CHAPTER – II

PROFILE OF THE STUDY AREA AND SELF HELP GROUPS

PROFILE OF THE STUDY AREA

For the purpose of study Namagiripet block in Rasipuram Taluk of

Namakkal District is selected. The Namagiripet Block is surrounded by Rasipuram

Block on the western side, Sendamangalam Block on the southern part,

Thammampatty Block on the eastern side and Valapadi Block on the Northern

side. Their were 368 Self Help Groups formed upto 31st December 2005.

Total number of women, members are 6624. Of 368 Self Help Groups,

Groups especially for Scheduled Caste comes to 115, for Scheduled Tribes 27 and

other communities 226. Among the members 1955 members are from Scheduled

Caste, 486 from Scheduled Tribe, other community 4151, and the minorities

members 32.

FINANCIAL ASSISTANCE RECEIVED

The Self Help Group scheme has been introduced in the year 1991. Of the

total 368 groups were sanctioned a loan amount of 4,64,40,000/- rupees. 112

groups have received SJSY revolving fund for the tune of rupees 11,20,000/- 45
groups received the THADCO revolving fund of rupees 4,50,000/- 52 groups

received SGSY economic activity assistance of rupees 88,75,000/- 4 groups

received economic activity assistance under THADCO Scheme to the tune of

rupeess 6,00,000/- The total savings of all the groups have reached the level of

4,63,25,600/- rupees from the inception.

The following trainings were given to the members of Self Help Groups in

Namagiripat Block.

1. Self Help Group members training.

2. Animaters and Representatives training.

3. Entrepreneurship Development programme training.

4. Vocational training programme.

Under the Self Help Group members training all the members in 368 groups

have completed the Ist module of the training programme which impart the

knowledge about the importance of Self Help Group. Learning and Educational

development which is the thrust area of the IInd module has been completed by

all the members of the 368 groups. IIIrd module namely is meant for providing

knowledge about the political development of the state. This has been

completed by 335 groups. The Ist , IInd and IIIrd modules of Animaters and
representatives training has been completed by 360 groups whereas 335 groups

have completed the training on environmental, protection which is the IV th

modules of the programme.

EDP TRAINING

Training under Mahalir Thittam is provided for 1470, THADCO trained

1260 members, the District Industry Center has trained 450 members and lastly

the District Rural Development Agency has given training for 840 members. Of

the 368 Self Help Groups in Namagiripet Block 52 groups have been provided

with economic activity loan under SJSY Scheme as follows under 50% subsidy

scheme.
 No.of Amount Sanctioned
S.No. Purpose
Groups (in Rs.)

1 Goat Rearing 5 8,75,000/-

2 Mlilch Animal 7 12,25,000/-

3 Grocery Shop 6 10,55,000/-

4 Coir Rope Making 7 12,25,000/-

5 Pappadam Making 3 5,25,000/-

6 Power Looms 4 8,00,000/-

7 Marriage Stores 3 6,00,000/-

8 Chappal Making 3 5,25,000/-

9 Mat Weaving 10 13,45,000/-

10 Arecanut Leasmat 4 7,00,000/-

TOTAL 52 Groups 88,75,000/-

Under vocational training programme 60 members were trained for making

paper cups, 160 members were trained for making massala powder, 120 members

were trained with skills for making milk products, 630 members were imported

skills for tailoring, 390 members were trained for making gunny bags (Jute Bags)

and 90 members were trained with the skills of repairing cycles.

 The following meetings were conducted periodically as per the directions

and stipulations of the Self Help Groups.

1. Group meeting.

2. Cluster level federation meeting.

3. Block level co-ordination committee meeting.

4. Auditing and grading committee meeting.

5. Block level bankers committee meeting.

6. SJSY committee meeting.

Auditing was undertaken periodically and the audit of functions and activities

have been completed for the year 1.4.2004 to 31.3.2005.

As per the analysis and recommendation of the audit and grading committee,

227 groups are graded with A, 48 with B Grade, 12 with C Grade, 34 group with D

Grade. The other groups are yet to be graded.

PROFILE OF SELF HELP GROUPS

GROUP FORMATION

Group formation will be preceded by a village level household survey,

which will provide the base-line data. This should be conducted by Non-

Governmental Organizations, for which techniques like Social Mapping,

Participatory Rural Appraisal (PRA) / Participatory Learning & Action (PLA) and

Wealth Ranking should be used to identify the poorest habitations in every

Panchayat, the poorest households in such poor habitations and the most

disadvantaged women among these households. These women would be the target

group for the project.

To facilitate sustainability the size of the groups should be in the range of

12-20. In no case should the group size exceed 20. The age group for the

membership will be 21 to 60. The members should all be married women.

Preference will the given for the poorest women amongst the target group, with

focus on widows, divorcees, deserted, handicapped women and women belonging

to SC/ST and other socially backward communities. In any case all members must

be below the poverty line. Also the poorest habitations identifyed by social

mapping shall be covered first.

GROUP MEETINGS

The group must meet every week for savings and repayment collections and

every fortnight for discussing all other matters in addition to savings and

repayment. In certain cases the meetings can be once in 10 days for both savings

and repayment and other matters, instead of weekly and fortnight. In no case must

group meetings be held less frequently than once in 10 days.

Group meetings need to be conducted with a certain discipline in relation to

regularity, time and items to be discussed. There needs to be a fixed day / date

every week / 10 days, on which day and time the meeting is to be conducted. Any

member, including the animator / representative, who without prior intimation to

the group, either does not turn up or turns up late, is to pay a fine as imposed by the

group. It has ranged from Rs. 1/- to Rs. 5/- in different groups for coming late, and

Rs. 5/- to Rs. 10/- for missing a meeting. This fine would not only bring in a

discipline but would also add to group common fund resources.

GROUP MAINTENANCE FUND

To supplement the group fund, an amount of Rs. 15/- per member is to be

collected initially on group formation, which will be in addition to the group

savings. This will cover the cost of stationery, rubber stamps, register, postage etc.

After six months another one time collection of Rs. 10/- is also to be made.

The member of the group should also contribute a minimum of Rs. 2/- per

month per member as Group Maintenance Fund. This could be utilised for certain

purposes like TA for bank visits, purchase of stationery items, etc.

The group would also receive a three-year support to the group maintenance

fund for enabling the group to meet costs of travel/food to attend BLCC meetings,

auditor’s fees for annual auditing of accounts, attending other meetings, payment

of honorarium to animator, etc.

GROUP SAVINGS

The group members must be encouraged to save as much as each can

without it being a uniform amount for all. SHG’s starting with fixed savings can be

motivated to switch to optional savings (subject to a minimum saving). This is

especially relevant as most SHG members have seasonal employment and can

make up for poorer savings during lean season with higher savings during

employment season by adopting optional savings. Regular weekly saving is the

most important factor that determines the speed of growth leading to quicker
sustainability NGO’s must continuously motivate SHG’s to increase the frequency

of savings so that they adopt weekly savings over a course of time. NGO staff must

also motivate SHG members to raise their savings amount, as and when it appears

that the members have improved their income levels. However, the SHG would

debate and decide on what is best for them. There should be no compulsion by the

NGO leading to dropout of poorer members.

GROUP COMMON FUND

The groups would receive funds in addition to savings and maintenance fund

amounts, such as fines imposed by them on members, grants from the NGO, CDF,

bonuses for various programmes, service charges on external loans etc., which

should be put in the group common fund. The service charges to be charged on

external loans can be left to the discertion of the group. Therefore, if an external

loan is received by the group at 12%, the members would get it at minimum of

20% or such higher rate of interest as decided by the group.

GROUP RESERVE FUND

The Group Reserve Fund is an essential aid for sustainability. This will be

created from the inception of the group by keeping aside 50% of interest earned on

Sangha loans. The primary use of the group reserve fund will be for meeting

contingencies like genuine defaults on external loans by the group members. In

order to prevent this from becoming a disincentive for repayment, 10% and 15% of

the total nett interest accumulation (after deducting the interest paid to banks /

NGO’s on external loans) can be distributed as dividend to the non-defaulting

members from the third year onwards while retaining the amount required for

contingencies.

ROTATION OF GROUP FUNDS

All savings and common fund would be rotated amongst the members at

rates of interest to be decided by the group. It usually varies between 2% and 3%

p.m. To whom the Sangha loan should be given is also a group decision. This

Sangha loan would enable the members to meet their small consumption and

productive needs without having to go to the money-lender or bank or co-operative

society.
 Internal loans should not be given to more than 10 members at any given

point of time, except in extraordinary situations. Request of a second loan before

clearing the first loan from the group should not be admitted. However, the group

can decide regarding both these points based on the circumstances.

ANIMATORS & REPRESENTATIVES

The Animators will be from the local village and must necessarily be a

resident of the village. The animator should preferably be literate and must possess

certain leadership qualities. She must be in a position to take on the role of a trainer

for the group members in certain aspects of their daily life and group functioning,

based on the training that would be given to her. In short, she must be a role model

and a change agent for the groups and for the village as a whole. It is therefore

necessary that she should not be a defaulter of bank loans herself. She should also

not be an office bearer of any other organisation, so that there is greater loyalty and

commitment to the SHG. She should be the locus for free and democratic

functioning of the SHG.

 Two Reperesentatives are nominated by the SHG from amongst members,

rotated on a yearly basis, to ensure carrying out certain tasks listed in the earlier

chapter.

The animator’s position must be rotated amongst the representatives once

every two years. She will facilitate a smooth switchover of responsibilities in the

above process. She will also assist the representatives to learn the role of the

animator to facilitate handover of responsibilities as and when required.

Opening of Accounts, Operation and accessing Institutional Credit

1. Self Help Groups (SHG’s) should immediatley open bank accounts on

formation in order to ensure safe and transparent transactions. This account

may be opened in any bank of their choice depending upon their

convenience and proximity since the service area norms are not applicable to

the SHG loans being advanced by nationalised banks with NABARD re-

finance assistance. This is an important activity and will help in safe

handling of SHG funds.

2. It is recommended that every SHG member go by rotation to the bank in

order to learn banking transactions and to ensure exposure and development

of all SHG members. This also results in SHG transactions and accounts

becoming transparent to all members.

3. It is also recommended that all receipts in every meeting be credited into the

bank account on the same / next day and withdrawals made by cheque on the

same day, so that there is transparency in accounts, greater confidence on the

part of the bankers and for ease of auditing.

4. Sanction of credit from federations should not impede or stop internal

rotation of SHG funds in any way. Only when SHG’s do not have sufficient

internal funds or when the loan size is large or the purpose is for a non-

economic use such as housing should federations step in with credit, and that

too only based on eligibility for credit.

5. SHG credit guidelines have been evolved in consultation with bankers and

they have been approved by State level Bankers Committee in July 1999.

These guidelines would be very helpful for bankers to rate and assess credit

limits to SHG’s NGO’s are also expected to follow the same norms for

lending from RMK or other funds.

Books and registered to be maintained by SHG’s

The following books and registers have to be maintained in every group:

1. Attendance register

2. Minutes book

3. Savings ledger

4. Loan ledger

5. General ledger

6. Cash book

7. Individual pass book

8. Receipt book

9. Payment Vouchers

The above books and register will have to be maintained and updated on a

regular basis for which the primary responsibility will rest with the animator. The

first set of books and registers will be supplied by the PIU. NGO’s may ensure that

the double entry book-keeping system suggested is followed strictly. This, though

difficult in the early months, will pay rich dividends in the later years, when the

transactions in each SHG rise to large levels. An accounts manual has been

developed in Tamil for use of field workers.

TRAINING

Since this project is basically a human resource development project training

is being given top priority. Certain topics of training will be imparted through the

animators / representatives to the groups while some other topics will be imparted

directly to the groups.

Apart from the animator, two representatives from each group will also be

imparted specific training in year one, along with the animator and thereafter 2

representatives would be trained by rotation for the next 3 years.

In addition to regular training, refresher training will also be provided to the

animators and representatives.

Specific performance teams would be formed for specific topics of group

training where the audio- visual media would be used and films shown songs sung,

dances, dramas and puppetry etc., performed.

Training of NGO staff, PIU staff, block level staff and bank staff has also

been provided for.

 Besides the above cluster level and block level workshops, study tours have

also been planned under the project.

The training manual for use on the project details the training programmes

and modules. There would be a Training of Trainers (TOT) programme conducted

by resource persons for the NGO’s trainers will the help of the manual.

COMMUNICATION

As an aid to sustainability there should be an effective communication

component. As an essential part of it, there would be a periodical newsletter for

sharing of experiences. The newsletter would be at the state level. The magazine

MUTRAM has completed 17 months of successful existence. NGO field staff may

ensure that the magazine is loudly read in all meetings and ideas debated by the

SHG for adoption. NGO staff should also use Mutram to highlight the excellent

work done by any SHG. SHG’s may be motivated to subscribe to the magazine.

In addition, other films of use would be shown and documentation of use on

the project and of the project, done.

 NGO’s are requested to build up effective communication teams for

reaching out awareness messages to illiterate SHG members. Awareness songs and

street plays should also be used during training or BLCC sesssions to convey

messages. PIUs will convene half-yearly communicators meets and the district

level to effect exchange of valuable communication material between NGO’s.

We also expect PIUs and NGO’s to jointly radio programmes with help of

AIR highlighting the inputs like training in the project, awareness songs, talks with

SHG’s, Women’s day celebrations, Federation meetings, reports on exhibitions /

fairs participated by SHG’s and other progress made by SHG’s.

ECONOMIC ASSISTANCE

The groups can receive economic assistance, if any, from the Tamil Nadu

Corporation for Development of Women Ltd. They can also access economic

assistance under any scheme of Government, such as SGSY, SJSRY, TAHDCO,

TABCEDCO etc., after the group passes a resolution for a certain member or

members to be so assisted. The groups can also receive SHG loans from the banks

and RMK loans from the NGO. They can also receive economic assistance from

any other source. However, the following points have to be strictly followed.
1. No economic assistance is to be given till the group is cohesive enough to

receive it. This would be assessable after a minimum period of 6 months

after group formation. The minimum eligibility criteria for credit linkage for

an SHG is listed. This should be followed by NGO’s while sanctioning

credit from RMK or alternate sources and while screening SHG’s for bank

credit, in order that each SHG loans principles of financial discipline and

credit-worthiness. It should be noted by all partners that premature sanction

of external credit without fulfilling these conditions would lead to

undesirable conditioning and disorted growth of the SHG.

2. The number of members to be covered with economic assistance in any one

year must be decided by the SHG and preferably not all in one go. Only if it

is a group activity can all members be assisted in one go.

3. All release of loan and repayments are to be done through the group account

to individual account. (latter wherever applicable)

4. All subsidy should go as bonus to the group fund and add to the SHG’s

corpus.
SUBSIDY ADMINISTRATION

Any economic assistance scheme in the project having a subsidy component

has to be administered through the group. No individual subsidies are to be given.

Subsidy is to be given to the group. It is for the group to decide how much to give

to members.

This subsidy is a good repayment bonus. Only after 100% repayment of

loan-cum-interest, the subsidy, which is kept as a fixed deposit, would be given to

the group. Hence subsidy is not adjusted against the loan, and full economic

assistance is treated as loan.

BONUS FOR REPAYMENT

The project may have a good repayment bonus for 100% loan – cum-

interest repayment. This bonus may be from the Tamilnadu Women’s

Development Corporation in the form of a capital grant being given to the group as

stated above, or it may be in any other form from the Tamilnadu Women’s

Development Corporation, or it may be from the NGO or from the bankers.

LOCAL AREA BANKS / ADDITIONAL CREDIT DELIVERY SYSTEM

Group / Cluster / Block level local area banks are to be developed as an

additional credit delivery system. Which could be supported by the NGO’s through

their own funding, or through the RMK, or through the SHG loan of banks or any

other schemes available. This would be in addition to the existing commercial

bank’s credit facilities that would be available for the groups.

ANNUAL AUDITING

Groups accounts be audited annually by engaging a local qualified auditor at

the village / cluster itself. The groups should meet the audit cost. Groups should

follow up and rectilfy the deficiencies pointed out by the auditor and ensure that

lapses do not recur. NGO should facilitate this process. NGO’s should ensure that

SHG accounts are audited in April and May of every year promptly by

arrangement with standard auditors. The auditors report should be in Tamil and

should be read out in the subsequent SHG meeting, minuted and passed in the

minutes book. NGO’s may consider making audit a participating process with

presence of SHG members. A manual on participatory audit is being evolved.

Declaration of dividend (distribution of a part of the interest accumulated) can also

be done at the time of the annual audit.

CLUSTER LEVEL FEDERATIONS

Federation of women’s groups will be promoted at the cluster level. This

process is to commence within 6 months – one year of group formation. As a

forerunner, participation in Block – level coordinaiton committee (BLCC) meeting

is being insisted in the first two years. After women begin to feel the importance of

networking, NGO and PIU can motivate them to evolve into local cluster level

federations, which are again informal groups. The monthly BLCC meetings are to

be conducted by SHG women representatives (At the rate of one or two

representatives from each SHG). Every SHG may think of selecting one member

other than the animator or representative to represent the SHG in the BLCC

meetings (the one – woman one post ideal), so as to develop leadership qualities in

others and to encourage broad – basing / sharing of responsibility within each

SHG.

GENERAL

The bank accounts should be in the name of the SHG’s and should be

operated jointly by the animators and two representatives.

1. The older groups should be encouraged to assist in the formation of new

groups in the village / adjoining villages.

2. The groups should consciously plan for a minimum of four social /

community action programmes during every year. Mere writing of petitions

is not enough. Concrete actions and results must be there.

3. The group members should attend all the training programmes without fail.

Participation in cluster level workshops and programmes also needs

emphasis.

4. The group shold also show enthusiasm for taking up activities like kitchen /

backyard gardening, low cost nutrition, soak pits, low cost sanitation, hand

pump maintenance, etc. They should also take up issues concerning

enviroment.

5. The groups should learn to work in harmony with the village panchayat and

other elected representatives for sustainable development and long term

benefits.

6. The group members should act as role models for the other women in the

village and undertake activities to stop social evils. The use of strategies like

street plays, folk theater, etc. will be very effective in spreading such

massagers.

7. Functional literacy standards, of all the members, should be essentially

achieved.
 8. All decisions should be taken in a democratic manner after sufficient

discussion in the groups. Dominaiton by animators or representatives or

outsiders should be guarded against.

IMPORTANCE OF TRAINING

1. Expand knowledge base

2. Try to bring about changes in our attitudes

3. Impart new skills and built upon our existing skills.

The Tamilnadu Women’s Development Project (Mahalir Thittam) is

different from other Government schemes because its implementing agencies

(Government NGO & Banks) have diverse backgrounds requiring a common

understanding of project goals, co-ordination and co-operation amongst

themselves.

Hence, in this project, the importance of training increases manifold. Here

the 3 implementing agencies have not just to be tuned to project objectives, but

have also to be made sensistive to the existing social situations and inspired to

perform their duties with commitment.

Training is the key input on the project and is extremely important in the

process.
 Methodologies used for training would be participatory, with a good mix of

techniques like group discussion, quiz, lectures, case studies, role play, panel

discussion, experience sharing and exposure visits. Games, energies, stories,

songs ( especially on social themes), etc., should punctuate the formal learning

process, so as to enable the participants to loosen up, gain awareness and build

their self confidence.

The different types of training envisaged for different project participants are:

SI.No. Type No.of Modules Days

1 SHG Members Training 10 10

2 Animators and Representatives Training 12 24

3 Representatives Training (II year onwards) 5 10

4 Cluster level representatives training 4 4

5 NGO Staff Training 7 14

6 Bank Staff Training 3 6

7 PIU Staff Training 4 10

8 PMU Staff Training 2 10

9 Training for communication teams 3 19

Skill Training for economic activities Based on

10 3
activity
CONCLUSION

In the above pages review of the study area and origin and growth of Self

Help Group Scheme is given. The following chapter deals with the review of

relevant literature for the study.