly positive dimensions. However the scope of SHGs as an empowering agency should go beyond financial issues. Gender inequalities are deep rooted and may not have immediate solution. Women need to be liberated from household responsibilities or as sole home makers. Women s reproductive role at home need to gain due recognition. Apart from financial independence through emergence of micro-finance institutions, they should have independence in other social spheres also. They can have equal share in decision making and access to resources. SHGs can act as an empowering agency that can develop self-confidence and liberate women from daily struggles. Addressing various developmental issues of the poor women especially in the rural areas and challenging the social structures are to be achieved for the empowerment of women. Serious efforts in this direction can actually contribute towards the socio-economic upliftment of the deserving women.

12 65 Social Work Chronicle Volume 3, Issue 1 & 2, 2014 references Ahirrao, J. (2012). Capacity building of rural poor through microfinance: Role of institutions. In Biju M.R (Ed) Rural Development under Decentralized Governance. New Delhi: Concept Publishing Company Pvt. Ltd. Drushti: Stree Adhyayan Prabodhan Kendra. (2004). An Evaluation of Impact of SHG on the Social Empowerment of Women in Maharashtra. New Delhi: National Commission for Women. Gangwar, M., Kanpekar, N., Mandal, M. K. & Kandekar, P. (2004). Empowerment status of rural women: Insights from dairy cooperation. Social Change, 34(1), Kabeer, N. (2005). Is Microfinance a Magic Bullet for Women s Empowerment? Analysis of Findings from South Asia. Economic & Political Weekly, October, (pp ). MORD. Ministry of Rural Development. (2010). Annual Report , Department of Rural Development, Government of India accessed from NABARD. ( ). Retrieved from NABARD. (2008, 2011, 2012). Annual Reports. Retrieved from www. nabard.org. RBI. (2009). Reserve Bank of India Retrieved from Prasad B.G. & Singh, R. J. (2012). Self Help Group- Micro Credit Linkage for Rural Development in India. In Biju M. R. (Ed.) Rural Development under Decentralized Governance. New Delhi: Concept Publishing Company Pvt. Ltd. Reddy, A. R. (2008). Self-Help Groups in India - A Catalyst for Women Economic Empowerment and Poverty Eradication. Paper Presented at 33 rd Global Conference of ICSW, France. Torawane, M. (2012). Gujarat Livelihood Promotion Company. Quarterly Magazine. VOICE. (2008). Voluntary Operation in Community & Environment. A Report on the Success and Failure of SHG s in India- Impediments and Paradigm of Success. Planning Commission, Government of India.