SCARCITY REDUCTION THROUGH WOMEN SELF- HELP GROUPS IN METTUPALAYAM, COIMBATORE DISTRICT

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1 Volume 119 No , ISSN: (on-line version) url: ijpam.eu SCARCITY REDUCTION THROUGH WOMEN SELF- HELP GROUPS IN METTUPALAYAM, COIMBATORE DISTRICT Dr.S.Arunkumar 1, Dr.D.Sathishkumar 2,Ms.C.E.Shwethamala 3 1 Assistant Professor, Department of Management Studies, School of Management, Sri Krishna College of Engineering and Technology, Coimbatore, Tamilnadu , INDIA drarunkumars@skcet.ac.in 2 Assistant Professor, Department of Management Studies, Sankara Institute of Management Sciences, Saravanampatti, Coimbatore, Tamilnadu , INDIA sathish.mailme@yahoo.co.in 3 Management Scholar, Department of Management Studies, School of Management, Sri Krishna College of Engineering and Technology, Coimbatore, Tamilnadu , INDIA 17epmb096@skcet.ac.in ABSTRACT: The present study is an attempt to analyse the role and performance of SHGs in promoting women's empowerment in Mettupalayam, Coimbatore district. The broad objective of the study is to analyse the operating system of SHGs for mobilization of saving, delivery of credit to the needy, management of group funds, repayment of loans, in building up leadership, establishing linkage with banks and examine the social benefits derived by the members. In order to collect and gather primary data, structured questionnaire survey methods were employed. Here the researcher has chosen 15 SHGs with 250 members. The study reveals that SHGs had set a new agenda for financial intermediation by banks in the form of micro-credit. By the formation of SHGs, credits are demanded for various purposes (domestic, health, festivals, repayment of old debts, investment, etc.).habits of savings, economic independence, self confidence, social cohesion, asset ownership, freedom from debt, additional employment, etc. benefits are derived by the SHG members. Thus, SHGs have served the cause of women empowerment, social solidarity and socio-economic betterment of the poor for their consolidation

2 Keywords: SHG: Shelf Help Group,NGO: Non-Governmental Organisation,MFI: Micro finance Institution, Pre-SHG: Before joining Self Help Group Post-SHG: After joining Self Help Group INTRODUCTION: The issue of micro finance to a person or a group of persons has become a topic of interest in the Indian finance industry and economy in general. This interest is as a result of the growing awareness both nationally and internationally, in order to have major impact in the economic development and scarcity reduction of any country. Robust economic growth cannot be achieved without putting in place well focused programs to reduce scarcity through empowering the people by increasing their access to factors of production, especially in credit. The latent capacity of the poor for entrepreneurship would be significantly enhanced through the provision of micro finance services to enable them engage in economic activities and be more self reliant, increase employment opportunities, enhance household income and create wealth. This paper attempts to study the impact of microfinance through Self- Help Groups(SHGs) on women in Mettupalayam,Coimbatore district. The total sample for the study consisted of 250 members involved in tea plantation activity. The study compared the socio-economic conditions of members in the pre and post-shg situations. Over the years many research findings concluded that there were positive impacts of over-all socio-economic growth participation as a result of SHG-based microfinance interventions. At the same that there were evidences that all the SHGs based solely on NGO s were disorganised at the later phase as a result of exhaust of donor fund. The current study is based on the SHG based on the Bank linkage and their growth due to the constant availability of funds and peer motivation. ABOUT SHG: A Self Help Group (SHG) is a village-based financial intermediary usually composed of local women. Most self-help groups are located in India, though SHGs can also be found in other countries, especially in South Asia and Southeast Asia. Members make small regular savings contributions over a few months until there is enough capital in the group to begin lending. Funds may then be lent back to the members or to others in the village for any purpose. In India, many SHGs are 'linked' to banks for the delivery of microcredit The SHG is a viable alternative to achieve the objectives of rural development and specially women empowerment. Through the SHG, the micro credit is disbursed to rural women for the purposes of making them enterprising women and encouraging them to enter entrepreneurial activities. Credit needs of rural women can be fulfilled totally through the SHG. The group members save a regular amount of $.50 to $. 100 every month. The group rotates the money to the needy members fro various purposes at a specified interest rate. As the repayment is cent percent and the recycling is fast, the savings amount increases rapidly owing to the accumulation of income from interest. The savings habit helps the members to escape from the clutches of money lenders. It paves the way for the empowerment of women and build confidences in them

3 to stand on their own feel. After the group stabilizes over a period of six months or more in the management of its own funds, it conducts regular meetings, maintains savings and gives loans to members on interest. The SHGs are linked with the banks for external credit under the projects of rural development. The borrowers repay the bank loans properly. OBJECTIVES: To compare the income, savings and women empowerment before and after joining SHG. To study their loan acquiring methods. To estimate the knowledge level and the various impacts on the life of women after joining SHG. MATERIALS AND METHODS: This is a descriptive study explaining the role of SHG in the society and in improving the Economic and Social status of the women in the Mettupalayam region. Here, a convenient sample size of 250 SHG members are taken. The members belong to tea plantation category, their socio-economic background and their personal profile differ from each other. A questionnaire is prepared to collect the required data from the respondents and various statistical tools were applied on these primary data. ANALYSIS: Paired t test is applied to judge whether there is any significant improvement in the income and savings of the respondents after joining the SHG. Garrett s Ranking is applied to find out the primary reason for joining SHG and primary purpose of savings. FACTOR Analysis is applied to find out the vital areas in which the respondents status is improved after joining the SHG. To find out whether change in the employment after joining SHG, has influenced the respondents perceived satisfaction level in their life style ANOVA Technique is applied RESULTS AND DISCUSSIONS: A representation, either in a graphical or tabular format, which displays the number of observations within a given interval. The intervals must be mutually exclusive and exhaustive. Frequency distributions are usually used within a statistical context. The following table consists the personal details of the members of the Self-Help Group belonging to the Mettupalayam,Coimbatore district. Table No:1 PERSONAL DETAILS OF MEMBERS 1.Age of the member Freq Percent 2.Marital status: Freq Percent 3.family size: Freq Percent years unmarried members years married members above 46 years widow 10 4 above 6 members total total total

4 4.Educational status: Freq Percent 5.Type of family: Freq Percent under graduates joint family nuclear HSC(+2) family SSLC(+10) total Below SSLC Illiterate 15 6 total The concept of SHG was known to people of those region very recently. They have been in existence for the past 10 years. Majority of the respondents belong to the age group of above 46 years. This shows that the older generation are the active participants of the SHG whereas the current consider to diversify to alternative fields. Majority (79.6 percent) of the women are married and their educational status is SSLC(+10) (35.6 percent), belong to Joint Family (79.6 percent) and the family size of above 6 members (63.2 percent). Through this it is inferred that the Joint Family system is still practised in the Mettupalayam region. The people here are attaching so much value to the Joint Family system. The above table indicates that in the Pre-SHG group the majority members (61.6 percent) were in the ` category followed by (38.4 percent) members under ` category. No members were in the category of above `1550. The Post-SHG table reveals that there was a paradigm shift in the income level of above `1550. The majority members (77.6 percent) in their Post-SHG were in the above `1550 category. There were no members in the top category of income level in the pre- SHG and no members in the bottom category of Post-SHG. All the respondents have a bank account and among the above listed banks, majority(25.6 percent) of the members have their account in INDIAN BANK followed by CO-OPERATIVE BANK with 24.8 percent of holders. The bank which has the minimum number of holders is ICICI BANK with only 2 percent of the respondents. Majority of the bank account holders prefer Savings account with 92.4 percent of respondents. The reason for preferring savings account to fixed account is that they are easily withdrawable and the also avail interest rate for their savings. The maximum interest rate offered by majority of the banks for their savings is 9%. Through this it is inferred that the people of Mettupalayam region prefer Public sector banks than Private Sector banks. Table No:4 SAVINGS AMOUNT PER MONTH: PRE-SHG Freq Percent POST-SHG Freq Percent No Savings No Savings 0 0 ` ` ` ` ` `

5 total total In the Pre-SHG phase 90percent of the respondents made No Savings and 10percent made savings of `50 per month, but in the Post-SHG phase 72.8percent of respondents saved `100 and 27.2percecent saved `200. It is inferred that there is a remarkable improvement in the savings pattern of the sample respondents in the Post-SHG. Loan Details: Any individual is subject to loan and it is generally taken to satisfy during the times of emergency. The loan is taken when their earnings are not sufficient. The following tables are the loan details of the SHG members. it is inferred as, Cent percent of the respondents have taken loan from bank & others, 86percent of the respondents are liable for the loan amount of `9500 & above, 9.2percent of respondents of `6500 and 4.8percent of respondents of `3500. Thus it is inferred that people of Mettupalayam region are not only dependent on Bank but are also dependent on other sources of finance(small hand loans).since the loan is availed from bank as a group, all the members of the SHG are subject to hold loan from the bank but it is exceptional for them to take loan from other sources. Job profile before and joining SHG Following are the occupational details of the respondents before and after joining the SHG Table No:6 Job profile before joining SHG Description Freq Percent labourer agriculture self employed total Majority (64 percent) of the respondents belong to agriculture category before joining the SHG. They were basically tea-estate workers based on monthly wages before joining the SHG.There were also 28.4 percent of respondents belonging to labourer category and 7.6 percent of respondents belonging to self-employed category. But all of them moved to Tea Plantation (agriculture) after joining self help group because of the various schemes and facilities provided by the government. Most of the respondents basically had a small area of land and grew tea or any other vegetables and they did not yield much of income. So they had to lease them to large tea growers and work with them for wages. But after joining SHG, the members of each group combined their land yields and sell the tea leaves to tea factories and shared the income generated. The loan amount availability is generally high when in SHG and no collateral is been required. Government has provided them free Stock room for

6 storage of tea leafs and vehicle for free transportation to the respective tea factory Monthly Return and Repayment Since all the members of the SHG availed loan as a group they are subject to monthly repayment of interest to the Bank. The following is the details of their monthly return from their tea plantation and their loan repayment. The average monthly return from their plantations is `1000 (ie:81.6 percent) and the average monthly repayment of their debt is `275(ie:100%).The repayment amount is fixed since the loan is taken as a group. Revolving Funds The term revolving fund means a fund established for a certain purpose, such as availing loans, with the stipulation that repayments to the fund may be used for the same purpose. Table No:8 Revolving Funds 1.Do you get loan for revolving funds? Freq Percent yes no Total if yes, state the purpose: Freq Percent to invest in present business for children education to repay money borrowed from outsiders to meet emergency needs to meet household expenses Total The revolving fund is generally acquired for various purposes. It is basically acquired to solve the current and emergency needs. Here, 86 percent of the respondents gets loan for revolving fund. The SHG members use the revolving funds mostly for their children education (30.4percent), followed by to meet any emergency needs (27.2percent). SHG: Group size The Group size is the number of members in each group. The thumb rule of size of the group is minimum of 12 members and maximum of 20 members and each group differ from each other. The concept of SHG moulds women as responsible citizens of the country achieving social and economic status. Table No:10 Group Size 1.No of members Freq Percent total Group size Freq Percent stable

7 increased decreased total Position in the group Freq Percent president 15 6 representative nd representative 15 6 ordinary member total The SHG group generally consist minimum of 12 members and maximum of 20 members. Generally, the group is stable. From the above table it is understood that,the group size is considered to be stable with 59.6 percent. Each group consist of a leader,representative,2 nd representative and ordinary members. In the present study 15 SHG s were considered. The main role of a leader is organising and initiating the group. The representatives are assigned for all the monetary aspects. Meetings: A meeting is a gathering of two or more people that has been convened for the purpose of achieving a common goal through verbal interaction, such as sharing information or reaching an agreement. In the case of SHG, meeting is a necessity to derive a common conclusion which benefits all the group members. it is understood that, the meeting is generally organised by the leader and it is conducted once in a week. There would be frequent meetings only during exceptional cases. Not all the members attend the meeting but the proceedings of it has to be intimated to all the group members. All the decisions are taken by consensus Impacts on members socio-economic status: The following table enumerates the effects or the impacts on the members socio-economic status after joining the SHG. Table No:14 Impacts Impacts on members socio-economic status: Same(freq) Percent Increased(freq) Percent Mobility Recognition in family Recognition in community Interaction with outsiders Education level Access to health servicces Access to Sanitation facility Access to credit sources

8 Asset building Family income Level of skills Voicing your concern Family planning awarness Individual Income From the above table it is concluded that all the respondents socioeconomic status has been increased with a minimum of 75 percent and there has not been any decrease in the above said components. There has been major increase in their level of skills(90.4 percent) followed by access to credit sources(87.2 percent) but as far as education level is concerned it remains more or less same even after joining SHG s. Therefore it is suggested that the Government has to take appropriate steps in this regard. ANALYSIS AND INTERPRETATION: Women empowerment aims at enabling them to realise their identities, potentiality and power in all spheres of their lives. The real empowerment of women is possible only when a woman has increased access to economic resources, more strength and course for entering into the power structure, more involvement through social relationships and participation, more selfmotivation and confidence, and more say in the family matters. Women should be willing to take additional effort for building a mind set which is suitable for their overall empowerment. It is a gradual and consistent process which requires the support of many who cure related to them in one way or other. Various Statistical tools are used to measure the growth of the members after joining the SHG Confidence Interval: The confidence interval is computed to find out the range within which the mean values of the variable would fall. Table No:15 Confidence Interval: Description Mean Std.Error C.I- Lower limit 8 C.I- Upper limit Pre-income Post-income Pre-savings Post-savings Monthly return The income of the members before joining SHG lie between and after joining SHG is There is a significant increase of income between the SHG members after joining SHG. The savings of the members before joining SHG lie between 3-7 and after joining SHG is There is a significant increase in savings pattern between the SHG members after joining SHG. The average monthly return(earnings) of the SHG members fall in the range of

9 Paired t-test: The paired t-test is used when the variable is measured on same sample units. It is used to compare the means of two variables whether they differ significantly or not. In the current study the t-test is applied on the variables income, savings, decision making and role of women in society to find out whether there is any significant change after joining SHG. Table N0:16 Paired Samples Test Paired Differences Mean t df Sig. (2-tailed) Pair1 Pair2 Pair3 Income Pre-SHG and Post-SHG Savings Pre-SHG and Post-SHG Decision Making Pre- SHG and Post-SHG E E E-152 Pair4 Role of women in society Pre-SHG and Post-SHG E-183 Income pattern: The mean values of the income earned by the respondents before and after joining the SHG is been compared Null hypothesis: The members earn on an average same level of income before and after joining SHG Alternative hypothesis: The members do not earn on an average same level of income before and after joining SHG. Test: Since sig(p)= 2.96E-89 which is < 0.05, the level of significance the Null hypothesis is rejected. Comparing the mean value it is concluded that the SHG members get significantly higher income after joining SHG. Savings pattern: The mean values of the savings made by the respondents before and after joining the SHG is been compared Null hypothesis: The members save on an average same level before and after joining SHG Alternative hypothesis: The members do not save on an average same level before and after joining SHG. Test: Since sig(p)= 2.37E-111 which is < 0.05, the level of significance the Null hypothesis is rejected. Comparing the mean value it is concluded that the savings of the SHG members have significantly increased after joining SHG. Decision making: A comparison of the mean values of decision making skills of the respondents before and after joining the SHG is made

10 Null hypothesis: The decision making skills of members are on the same level before and after joining SHG Alternative hypothesis: The decision making skills of members are not on the same level before and after joining SHG Test: Since sig(p)=2.65e-152 which is < 0.05, the level of significance the Null hypothesis is rejected. Comparing the mean value it is concluded that the level of decision making skills of the SHG members have significantly increased after joining SHG. Role of women in society: A comparison of the mean values of role of women in society before and after joining the SHG is made. Null hypothesis: The role of women in the society are on the same level before and after joining SHG Alternative hypothesis: The role of women in the society are not on the same level before and after joining SHG Test: Since sig(p)= 6.20E-183 which is < 0.05, the level of significance the Null hypothesis is rejected. Comparing the mean values it is concluded that the role of women in the society have significantly increased after joining SHG Garett s Ranking: "Ranking" refers to the data transformation in which numerical or ordinal values are replaced by their rank when the data are sorted the ranks are assigned to values in ascending order. Based on the Garett s ranking method the main purpose of savings and the reasons for participating in SHG have been ranked accordingly. In this method the SHG members were asked to rank the main purpose of savings and the reasons for participating in SHG. The orders of merit given by the respondents were converted into ranks by using the following formula. Percentage Position=100(Rij-0.5) Nj Where, Rij=Rank given for i th item j th individual Nj=Number of items ranked by J th individual The percentage position of each rank thus obtained was converted into scores by referring to the table given by Henry Garrett. Then for each factor the scores of individual respondents were added together and divided by the total number of respondents for whom the scores were added. These mean scores for all the factors were arranged in the order of their ranks and inferences were drawn. Table No:17 Main Purpose Of savings DESCRIPTION SCORE RANK Food Securities Education Medical Asset Building Marriage Festivals Emergencies

11 From the above table, the main purpose of savings has been ranked as follows:rank:1 has been assigned to emergencies,rank:2 to festivals and rank:3 to children education. The least ranking of Rank:7 is assigned for asset Building purpose. Table No:18 Reasons for participating in SHG DESCRIPTION SCORE RANK Poor Income Death of Husband Unemployment NGO'S Intervention Desire to become independent Advice of the family Previous business experience Social security From the above table, the main reason for participating in SHG has been ranked as follows:rank:1 for desire to become economic independent,rank:2 for advice of the family and rank:3 for previous business experience. The least ranking of Rank:8 is assigned to Death of husband. Factor Analysis: The factor analysis is a set of techniques which, by analysing correlations between variables, reduces their number into fewer factors which explain much of the original data more economically. The subjective element of factor analysis could be reduced by splitting the sample randomly into two and extracting factors separately from both parts. Communalities Measures the percentage of variance in the original variables that is captured by the combination of factors. The communalities in the table shows the three factors seem to capture the underlying dimensions involved in these variables. Table No:19 Communalities Initial Extraction Recognition in community interaction with outsiders access to health services access to credit sources Asset building Family income family planning awareness Table No:20 Total Variance Explained

12 Component Initial Eigenvalues Total (Eigen Value) % of Variance Cumulative % Cumulative % Only two eigen values are more than one and these two extract 53.9%(54%) of variance from the data. Hence two factors are determined from the analysis. These two factors are explained with the help of rotated factor matrix given below. The rotated component matrix give the two factors extracted from the variables/components under study Table No:21 Rotated Component Matrix Component 1 2 access to health services interaction with outsiders family planning awareness Recognition in community Asset building Family income access to credit sources The various impacts on members status after joining SHG has been categorized into two major groups as Social and Economic status using the Factor Analysis. The components that fall under the social status are access to health services, interaction with outsiders, family planning awareness and recognition in community. The components that fall under the economic status are asset building, family income and access to credit sources. CONCLUSION: The SHG based microfinance programmes in Mettupalayam, Tamil Nadu have a positive impact in the growth of income, savings and the socio-economic status of the members. Forming the SHG have highly facilitated them to seek loan from the bank and helps them to be economically Independent and has also emphasised the importance of savings. The role of women in society and their Decision making power has a positive growth after joining the SHG.There has also been considerable increase in the perceived satisfaction level among the members due to SHG formation. The Government should take necessary steps in providing informal education to the SHG members. Though there is no drastic change in the livelihood of the members, joining the SHG has benefitted them to be economically and socially independent

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