A

Synopsis of

“ A STUDY OF SHG – NABARD PATNERSHIP

TO EVOLVE POOR’S LIFE ”

Submitted to

Dr. Homi Bhabha State University for partial completion

of degree of Bachelor of Commerce (Banking and
Insurance)
Under the Faculty of Commerce

By
ANVESH PULISHETTY
TYBBI-B
Roll NO:
Under the Guidance of
Dr. JHARNA KALRA

SYDENHAM COLLEGE OF COMMERCE AND

ECONOMICS, B-ROAD, CHURCHGATE,
MUMBAI-400020

September 2023
TABLE OF CONTENTS

Sr. No. Title of the Chapters Page No.

1. CHAPTER 1
INTRODUCTION 3

2. CHAPTER 2
LITERATURE REVIEW 4

3. CHAPTER 3
PROBLEM DEFINITION 5

4. CHAPTER 4
HYPOTHESIS 5

5. CHAPTER 5
OBJECTIVES 6

6. CHAPTER 6 7
SCOPE &
LIMITATIONS

7. CHAPTER 7
METHODOLOGY
• Research Design 8
• Types of Research 8
• Time Period of Research 8
• Universe of Design 8
• Sample Size 9
• Method of Research 9
• Limitations of the Study 9
• Research Instrument 9
• Statistical tool 9
8.
REFERENCES 10

CHAPTER 1
 INTRODUCTION
Self-help groups (SHGs) play today a major role in poverty alleviation in rural
India. Self-help as a strategy for social development places emphasis on self-
reliance, human agency and action. It aims to mobilize people, to give them
voice and build peoples organizations that will overcome barriers to
participation and empowerment. The SHG system has proven to be very
relevant and effective in offering women the possibility to break gradually
away from exploitation and isolation. Almost all major donor agencies support
SHGs in India in one way or another and many success stories are available,
describing how membership in a SHG changed the life of a particular
individual or group for the better. Many NGOs are promoting the SHG
mechanism and linking it to various other development interventions.
Self Help Group is about people coming together with others who are
affected by a particular issue to support each other and to work together to
change the disadvantage affecting them. SHGs have another very important
role to play particularly in the transfer of technology to user group population.
It has been found by the members of SHGs that they offer them organizational
base, large resources and access to modern technology leading to employment
and income generation. Thus, SHG movement among the rural poor in
different parts of country is emerging as a very reliable and efficient mode for
technology transfer. However, it is strongly felt that the pace of transfer and
popularization of technologies must be accelerated so that even the small
farmer can benefit from new technologies.
SHG is group of rural poor who have volunteered to organize themselves
into a group for eradication of poverty of the members. They agree to save
regularly and convert their savings into a common fund known as the group
corpus. The members of the group agree to use this common fund and such
other funds that they may receive as a group through a common management.

Generally a self-help group may consist of 10 to 20 persons. However, in

difficult areas like deserts, hills and areas with scattered and sparse population
and in case of minor irrigation and disabled persons, this number may be
from 5-20. The dissicult areas have to be identified by the state level
committee and the above relaxation in membership will be permitted only in
such areas.
The group should devise a code of conduct to bind itself. This should
be in the form of regular meetings, functioning in a democratic manner,
allowing free exchange of views, participation by the members in the decision
making process.
The group should be able to draw up an agenda for each meeting and
take up discussions as per the agenda. The members should build their corpus
through regular savings. The group should be able to collect the minimum
voluntary saving amount from all the members regularly in the group meetings.
The savings so collected will be the corpus fund. The group corpus find should
be used to advance loans to the members. The group should develop
financial management norms covering the loan sanction procedure, repayment
schedule and interest rates.
The group should maintain simple basic records such as minutes
book, Attendance register, Loan ledger, General ledger, Cash book, Bank
passbook and individual passbooks. The sample proforma for maintenance of
above records by the group is in the Annexure 2 for guidance. These could be
used with necessary changes/modifications wherever required. 50 percent of
the groups formed in each block should be exclusively for the women. In the
case of disabled persons, the groups formed should ideally be disability-
specific groups are not available, a group may comprise of persons with
diverse disabilities or a group may comprise of both disabled and non- disabled
persons below the poverty line.
The joint liability of the group enables the poor to overcome the problem of
collateral security and also has an in-built mechanism of peer monitoring
leading to better loan recoveries and productive credit utilization.

The SHGs provide the benefit of economies of scale, cost effective services,
collective learning, democratic base of platform for dialogue and co-operation.
The functions of SHGs are based on co- operations rather than competition. It
follows the principle of “contribute according to our ability and extract
according to your need”.

The origin of SHGs could be traced to mutual aid in Indian village

community co-operatives, which are formal bodies, whereas SHGs are
informal groups, which encourage savings and promote income-generating
activities through small loans.
The experiences available in the country suggest that SHGs are sustainable,
reliable, stimulates savings and in the process help borrowers to come out of
vicious circle of poverty. These groups are called as “solidarity groups” as
they provide monetary as well

as moral support to individual members in times of difficulties. Zaman pointed

out, that self-help groups have played valuable roles in reducing the
vulnerability of the poor, through asset creation, income and consumption
smoothing, provisions of emergency assistance and empowering and
embroidering women by giving them control over assets andincreased self-
esteem and knowledge.

NABARD

National bank for agriculture and rural development (NABARD) is

 an apex development bank in India. It has been accredited with matters
concerning policy, planning and operations in the field of credit for agriculture
and other economic activities in rural areas in India. NABARD was established
by an act of parliament on 12, July, 1982 to implement the National Bank for
Agriculture and Rural Development Act 1981. It replaced the Agricultural
Credit Department (ACD) and rural planning and credit cell (RPCC) of
Reserve Bank of India, and Agricultural refinance and Development
Corporation (ARDC). It is one of the premeire agency to provide credit in rural
areas.

ROLE OF NABARD

• Serves as an apex financing agency for the institutions providing

investment and production credit for promoting the various
developmental activities in rural areas.
• Takes measures towards institution building for improving absorptive
capacity of the credit delivery system, including monitoring,
formulation of rehabilitation schemes, restructuring of credit
institutions, training of personnel,etc.
• Co-ordinates the rural financing activities of all institutions engaged in
developmental work at the field level and maintains liaison with
Government of India, state governments, Reserve Bank of India and
other national level institutions concerned with policy formulation.
• Undertakes monitoring and evaluation of projects refinanced by it.
• Acts as a coordinator in the operations of rural credit institutions
• Extends assistance to the government, the Reserve Bank of India and
other organizations in matters relating to rural development.

• Offers training and research facilities for banks, cooperatives and

organizations working in the field of rural development providing
assistance to eligible

institutions in agriculture and rural development Acts as regulator for

cooperative banks and RRBs.
 CHAPTER 2
REVIEW OF LITERATURE
• This study is based on the review of some relevant studies. The studies
reviewed are excellent source to understand the process of change,
though they do not provide precise estimates of impact assessment
parameters. Formation, functioning and impact are the broad issues
examined in the studies.
• Sarkan (2001) pointed out on his study that, SHG is the useful tool in
building the capacity of the poor management of sustainable self
employment opportunities, besides providing other financial services
like savings, housing consumption credit, insurance cover etc., through
NABARD. The nation policy on SHG should emphasize on encouraging
initiatives and participation of different type of institution in
microfinance, bring the microfinance activities, irrespective of the type
of institution involved, with in the regulation and supervision of
completed authorities, creating policy environment.
• Rao (2002) on his study “women self help groups (SHGs) and
microfinance schemes” he has pointed out that micro provide credit
access to poor with no collateral obligation. It encourages savings and
promote income, generating activities, loans and provided at the market
driven rates of interest and poor pressure is used in
repayment,microfinance is carried out through self help group where
poor come together through their saving and loans with the help of
NABARD.
• Joshi (2002) on his study he has pointed out that the micro credit
programme extend loans to poor people for self-employment projects
that generate income with the help of NABARD, allowing them to care
for themselves and their families, to their clients in addition to credit for
self employment. The rural areas the poor have been dependent on
money lenders for their financial needs, either marriage in the family,
illness or any other emergency need, money lender always exploit the
situation.
• Kamal Vatta (2003) on his study SHG and poverty alleviation he has
pointed that the microfinance involves financing for SELF HELP
GROUPS which are small, informal and homogeneous groups, of the
not more than 20 members. The members have poor risk taking ability,
no collateral to other and have limited earning opportunities. The
working fund grown with time and group can also approach financial
institution for credit. The group keeps taking decisions as in the past but
with more resources.
• NABARD and SHGs, it is clearly understood that the SHGs are tool to
promote rural savings and gainful employment. Through this, the rural
poverty is reduced considerably. Therefore women members are
economically independent and their
 contribution to household income has also increased. The present
study is also focusing the economic improvement of women after joining
SHGs.

CHAPTER 3
PROBLEM DEFINITION
Poverty and unemployment are the twin problems faced by the developing
countries. The SHGs are informal groups formed on a voluntary basis, for
providing the necessary support to their members for their social and economic
emancipation. The distinguishing feature of the SHGs is creating social and
economic awareness enables the members to lead their life in a sound hygienic
environment and pursue a better living. The woman members involve
themselves more in taking decisions regarding the education of their children,
the investment of the family, managing the economic assets of the family and
bringing up cohesion among the members of the family and others for a better
living.
On the economic point of view both men and women work
shoulder to increase the income of the family. Every member of the SHGs has
felt the need for more involvement in economic activities. The spirit for social
and economic upliftment of members is the significant contribution of each
and every SHG. There is a general tendency to consider the SHGs as a panacea
for all the ills of therural community.
Generally, the problem arises within a SHG because of the
presence of women with diverse nature and habits within a single group who
disagree over various issues. As a result, that group as a whole face problems
in organising the rules and managing the activities of the group that could have
led to their common benefit. The major problems faced are the passive attitude
of the group members, difference in opinion among the group members,
problems arising from constant late or no repayment ofloans by a particular
member and other personal problems.
Usually, the groups with capable leaders are able to co-ordinate
and control these problems efficiently such that these problems do not hamper
the activities of the group. They convince the members so that mutual
understanding is increased and build up a uniform financial discipline within
the group without facing any difficulties. The role of NGOs in solving these
petty issues within a group is immensE

• Lack of access of people to government

• Government programmes that have little relevance to rural communities
• Inappropriate design of some government programmes and schemes
• Low quality of human resources at the implementation levels of
government
• Lack of recognition among government personnel that they have a
stake in the poor’sdevelopment.
• Lack of awareness of general public about the activities
• Issues of transparency
 • Narrow perception towards initiatives
• Lack of consensus on implementing issues
• Non-availability of clear guidelines
• Need to build local capacities
• Visibility factor.

CHAPTER 4
HYPOTHESI
S
The establishment of SHGs and NABARD Support will enhance access to
financial services and credit opportunities for low-income households.

Particpation in SHGs will empower individuals with financial literacy and

entrerpreneurial skilis, eading to increased income generation and fnancial
stability.
The social cohesion and mutual support fostered within SHGs will strengthen
community bonds and result in improved overall well-being, incuding better
healthcare, education, and housing stability

CHAPTER 5
OBJECTIVES OF THE RESEARCH
• To study the social conditions of members of SELF HELP
GROUPS.
• To study the economic conditions of members of SELF HELP
GROUPS.
• To analyze the impact of microfinance on
ERADICATING RURAL POVERTY.
• To study the SELF HELP GROUPS performance in providing
microfinance services to the members.
• The National Bank will be an apex organization in respect of all
matters relating to policy, planning operational aspects in the field
of credit for promotion of Agriculture, Small Scale Industries,
Cottage and Village industries, Handicrafts and other rural crafts
and other allied economic activities in rural areas.
• The Bank will serve as a refinancing institution for institutional
credit such as long-term, short-term for the promotion of activities
in the rural areas.
• The Bank will also provide direct lending to any
institution as may approved by theCentral Government.
 • The Bank will have organic links with the Reserve Bank and
maintain a close link within.
• Preparing of potential linked credit plans for identification of
exploitable potentials underagriculture and other activities
available for development through bank credit.
• Refinancing banks for extending loans for investment and
production purpose in ruralareas.
• Involvement in implementation.
• Participatory planning.
• Inculcating culture of self-help.
• Ensuring sustainability.
• Local resource contribution.
• Promote sustainable Agriculture & Rural development.
• Recognizing the value of Agricultural Biodiversity.

CHAPTER 6

SCOPE & LIMITATIONS

Scope:

1. Geographical Scope: The study can

focus on a specific region or state within a country, or it can have a broader

national scope, depending on available resources and objectives.

2. Time Frame: The study can cover a specific period or multiple years to analyze
the long-term impact of the partnership.

3. Quantitative and Qualitative Data: Researchers can collect quantitative data,

such as financial metrics and employment rates, as well as qualitative data through
interviews and surveys to provide a comprehensive analysis.
Limitations:
• Sampling Bias: There might be a risk of sampling bias if the study cannot
include a truly representative sample of SHGs and beneficiaries due to
logistical constraints.
• Data Accuracy: The accuracy of data collected, especially in rural and
remote areas, can be a limitation if proper mechanisms for data validation
and verification are not in place.
 • Resource Constraints: Limited time and
Resources may restrict the ability to conduct an in-depth and comprehensive study
across a wide range of indicators

CHAPTER 7
RESEARCH METHODOLOGY
Research Methodology is the process used to collect information and data for the
purpose of making business decisions.
It refers to the specific procedures or techniques used to identify,select, process,
and analyze information about this topic. In a research paper the methodology
section allows the reader to critically evaluate a study’s overall validity and
reliability. The methodology section answers the two main questions such as
how the data was generated and how it was analyzed. The main purpose of
research methodology is to encourage the spirit of enquiry and it also fulfils the
mandatory requirements prescribed for a particular research study.

• Research Design
Research design is the framework of research methods and
techniques chosen by the researcher. The design allows the
researcher to hone in on research methods that are suitable for the
subject matter and set up his studies for success.

• Type of Research
The present study topic is going to be based on Descriptive
Research and Exploratory Research.
• Time Period of Research
The research would be conducted over a period of 2 weeks.

• Universe of Design
The universe of design for this study includes the students of
Sydenham College of Commerce and Economics.

• Sample Size
The sample size of this study is students of Sydenham College of
Commerce and Economics, currently pursuing 3rd year
undergraduate degree. Capped at 50 respondents only.
 • Method of Research
This research would be conducted using the Random Sampling
Method.

• Limitations of the Study

• The research is limited to private sectors banks only.
• The time stipulated for the project is very short.
• Research Instrument
For the given study a Questionnaire is going to be used as the
ResearchInstrument for the purpose of collection of data.
• Statistical Tool
The statistical tool used in this research is percentage.
REFERENCES/BIBLIOGRAPHY
INTERNET SITES

www.nabard.com
www.shg.com
www.wikipedia.c
om

BOOK

Poverty eradication and self-help groups – Dr. V. Neelamegam, Dr. R.

Dhanasekar National Bank for Agriculture and Rural
Development(NABARD) – T. Balakrishnan NABARD & its uses in
agriculture – Vinod Gokhale
 Signature of Student Signature of guide
ANVESH PULSHETTY DR.JHARNA KALRA