Professional Documents
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10, Self Help Group
10, Self Help Group
School of law
BA LLB(Hons.) B1
1st Semester
PROJECT
ACKNOWLEDGEMENT:
The completion of this project was not possible without the participation and assistance of so
many people whose names may not enumerated.
Mr. SAM BABU, teacher and one of my senior KUNAL SWAMI give their endless support kind
, and undertaking spirit during our case presentation.
Above all , to the great almighty , the author of knowledge and wisdom , for his countless love.
ADITYA JAKHAR
CONTENT:
1. FRONT PAGE
2. ACKNOWLEDGEMENT
3. INTRODUCTION
4. OBJECTIVE
POVERTY ALLEVIATION
WOMEN EMPOWERMENT
INTRODUCTION:-
Self-Help Group or in-short SHGs is now a well-known concept. It is now almost two-decade
old. It is reported that the SHGs have a role in hastening country’s economic development. SHGs
have now evolved as movement.Mainly, members of the SHGs are women.
Consequently,participation of women in the country’s economic development is increasing. They
also play an important role in elevating the economic status of their families. This has led boost
to the process of women’s empowerment.In the recent years, empowerment has been recognized
as the central issue in determining status of women. Since women become more potent source of
development empowering them is prerequisite for over all development. By empowering women
not only make them to share in the development progress but also bring out their lasting
efficiency.
India has adopted the Bangladesh model in a modified form. To alleviate the poverty and
empower the women. The micro-finance has emerged as powerful instrument in the new
economy. With availability of micro-finance, self-help grou (SHGs) and credit management
groups have also started in India. And thus the movement of SHG has spread out in India. In
1991-92 Nabard started promoting self help groups an a large scale. And it was the real take off
point for the SHGs movement. In 1993, the Reserve Bank of India also allowed SHGs to open
saving accounts in banks facility of availing bank services was a major boost to the
movement.The concept of SHG was not new to Maharastra. Beginning with a tiny amount of
only 25 paise, the women of Maharashtra from Amaravati District had established on SHG long
back in 1947. Further in 1988, ‘Chaitanya’ Gramin Mahila Bal Yuvak Sanstha started promoting
SHGs in Pune District, informally. In Southern part of India, ‘SADHAN’, ‘DHAN’ foundation
and ‘ASA’ worked to promote SHGs. But their thrust was on economic aspect only. Whereas in
Maharashtra, the NGOs not only have catered to the economic needs of the participants, but also
involved in the process of social development. Aim of ‘Chaitanya’ is also the same to empower
the women in both ways, economically and socially. Presently, numerous NGOs and
governmental institutions promote SHGs on a large scale. The Self Help Project works to
promote saving among community members. Saving is a crucial step in escaping poverty. We
encourage members to reduce unnecessary expenditure and save the money instead. These
savings can then be used for paying school fees, medical treatment during sickness, investment
in business as well as personal consumption.
We give members the tools to save securely and to keep clear, transparent records. It is up to
members to work hard for themselves and receive the benefits. We form groups of 20 to 25
members with common circumstances. These groups meet once a week and save a small amount
of money. Once the fund is large enough the group begin lending to members for investment in
their businesses. The loan plus interest is paid back after a period of one to three months. After a
period of one year the box is opened and the savings plus interest is distributed to the members.
To each group we contribute a metal box for holding the savings with two padlocks, a secretary's
and a treasurer's ledger, a pass book for each individual member, pens, rulers and an ink pad. We
also provide training in saving and lending, leadership and teamwork, business management,
book writing and constitution writing. The groups elect their own officials, Chairperson,
Secretary, Treasurer, Key Holders and Money Counters. They also write their own constitution
with the rules of how they wish to run their group.
Members also contribute to a Risk Fund. If a member or their child are sick, they can borrow
from the Risk Fund to pay for food or transport to the hospital. When they are able the member
must repay the loan to the group but does not pay interest and the term is flexible depending on
their circumstances.
CONCEPTUAL BACKGROUND :
Researcher will use the following concepts for his proposed Ph.D.research work.
The self help groups (SHGs) are voluntary association of 15-20 people formed to attain a
collective goal. Members of SHGs who are homogenous with respect of socio-economic
background. The genesis of SHGs could be traced to mutual aid and trust in Indian rural society.
Self Help Groups (SHGs) is the brain child of Noble Peace Prize Winner Prof. Mohammed
Yunus who started Grameen Bank of Bangladesh as early as in 1976. Self help groups (SHGs)
and Microfinance (MF) is the recent past has emerged as a potential instrument for poverty
alleviation and financial inclusion and women empowerment. The basic principles of the SHGs
are group approach, mutual trust of small and manageable group, spirit of thrift, demand based
lending, collateral free, poor-friendly loan, peer group pressure in repayment, skill training,
capacity building and empowerment (Lalitha 1998). In the decade of nineties and twentieths
National Agriculture Bank for Rural development (NABARD), Government Organization, Non
government Organizations (NGOs), Micro Finance Institutions (MFIs), initiates and started Self
help groups for microfinance, micro credit activities for the objectives of poverty alleviation,
women empowerment and financial inclusion. Government of India had decided to restructure
the self-employment programmes, the earlier programmes were no long in operation. A new
programme known Swarnjayanti Gram Swarozgar Yojana (SGSY) has been launched from April
1999. Broadly, the microfinance could be classified into the following model.
1) Grammen Model
3) Individual credit
4) Community Banking
In India, group approach model is very popular. The SHGs become the basis for socio-economic
revolution and build as a relationship of mutual trust to among members and promoting
organization credit delivery through thrift and credit groups.
OBJECTIVE
The present study is descriptive in nature. The primary objective of the study is to find out and
analyze the impact of leadership on the empowerment of women in SHGs in Kancheepuram
District Tamilnadu. In addition the study is focused to discuss the profile of women SHG
members and the factors influencing the success of SHGs in rural areas and the success factors of
women SHGs in rural areas. The SHG’s became a regular component of the Indian financial
system since 1996. The SHG’s are small, informal and homogenous groups. These groups have
proved as cyclic agents of development in both the rural and urban areas. The SHG’s after being
formed start collecting a fixed amount of thrift from each member regularly. After accumulating
a reasonable amount of resource, the group starts lending to its members for petty consumption
needs. If the bank is satisfied with the group in terms of (i) genuineness of demand for credit; (ii)
credit handling capacity of the members; (iii) repayment behaviour within the groups; and (iv)
the accounting system and maintenance of the records, it extends a term loan of smaller amount
to the group. Thus, financing through SHG’s effects quite a few benefits like; (i) savings
mobilized by the poor; (ii) access to the required amount of appropriate credit by the poor; (iii)
meeting the demand and supply of credit structure and opening of new market for financing
institutions; (iv) reduction in transaction cost for both lenders and borrowers; (v) tremendous
improvement in recovery; (vi) heralding a new realization of subsidy less and corruption-less
credit; and (vii) remarkable empowerment of poor women. Off late it was identified that the
women SHGs are not performing up to the expectations due to lack of awareness on the role of a
member and leadership related issues. In this regard the banks started penalizing by reducing the
loan amounts and the governmental agencies are decoupled from the responsibility of
guaranteeing to 93 banks. In this scenario many SHGs are closed and some of them are
restructured by merging with other groups. Many research studies are focused on assessing the
performance and models and the modus operandi, nature of business and success of SHGs in the
country.
(greater than 75 percent) in the country has one of the lowest rural poverty rates of 11.2 percent.
Macro data also confirm the positive co-relation between financial inclusion and poverty
reduction. INAFI (International Network of Alternative Financial Institution- India) as a network
of development NGOs is committed to the financial inclusion. Its members are involved in
promoting financial inclusion and poverty reduction. INAFI (International Network of
Alternative Financial Institution- India) as a network of development NGOs is committed to the
financial inclusion. Its members are involved in promoting financial inclusion through their large
microfinance programmes of SHGs Bank linkage. Microfinance and self help groups activities
has been long recognized and practiced in India as a toll for extending banking services to poor
and at the same time financially inclusion of weaker section of the society.
POVERTY ALLEVIATION:
Poverty line is a financial figure, below which an individual wouldbe considered to be unable to
access a minimum acceptable quality of life in terms food, shelter, clothing, and health. Poverty
in India has predominantly rural characters. The narrow materialist conceptualization of poverty
was as an inability to meet the minimum income requirements or basic needs. Deaton (2007)
finds property in India declined from 36.2 percent in 1992-94 to 28.8 percent in 1999-2000.
Poverty occurs when people experience severe form of deprivation, the nature of those
deprivations remains, however, a keenly debated topic As Amartya Sen has observed, “Poverty
must be seen as the deprivation of basic capabilities rather than merely as low income.”
(Sen.,1999) The poverty comes in many forms and causes multiple harms. In India poverty
estimates is differ from various sources such as planning commission (27.5 per cent), N.C.
Saxena Committee (50 per cnet), Suresh Tendulkar Committee (37.2 per cent) Arjun Sen Gupta
Committee (77 per cent) at different time period. Unfortunately, though the actual status on
poverty in India as of date in ambiguous, with considerable skepticism attached to official
figures. The microfinance as a tool in poverty reduction and empowerment particularly in rural
areas, has gained credence in development dialogue the world over (Joy and Murthy, 207).
Poverty is a multi-dimensional concept though some facts of poverty may be more crucial than
others, Illiteracy, low income, unemployment, malnutrition, frequent illness, high infant and
child mortality and lower life expectancy and all associated with poverty and majority in rural
areas. Self help groups programme proved that it is an effective tool for poverty alleviation
programme. HGs which poor need for their basic requirement is not available in the formal credit
system. In these circumstances, HGsservices not only fulfill their productive needs but also
satisfy their consumption needs. Overall HGs can help low income people to reduce risk,
improve financial activities, raise productivity, increase their income and improve the quality of
their lives and empower them for economic growth in India. SHGs Programmes have become a
popular mechanism for poverty alleviation, financial inclusion in many developing countries
including India.
WOMEN EMPOWERMENT:
Empowerment of woman is a crucial factor in the eradication of poverty, as the woman are the
key contribution to the economic at all levels woman participation combating poverty though
both remunerative and un-remunerative work at home and the work place the formation of self
help groups has provided a lot of confidence among members of self help groups. A large
member of woman in the country is gaining self reliance with the help of self-help groups. In
India, self-help groups represent a unique approach to financial inclusion. Self help groups-
Microfinance activities helps the poor, women is not just obtaining loans but also inculcating in
them habits of savings, credit and investing in micro insurance and money transfer services.
Members of self help groups participate and improving access to micro credit management,
marketing skills, and capacity building to promote financial inclusion, and empowerment.
Kudumbashree (prosperity of the family) is an ambitious poverty alleviation and women
empowerment programme started by Government of Kerala in 1999 with the aim of eradicating
absolute poverty. Under this programme, women empowerment was seen as the key to bring out
families of the poverty trap and micro credit activities through self help groups.
Formation of SHGs–
The insiders’ view To understand how the poor, particularly women, form into groups, data was
collected on who motivated them; before joining the SHGs, were they already in any group;how
did they select the members, whom did they include and exclude. The study teams collected data
during focus group discussions with the groups. During focus group discussions, the members
reported that many key persons in the community such as NGOs, government officials, key
persons like the Sarpanch, teachers , educated persons and old groups in the village motivated
them to form into the SHGs. According to SHG members, promoters played a critical role in
forming them into groups. Some groups have mentioned that they were inspired by the kind of
benefits that the members of DWCRA groups availed from the government. Purpose of joining
SHGs:
During focus group discussions, the members have mentioned the following reasons for forming
group.•To avail of credit for taking up income generation activities and for fulfilling social
needs/obligations; To promote savings and/ or to minimize household consumption expenditure
for future needs such as children’s education and marriages, health, old age security, and to
build a house; To avail credit easily at low interest rates, without collateral and with flexible
repayment norms, unlike loan from moneylenders; To avail benefits from NGOs and government
channeled through SHGs like a revolving fund, interest free loans, skill improvement trainings,
and other social and food security programmes meant for the poor; and To develop awareness
about what is happening around them and help each other for their own development in all
spheres of life. Self Help Groups in India: A study on quality & sustainability.
While forming a group, they drew up criteria to select members or reject others. During focus
group discussions, most of the groups reported that they considered the following criteria while
electing / rejecting members. Criteria Inclusion Exclusion Geographic aspects .Preference to
women staying in the same street, area, locality and village No preference to women staying
in other streets, areas and villages Economic aspects Poor; same economic activity; can pay
savings and loan installments regularly Rich/non-poor; job holders; can’t or will not pay
savings and loan installments regularly Social aspects.Many members are known to each other –
relatives, friends, and some other working relationships; Preference to same caste; More
preference to non-migrant households Unknown people not admitted/selected as members
Different caste; Low preference to migrant households Personal aspects Good character;
friendly; helps others; patient; and has faith on others; Mixes freely with others; Preference to
literates; Preference to young and middle age women; Preference to women having experience in
managing the group; Interest of both the members and household members, especially husband
Illiteracy is not a bar; Not allowing aged persons; Not allowing women who defaulted in
DWCRA groups; Low preference to women whose household members are not interested
Group procedures Women willing to attend group meetings within and outside the village;
Willing to respect group norms/procedures Joined up to 20 members Unwilling to attend
meetings within and/ or outside the village No respect for group norms; Not joined more than 20
members The above criteria reveal that the groups have taken care while selecting or not
selecting members of a group, which is required for smooth functioning and sustainability.
Prior experience as groups:The data shows that 80 out of 1942 sample SHGs existed as groups
before being formed into the SHG.
Organizational Face of SHGs:
To get an understanding on what the SHGs are, one has to analyse the basic organizational
features of SHGs namely
i) savings,
ii) meetings,
v) group norms.
The present section of the report mainly discusses the six organizational aspects of SHGs. What
are the types of savings and products with which the SHGs have been promoted? What is the
periodicity and volume of savings? And how are they using savings mobilized from members?
What is the agenda for SHG meetings, how frequently SHG conduct meetings, and members’
attendance in meetings, and what the agenda for meetings is? What is the quality of book
keeping, which maintains and writes the books of accounts? How do the SHGs select their
representatives and is there leadership rotation? Do groups formulate any norms about the
organizations aspects? If yes, are they in practice? This chapter covers all these aspects of
SHGs.
Savings :
Types of savings:
i) compulsory and
ii) voluntary.
Most groups have only compulsory savings where all the members save an equal amount. On
the other hand, a few groups have both voluntary and compulsory savings, and the members are
free to save any amount as voluntary savings after depositing the compulsory savings amount
which is equal (Myrada, 2010). In the present study, all the SHGs have reported compulsory
savings only.
Meetings:
Regular meetings of SHGs determine whether they are active or dormant. The SHG meetings
serve many purposes. It is the meeting place and the learning platform for all the members to
exchange ideas, to discuss and to take decisions on group activities etc. SHGs Self Help Groups
in India: A study on quality & sustainability have formed norms for meetings- venue, meeting
time, attendance, agenda, recording of meeting minutes, fines and penalties etc. All this
Fines :
The fines and penalties are the chief methods used to control the behaviour of members for the
smooth running of SHGs. The sample SHGs have specific norms relating to fines. The amount of
fine and penalty depends on group terms and conditions, and vary from group to group. During
focus group discussions, many groups have mentioned that the fines and penalties ensure high
percentage of member attendance, regular savings, regular payment of loan installment, and
transparency by members’ participation in meetings and discussion.
Key Achievements
•Organized National Conference on SHG federations and SHG women’s sessions in the
Microfinance India Summit, 2008
•Published and discussed State SHG sector reports insome of the States
•Organized State level policy workshops on SHG related issues
•Supported National and State level missions and expert committees such as National Rural
Livelihood Mission (NRLM) and corresponding State missions, Malegam Committee and Y. C.
Nanda Committee on SHGsin West Bengal
•Conducted a national level study on SHG federationsSelf Help Groups in India: A study on
quality & sustainability
•Conducted national study on SHGs in eight states (Rajasthan, Assam, Bihar, West Bengal,
Gujarat, Maharashtra, Andhra Pradesh and Karnataka)
•Promoted a model and up scaling on self regulatory management by SHGs and SHG
Federations
•Developed a Training of Trainers module on ‘SHG federation’ and translated into Hindi
•Organized exposure visits and discussion forums on various themes by member Organizations
for SHPIs, bankers and policy makers
•Successful in obtaining ‘a change in mindset’ of key stakeholders at national and states level in
favour of the SHGs and SHG federations as self-reliant institutions of the poor.