CHAPTER – I Introduction Training Manual.pdf · CHAPTER – I Introduction ... through improved management of their resource base in a way that contributes to ... sense of stakeholder

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CHAPTER – I

Introduction

NERCORMP is a livelihood and rural development project aimed to transform

the intervened lives of the poor and marginalized Tribal families in North East (NE)

India. NERCORMP is a joint developmental initiative in North East India of the North

Eastern Council (NEC), Ministry of DONER and International Fund for Agricultural

Development (IFAD). Its broad objective can be summarized as follows:

“To improve the livelihoods of vulnerable groups in a sustainable manner

through improved management of their resource base in a way that contributes to

preservation and restoration of the environment”.

The Project was launched against a backdrop of not many successful Rural

Development interventions in North East. Equally glaring was the weak and often

absence of right Social and Developmental Institutes at the grass root level.

Therefore, one main objective was to perform a SUCCESSFUL

DEVELOPMENTAL PROJECT and at the same time come up with a TRUE

DEVELOPMENTAL MODEL evolved from the grass root. It also aimed to establish a

sense of stakeholder ship / ownership by the Communities.

This project can proudly claim and even proclaim the establishment of SHGs

as growth engines in each of our project villages.

Sustaining long-term interventions, especially in development activities,

require strong and robust institutional arrangement. In our project, Institution building

becomes necessary not only to respond to preferences of the community members

but also to efficiently utilize the natural resources and traditional knowledge available

in the area. The institutions are to provide services consistent with the people’s

aspiration, taste and preferences.

It is in this context that the NERCORMP facilitated the formation of SHGs

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The women Self Help Group is mainly to address and empower women

related issues both in livelihood and social sector. The thrust of SHG revolves

around credit plus activities. To sustain SHGs, establishment of linkage with formal

financial institution is address in the project.

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CHAPTER – 2

What is SHG?

a) Definition/Meaning: Self-help groups are small group structures formed

for mutual assistance, satisfying a common need, overcoming problem and bringing

about desired social and/or personal change for accomplishment of a special

purpose. It is a group of homogeneous people coming together with a purpose of

thrift and savings to achieve prominence in the community as key actors in provision

of credit.

b) Characteristics of SHG

i) Homogeneous group: Are group of people with similar characteristics, caste,

creed, sex, occupation, geographical area, place of origin. Same language, income

level, etc

ii) Affinity: Are group of people bound by mutual trust, respect, affection, who

support one another and amongst whom exploitative relationships do not exist.

iii) Geographical proximity: Preferable people from the same village.

iv) Size of groups: As per the RBI guidelines a group must consist of 10-20

members.

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CHAPTER – 3

PROCESS FOR FORMATION OF SHG

I. Community Mobilization and Sensitization

i) Selection of village should be need based.

ii) Collate information of the villages from the different line departments

e.g. revenue, statistics, election, etc.

iii) Interaction with village elders, youth, and women, preferably separately

and explain to them the reason for the visit.

iv) Fixed the date, time and venue for the meeting where the communities

feel convenient.

v) Venue should be located at a location that could be relatively easy

accessible by all the villagers, especially women.

vi) Take a tour around the village to have a sense of the surrounding.

vii) Ample time should be given for conducting the meeting.

viii) Meeting should be chaired most preferably by the Village Headman.

ix) Explanation should be to the point, precise, and clear.

x) The importance of having SHGs should be explained.

xi) Meeting should be interactive and inclusive.

xii) Elicit suggestions/ comments from the communities.

Mobilization and Sensitization of the community

PRA Exercise andVisioning (village level)

Identification of Target people

Group Formation and Orientation

Group Visioning

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II. PRA Exercise and Visioning (village level)

Steps for Conducting PRA Exercise

i) Material to be used

a. Village Map

b. Chart paper

c. Rangoli Powder (four to five colours)

d. Markers/sketch pen

e. Pencil & eraser

f. Scale/ruler

g. Local material such as stones, green leaves, bamboo, etc.

ii) To obtain permission from the village headman/chief to conduct PRA.

iii) Facilitator should make a one day Night Halt prior to the PRA exercise

(To make Time Line of the village and Internalization of the ethos of

the village and rapport building with the villagers)

iv) PRA Exercise start

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v) Social Mapping: Communities take part in demarcating their village

boundary to identify numbers of households, church, schools, institutions, village link

roads, etc. This information will be vital to know the social structures of the villages.

Sample format is given below:

vi) Resource Mapping: To demarcate the resources available in the village such

as Jhum land, orchards, forest cover, catchment area, rivers and streams,

agricultural land, terrace cultivation, etc. This information will be vital to know the

actual socio-economic condition of the villagers. Sample format is given below:

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vii) Seasonal work schedule: The communities have to prepare a chart showing the monthly work plan in the village. This will be helpful to the implementing agency to know the actual work schedule of the communities. Based on this information implementing agency can suggest the communities to take up various activities. Sample format is given below:

Activities Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

Rainfall

Jhum

Terrace

Cultivation

Orchards

(Orange)

Infrastructure

Education

Labour

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viii) Linkages: linkages with government line department & financial

institutions and other agencies to enhance the skills and financial position.

ix) Resources (Inflow/Outflow):

a. Inflow: The communities have to list down what are the items coming

from outside to their villages.

b. Outflow: The communities have to list down what the items are going

out from their villages.

For Example:

Inflow Approx. Qty./Nos. Outflow Approx. Qty/ Nos.

1. Salt 1. Livestock

2. Utensils 2. Vegetable

3. Sugar 3. Ginger

4. Tea Leafs 4. Orange

5. Soap and detergent 5. Broom Grass

6. Livestock 6. Arecanut

7. Kerosene

8. Dal, Muster Oil

9. Fish & Dry Fish, meat, etc

10.Potato, Onion, etc

11. Iron

12.Cosmetics items

13.Watch, Radio, Tape, TV, etc

14.Sandal, Shoes

15.Electrical Items

16.Building Materials

17.Books, register, pen, pencil, etc

18.Cloths

19.Others

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After this exercise the community will know what are the item that flow from outside

market to the village every month and what are the items & quantity going from the

village to nearby market every month.

x) SWOT Analysis of the village: The community has to carry out SWOT

analysis to find out their Strength, Weakness, Opportunities and Threats of the

villagers in details on a chart paper.

xi) Criteria for formation of groups (on the basis of affinity-trust, homogeneous,

geographical proximity and wealth ranking data).

(a) Identification Characteristics of SHG Members:

i. Sorting out the members (ideal 15-20 members, purely on

voluntary basis, and based on wealth ranking data, e.g. same

income category, same mindset)

ii. Fine tuning of members (Grouping and Regrouping of

members)

iii. Naming of the group (allow them to have their own choice,

preferably local name)

iv. Election of the office bearers (President, Secretary, Treasurer

based on Consensus decisions)

v. Participatory – All the members should interact and work

together.

vi. Accommodative – Willing to take any suggestion from any

members & discuss on it.

vii. Timely address issues raised by the members

viii. Formulation of Rules & Regulations

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(b) In depth Orientation for Groups:

After the group formation the following point are to be taken into

consideration.

i) Basic concepts (What is a Group?)

ii) What is Affinity Group?

iii) Concept of SHG.

iv) Structure of SHG

v) Why SHG for alternate model of development?

It will bring sustainable development for the SHG and change the economic

condition of village and as whole.

vi) What kind of membership an SHG should have?

SHG who have gathered together for a specific purpose at a specific place

and who share a common interest

vii) How is SHG suitable for the rural poor in sourcing credit?

To be able to lend small amount of money to service daily needs such

as income generation activity, education, health, etc.

SHGs can provide timely credit/loans to its members.

SHGs impose affordable rate of interest. e.g. 1-2% per month.

Members trust one another and act as a guarantor for each other

thereby not requiring formal security, and utilize their peer pressure to

ensure proper loan use and repayment.

SHGs can avail credit from any commercial banks.

viii) List out the total advantages and disadvantages of various sources of

Credit.

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Source of Credit Advantages Disadvantages

Co-operative Societies Reasonable interest rates Only for members

Political interference

Not timely

Need for deposits

Only big loans are available

Need for security/guarantor.

Private Financial Institutions/Money Lenders.

Timely, adequate, and need based.

High rate of interest

Need for security/mortgage

Risk of loosing property

Harassment on non-repayment.

Banks Should have a Bank Account

Reasonable rate of interest

Some loans without security/guarantor

Long term loans with payment in installment

Need of security/guarantor recommendations

No timely credit.

Long process

To much paper work.

ix) Aims and objectives of the SHG

x) Functions of SHG

xi) Rules and Regulations

xii) How to conduct meeting (Proceedings, agenda, recording of minutes

books etc.)

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xiii) Planning and Resource mobilization (IGAs, Livelihood

development)

Planning involves the following.

What work/activity do we want to do? And why?

When do we need to finish it?

How will we do it?

What resources do we need?

Do we have all the resources we need? Where can we get them from?

Who will do what work?

Resource mobilization involves:

Mobilizing all the resources in time so that there is no waste in time, effort,

material and abilities.

Good resource mobilization would involve getting the right thing at the right

time in the right quantity, at the right place and at the right price.

xiv) Importance of book keeping

It is important to know all decision taken in the SHG meeting and in order ensure

transparency & accountability among all the members and it is also important that all

decision taken in the last meeting should be follow up in the next meeting.

xv) Importance of Leadership rotation

Rotation of Office Bearers and group leaders once in two years in a phased manner

is preferable; however the group may like to take the final decision. Rotational of

Office Bearers should not be one time to keep the momentum effectively.

xvi) SHG Grading

xvii) The importance of linkages with banks (Sustainability of SHG)

xviii) Credit plus Activities. (Insurance, Health Issues, Gender Issues,

Payment services, remittances, etc.

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xxi) Common Fund management: (regular savings, fund raising, loaning

procedures, prioritization of loan in an SHG)

Common Fund

Social Work

Fine

Loan Interest

Saving

Donation

Loan

Bank Interest

Membership Fee

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CHAPTER – 4

Identification of Target people

Group will be formed based on the Wealth Ranking (WR) data

a. Listing out households by names

b. Explain the exercise of WR (Better off, Middle, Poor & Poorest)

c. For each household distribute one piece of paper to write HHs names &

number.

d. Fix economic categories of people (Separate for Better off, Middle, Poor &

Poorest)

Wealth Ranking:-

After completing Social Mapping, Resource Mapping, resources

inflow/outflow & group visioning they should categories every households based on

the resource available in the village and itself also. The facilitator should ask every

household to put themselves in which categories they belong.

It is the facilitator roles to follow up and suggest them to follow the Criteria for

selection of category which is given below for reference.

Grade – A (Better Off)

1. Their should be enough rice for the whole year (from wet terrace or from

Jhum)

2. There should be income through permanent Orchards.

3. At least one member from household should be a service holder or master

roll.

4. At least one member from household should be a petty businessman.

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5. They should own livestock such as cow (5 numbers), pigs (10 numbers), Goat

(5-10 numbers), Chicken (15-20 numbers), approximately.

6. Gross annual income should be more than Rs.70, 000/-

7. At least two to three educated persons in the family & children are going to

school.

8. Semi pucca or pucca concrete house with electrification.

9. Their must be Semi to Pucca sanitary system in the house.

10. Household possessing permanent asset like Sewing machine, T.V., Radio,

Tape, Furniture and vehicle like scoter, bicycle etc.

Grade – B (Middle)

1. Their should be enough rice for 6 months (from wet terrace or from Jhum)

2. Less area under Permanent Orchards

3. No service holder in the family.

4. No side petty business in the family.

5. Livestock- cows less than– 2 numbers, pigs less than 2-3 numbers, Goats

less than– 2-4 numbers, Chicken less 8 -10 numbers, etc. approximately

6. Gross annual income should be in between Rs.30, 000 to Rs.50, 000.

7. Number of educated persons in the family very low.

8. Thatch & Bamboo house, but not electrified.

9. Population in the family is more than the family income.

10. Asset like radio only.

11. No sanitary system in the house.

Grade – C (Poor)

1. Enough rice for only two to three months (from wet terrace or jhumland)

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2. Totally dependent on daily wages in the village or near by village for rest of

the year.

3. Earning members in the family is a widow, single weak earner.

4. Parent cannot afford to send their Children to school.

5. Land and Orchards are limited, to marginal size (below 1.5 hectare.)

6. Only thatch & Bamboo house.

7. No asset in the house.

8. Gross annual income is less than Rs.25, 000.

9. No sanitary system in the house

10.Population in the family is higher than the family income.

11.No electricity in the house.

Grade – D (Poorest)

1. Enough rice for only one month (from wet terrace or jhum land).

2. Family totally dependent on daily wages exclusively in the village.

3. Annual income of the family less than Rs.15,000/-

4. No livestock in the family.

5. No assets in the house.

6. Absence of family land & property.

7. Open defecation practiced.

8. Kutcha house (thatched)

9. Area of jhum plot owned by the family is marginal.

10.No land and Orchards in the family.

11.Family members are mostly old & unable to work.

12.All illiterate in the family.

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CHAPTER – 5

Group Visioning:

i) What the group need to achieve in the next 10-15 years down the line.

ii) Need to list down the Weaknesses and Strengths of members

(Through Story telling etc.

iii) What they like to achieve (list down the dreams of each members and

as well as group)

iv) Arrive at a collective dream, decision and come up with consensus

(self-dependency)

v) Vision needs to be addressed noted in the minute’s book and pasted in

notice boards/ meeting place.

vi) What is group Mission? In their life time, what are their goals, aims and

Objectives?

vii) Mission: Actions/Steps towards realization of this dream.

viii) Steps to achieve these goals e.g. every parent has a dream for their

children.

ix) Group Brain Storming: Required to achieve their vision.

a. Past, Present and Future (listing out various wish lists) good health

care, credit availability with right amount and at the right time.

x) Prioritization of wish list.

xi) Who is going to take up all these; who are the agent of change, is

there any need for an organized body; yes or not; is it an SHG, etc.

xii) Need to form an organization/group.

Xiii) Future Plan (How they will do) where from they will get the fund.

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CHAPTER – 6

STRUCTURE OF SHG

i) Ideal Size (10-20 members)

ii) Office bearers: (Elected)

a) President

b) Secretary

c) Treasurer

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CHAPTER – 7

FUNCTIONS OF SHGS :

Savings and thrift

Regular Group Meeting

Community mobilization

Social agreement

Credit

Social work

Gender issues

Legal issues

Promote Income Generating Activities

Value addition/Production Units

Village marketing

Advocacy

Maintaining books of records

Savings and thrift

i) Fix the rate and intervals of savings

ii) Regular saving / contribution and regular lending

iii) Opening of Saving Bank Account in commercial banks

iv) Accounting other incomes such as social work

viii) Entry into the Saving Books and Individual Pass Book

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Regular Group Meeting

i) There should be regular meeting

ii) Time, Place should be fixed

Community mobilization

i) Cleaning drive within village

ii) Community contribution should be encourage

iii) Health, Hygiene, education, should be encouraged.

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Credit

i) Credit need assessment

ii) Fund absorption capacity assessment

iii) The SHG need to define their credit terms/conditions whether it should

be short, medium, long terms.

ii) Right amount at the right time.

iii) Broad equal opportunity to all the members. Preference will be given to

the poorest of the poor.

iv) Repayment should be fixed before sanctioning any loan amount to

members.

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Promote gender equity

i) Raising gender equity issues in the villages

Legal Awareness

i) Basic knowledge about

ii) women rights

iii) child rights,

iv) domestic violence

v) Dowry, etc.

Promote Income Generating Activities

i) Identification of individual/ group activities

ii) Prioritization of economic activities for members according to needs

and resources available in village

iii) Create Awareness about the cluster production approach

iv) Sensitizing the need to Federate

v) Understand the strength and the potential of collectivity

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Advocacy

i) Encouraging in promoting more SHGs based on population in the

village.

ii) Encouraging to take part in decision making at the village level

iii) Encouraging participate/attend the training programme organized by

any developmental agencies.

Maintaining books of records

i) Membership Book

ii) Attendance book

iii) Minute Book

iv) Cash Book

v) Ledger

vi) Receipt and payment voucher

vii) Loan Document Books

viii) Individual Pass Book

ix) Bank Pass Book

x) Cheque Pass Book

xi) Labour register

xii) Monitoring Records

xiii) Visitor’s Book

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Essential Requirements to rate the performance of SHGS

Monitoring and Evaluation

Social Audit

Internal/External Auditing

Social Audit:

Implementing agency has to conduct a social audit on half yearly basis to know the

overall functions of SHG, such as maintaining of Books of accounts, loan utilization,

benefits, mind set of SHG and participation of members. Implementing agency has

to frame a checklist based on the activities the SHGs are doing for the last six

months.

Monitoring and Evaluation:

Quarterly activity monitoring through community participation.

Self Pictorial Participatory Impact Monitoring

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Implementing agency has to frame the quarterly monitoring format covering the

sector & sub sector relating to SHG functions. It will provide all the information to

implementing agency to know how the SHG are progressing or if they do need more

training or future guidance. Based on this information the implementing agency will

maintain the management information system at central level. The implementing

agency will be in a position to provide the day-to-day information to the donor

agency.

Internal / External Auditing

As any financial guideline the donor agency would like to know the utilization of fund

by the SHG. Quarterly Internal auditing of all the books of account is must in front of

the SHG members in a participatory manner and it will provide the transparency &

accountability among the members. Regular internal auditing will help the

implementing agency to know the performance of the SHG and it will encourage the

SHG to do the better work.

The group should maintain audit file and necessary action must be taken on audit

observations. The audit reports are the credibility report of the group evaluated by

the internal / external agencies which outside agencies believed on. It is also a

report financial status of the group and capacity to handle fund.

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CHAPTER – 8

RULES AND REGULATIONS

SHG BY-LAWS:

I. Name of the Groups :

II. Office Address :

III. Vision of the group :

IV. Objectives :

To establish forum wherein women can critically analyse their socio-

economic situation.

To build up self-confidence and spirit of cooperation among women

Economic empowerment of women in society aimed at self-reliance

and self-sufficiency.

To eliminate the role of money lender

To enable women to insure themselves against various types of risks

(e.g live, health, animals, crops etc.)

To establish linkages with banks, government line departments and

other institutions for socio-economic development through SHG.

V. Membership to the group

Eligibility criteria for membership includes:

a. Should be women who have attained above 18 years of age.

b. Not above 60 years of age.

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c. Should be mentally stable.

d. Should be actively involved in all the activities of an SHG.

e. Should fill in SHG prescribed application form and sign it.

The SHG members should endorse their application along

with signature of the witness.

f. Should pay their annual membership fees.

Membership is not restricted to the group on the ground of caste,

creed and language.

The SHG reserve the right to dismiss members who do not abide

by the norms or members whose behaviour is offensive to

objectives of the group.

In the event of resignation, death or mental ill health or if the

respective SHG members withdraws their recommendation the

membership will be cancelled. If the membership in the SHG is

cancelled the membership fees will not be refunded.

vi. Nominee

Every member should fill a nominee form and nominate a beneficiary.

In the event of death the nominee will receive only the saving amount and

interest propionate to her saving amount.

vii. Saving

The group will save a weekly, fortnightly and monthly amount

The saving amount will be first deposited in the bank if need they can

withdraw to give loan to its members only.

This money will be utilised only for advancing as loan to its members

mainly for income generative purposes and only partially for consumption

in the ratio of 80:20.

All the excess cash will be deposited in the bank.

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Funds received from the government and other institutions for

development activities can be managed as per the agreed terms and

conditions with the donor agencies.

Habits: Income – Saving = Expenditure

viii. Contribution

The members will contribute along with savings an additional amount as

per their requirement to meet their operating cost.

The saving, contribution, earnings, income and interest should be recoded

in the appropriate books of accounting at the time of meeting.

ix. Rate of interest

The rate of interest within the group should range between 1% to 2% per

month

The interest should be given every month along with the principal amount.

In cases of loan where the gestation period is long the only the interest

rate may be deposited.

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x. Loan

The loan will be given only to the group members.

Loan will be given in propionate to ones saving only.

Person desiring to take a loan should submit an application stating clearly

the purpose to the secretary before meeting starts.

Loan application by a member on their field of expertise will receive a

priority.

Loan will be extended primarily for income generative purposes

No person can submit more than one application at a time.

Loan applications will be discussed and decided by the group at the

meeting.

After it is approved by the group the person should fill in the loan schedule

and agreement of loan repayment.

The loan amount will be despatched at the meeting and in cases of

shortage of cash the secretary can withdraw from the bank and give it to

the person.

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xi. No Collateral Security

The principle of solidarity and peer pressure will be applied for the

repayment of loan.

As per the RBI norms, if the group wants to take loan from the bank, no

collateral security will be required. The bankers will follow 1:4 as per the

savings. For e.g. if the group having Rs. 1000/- balance in the saving

account, they can take loan of Rs. 4000/-.

xii. Meeting

Any member may chair the meeting, but, involvement of every member

should be encouraged.

The date, time and venue for next meeting should be decided in the

previous meeting.

The meeting should be held on rotation at member’s house or at a

common central place, which is accessible to all members, apart from

places of worship.

At every meeting the group will deliberate and discuss on one social issue

of the village decided by the group until they are able to find solution.

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xiii. Attendance

All the members who attend the meeting should sign the attendance

register and members who do not sign the attendance will be treated

absent.

Non-members who want to attend SHG meeting should obtain prior

permission from the group and they will not be allowed to vote or give

opinions.

If a member is not able to attend SHG meeting she should submit

application of leave to the president or inform the reason, which will be

read to the house and decided by the members.

A member who fails to attend SHG meeting without prior notice and leave

application will be fined Rs. 2 to upto Rs.10 per meeting as decided by the

group.

xiv. Proceeding of the Meeting

Singing of SHG anthem or Group song is must

Selection of Chairperson

Taking of chair by the chairperson of the meeting

The secretary will place the proceeding of the preceding meeting and the

president and the secretary will sign the proceeding only after the approval

by the house.

Reading out agendas for the meeting by the chairperson and taking other

agendas if any.

Discussion will be as per the decided agendas only.

The secretary/book writer should record all the proceeding of the meeting

in the minute book.

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The secretary should read out the proceeding and share the information

related to total saving, loan due, interest amount, interest due, earning of

the group and repayment of loan by the loanees during the meeting.

Vote of thanks for the meeting by any chosen member

xv. Quorum

A minimum of 75% attendance of the total membership will form a quorum

for a meeting

Decision taken at meeting below quorum will not hold value.

For emergency meeting a minimum of 50% attendance is required as a

quorum if a quorum is not obtained the meeting is postponed for an hour,

and when reconvened the meeting is considered official.

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xvi. Vote

If a group decides to elect its members, one person is eligible to vote only

once.

A member who has not paid their membership will not be eligible to vote.

In the event of any member getting equal vote chairperson of the SHG has

the deciding/casting vote.

xvii. Signatories

There will be two signatories of the SHG account viz. Secretary and

Treasurer.

Funds received from the government and other institutions for

development activities can be managed as per the agreed terms and

conditions with the donor agencies.

xviii. Roles and Responsibilities of Office Bearers:

President’s role: The president has to chair and preside over every meeting. He will

initiate the discussion on agendas that comes up in the meeting. The president can

call for a meeting in case if any emergency arises. He has to sign in the minutes and

cash book. In his absence the members will decide who will chair the meeting.

Secretary role: Secretary will be the member secretary in every meeting. He will

read out the minutes of the previous meeting for final approval and he will also sign

the minute’s book and cash book. He is also the authorize signatory for signing the

cheque books and cash withdrawal. He will monitor day to day activities of the

group.

Treasurer: The treasurer will collect the savings in every meeting. He will be

responsible for safe custody of the cash, cheque book and books of accounts of the

groups. He is also the authorize signatory for signing the cheque book or any

financial transaction. He will read out the financial transaction in every meeting.

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i) Rotation of Office Bearers once in two years in a phased manner. Rotation of

group leaders is preferable; however the group may like to take the final

decision.

xix. Amendment of Rules and Regulation

To amend the rules and regulation all the members of the group should be

present.

To amend rules and regulation of the SHG at least 80% of the members

should approve it.

xx. Distribution of income

All the movable and immovable asset of the group will be in the name of

the group.

Income and profits earned will be spent to fulfil group’s objectives.

Resources can mobilise through membership fees, donation, group

earning, grants savings, interest, social work contribution, etc. to meet the

group objectives.

Income from the collective business should be distributed equally among

the members

xxi. Termination

The SHG reserve the right to dismiss a member who do not abide by the

rules and regulations and whose behaviour is offensive to objectives of the

group.

Membership will be terminated to who fail to attend group meeting or

group programme consecutively for three meeting without prior intimation.

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If a member suppresses any kind of information in their application as

required by the group.

xxii. Withdrawal of membership

In the event of resignation the membership fees will not be refunded but

her saving and interest propionate to her principal amount will be

refunded.

In the event of death or mental ill health the nominee will receive the

saving amount and other benefits.

xxiii. Books of account, audit and renewal of group registration

Any funds, asset received must be recorded in a proper receipt and they

must be kept with the secretary or at the group office.

Cashbook must be written and closed at the meeting.

Bank passbook and chequebook must be kept at a secure place under the

care and custody of the secretary.

Receipt and payment must be made in the name of the group.

The group can keep a maximum of Rs.1000, as petty cash amount and

petty cash register must be maintained.

The group should maintain attendance register, minute register, saving

register cashbook, general ledger, Loan register, bank passbook,

individual passbook, asset register, audit file etc.

xxiv. Admission of new members

New memberships will be entirely decided by the groups. The criteria

mentioned at Membership to the group too apply here.

No individual can be a member in more than two groups.

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The rules, terms and condition are explained to a person desiring to be a

member of the group.

A person who is willing to abide by the terms, rules and regulation of the

group will be given a membership.

The admitted member should sign in the declaration of the rules and

regulation of the document.

xxv. Conflict Resolution

The group should solve all conflict within the group and if the group fails to

resolve the conflict the group can request the implementing agency or any

other competent organisation to resolve the conflict as a first step.

Miss appropriation of funds will be dealt with according to law.

xxvi. Linkages

SHG should compulsorily go for linkages with government line department

& financial institutions and other agencies to enhance the skills and

financial position.

xxvii. Dissolving

To dissolve the group all the members should be present and it should be

approved by all the members.

xxviii. Declaration:

The above-mentioned rules and regulations were read out to us/me and we have

understood the terms and conditions and signed the same.

44

Sl. No Full Name & Address Age Occupation Designation Signature

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

(Secretary) (President)

(Treasurer) (Vice President)

Witness

45

CHAPTER – 9

Training Modules for SHG

Module 1 – Group Management

I Organizational management

i) How to conduct meetings

ii) How to write proceedings

iii) How to draw up an agenda

Every member have to bring at least one agenda in a white sheet paper and put it

during the meeting for discussion, but it should be related with SHG benefits.

iv) Election of Office bearers.

v) Collective decision-making

It is important to take into account everybody’s view and discuss on it and take

collective decision in favour of the groups benefits.

Module 2 – Financial Management

I. Books of Records

i) Maintaining Minutes Register – All meeting discussion and decision

should be maintained. All the meeting agenda items, discussions and decisions

should be recorded in the register. It is also gives an idea about groups thinking as

reflected in their agenda and how frequently members come together to discuss

their common issues. Sample format are given below

Minute Register

Meeting No :

46

Meeting Date :

Meeting Place :

Meeting time :

Name of Chairperson :

Agenda items - (a) Review of follow up actions from the previous meeting minutes.

(b) Status of cash on hand on previous meeting.

(c) ….

(d) …..

(e) financial information (is compulsory as agenda item)

(f) Loan information (is compulsory as agenda item)

Decisions - (a) …

(b)….

(c)….

(d) Opening fund balance Rs. …….,/- transaction during the period

………..

Closing fund balance Rs. ………/- etc.

47

Signature of the Members present in meeting:-

Sl. No Name of the member of SHG Signature/Thumb Impression

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

Signature of Chairperson Signature of Secretary

48

II. Attendance Register – To maintain meeting attendance record to know members participation in meeting.Sample format are given below:

ATTENDANCE REGISTER

Date……..Month………….. Year………………:

Meeting Date :

Meeting No :

Meeting Place :

Members’No.

Name of Member Sex(Male/ Female)

Meeting time :

Total Present

Total absent

Signature of Secretary

49

III. Maintaining of Loan Register: - Loan register is important to keep record of loan transaction and to find out

balance/ outstanding of loan amount. It helps loan balance tracking and collection, know the purpose of loan taken,

and regularity in repayment of loan. The loan number can be used as unique identification number and Cash Book

page number will help in cross verification of records. The loan register will also provide information on regularity of

loan repayment and interest payment. The members signature and group leaders signature will work as prove of

receipt and payment of money. (Sample format are given below)

LOAN REGISTER

Members’ Name :

Repayment Schedule Date

Loan No

Purpose of Loan

Cash Book-page no.

Loan Amount

Interest rate

Date of First Installment

Loan Repayment term

No. of Installments

Amount per Installment

Loan Amount repaid

Balance amount

Loan Interest paid

Signature of Group Representative

Signature of Member (who took loan)

50

IV. Savings Register:- It is Important to maintain savings register to keep record of members contribution / saving

records. The saving amount is generally refundable and so it is important to know how much each member had

contributed. Sample format are given below:

SAVING REGISTER

Date………….Month…………….Year………………

Member

No.

Name of members Sex

(Male/ Female)

Date:

Meeting No :

1

2

3

4

5

6

7

8

9

10

11

Total

Cash Book Folio number

51

V. Cash Book:- Cash Book must be maintained to record all financial transactions and periodical report prepared

out of it. This primary data of cash and bank transactions to be recorded during meeting (as and when transactions

occur). The Cash Book also gives the information of cash balance and bank account balance. The narration of

transaction should be clear to give the idea of expenditure. Receipt and expenditure voucher numbers should reflect in

the Cash Book for future cross verifications. Sample format are given below.

Cash Book

1 1

For the month of JUNE 2009

Date Particulars Voucher No.

L.F Cash Bank Date Particulars VoucherNo.

L.F Cash Bank

28-06-09

Opening Balance

Nil Nil 28-06-09

Printing & Stationary (Group

seal)

1 5 150

28-06-09

Group Social work

contribution

1 1 1000

28-06-09

Members saving 2 3 150

28-06-09

Donation (From Mr X)

3 4 500

Total Exp 150 NilClosing Balance

Cash1500 Nil

Grand Total 1650 Nil Grand Total 1650 Nil

RECEIPTS PAYMENTS

52

Cash Book

2 2

For the month of JULY 2009

Date Particulars Voucher No.

L.F Cash Bank Date Particulars Voucher

No.

L.F Cash Bank

05-07-09

Opening Balance 1500 Nil 05-07-09 Printing & stationary (Registeredpurchase)

2 5 150

05-07-09

Members saving 4 3 150

05-07-09

Deposited in Bank C 1000 05-07-09 Deposited in Bank 3 C 1000

05-07-09

Admission Fee at the rate of Rs.30 x

15 members = Rs. 450

5 2 450

05-07-09 Printing & stationary (Seal prepare)

4 5 50

Total Exp 1200 Nil

Closing Balance Cash

900 1000

Grand Total 2100 1000 Grand Total 2100 1000

RECEIPTS PAYMENTS

53

Cash Book

3 3

For the month of AUGUST 2009

Date Particulars Receipt

No.

L.F Cash Bank Date Particulars Voucher

No.

L.F Cash Bank

12-08-09

Opening Balance 900 1000

12-08-09

Members saving 6 3 150 12-08-09 Loan sanctioned (To Mrs Z for purchase of

cow)

5 6 800

12-08-09

Donation (from Mrs. Z - Cheque

No. 65653)

7 4 1000 12-08-09 Loan sanctioned (To Mrs W. for purchase

of cow)

6 7 800

12-08-09

Cash withdrawal from Bank

C 1000 12-08-09 Cash withdrawal from Bank

C 1000

Total Exp 1600 1000

Closing Balance Cash

450 1000

Grand Total 2050 2000 Grand Total 2050 2000

RECEIPTS PAYMENTS

54

VI. General Ledger – General ledger is important to know the head wise expenditure as and when required to

control cost and to find out deviation of estimate to take necessary corrective measures. The ledger information /

transaction posted from primary book call Cash Book and also Journal Register. Only the contra entries i.e. group

cash amount transferred and deposited in bank or amount withdrawn from cash amount and taken in cash are not

posted in ledger. The journal /adjustment entries are not recorded in Cash Book and so it is posted in ledger from

Journal Register. Sample format are given:

1 2

Ledger : Group Social Work Contribution Ledger : Admission Fees

Date Particulars CBF No.

Debit Credit Balance Date Particulars CBF No.

Debit Credit Balance

28.6.09 1 1000 1000 (Cr)

5.7.09 2 450 450 (Cr)

55

3 4

Ledger : Members Saving Ledger : Donation




28.6.09 1 150 28.6.09 Mr. X 1 500

5.7.09 2 150 12.8.09 Mr. Y 3 1000 1500 (Cr)

12.8.09 3 150 450 (Cr)

56

5 6

Ledger : Printing & Stationery Ledger : Loan to Mrs Z




28.6.09 Office seal 1 150 12.8.09 3 800 800 (Dr)

5.7.09 Register 2 150

5.7.09 Round Seal 2 50 350 (Dr)

57

7 8

Ledger : Loan to Mrs. W Ledger : ________________




12.8.09 3 800 800 (Dr)

58

VII. Labour Payment Register – Whenever members take up group labour activities they should maintain labour

register. The format should include labour attendance, contribution (if any) payment with proper receivers signature.

The expenditure should properly record in Cashbook also.

Component/Work :-_________________________

Sl.No Members’ Name

Sex (Male/ Female)

Month……………………………

P = Present, A = Absent

No. of total days worked

Labour rate per day

Total Labour Charge

Community Contribution (at the rate ___%)

Net amount paid

Receivers Signature

Total

Cash Book Page No.

Voucher Number

59

VIII. Bank Pass Book – The group should maintain bank pass book for recording

fund balance and reconciliation of and transaction with Cash Book. There will be

credit of fund with bank interest and debit with bank charges, which should be

verified and reflected in Cash Book.

IX. Individual Pass Book – The members have to be maintain individual pass book

to keep track of individual members savings record. In this book, loan information is

also recorded for individual members’ information to keep record.

Individual Saving Pass Book

Date Saving in Rs. Withdrawal in

Rs.

Balance in

Rs.

Secretary

Signature

60

(b) Loan Record

Date Loan

Issued

Interest

on loan

Loan

Repaid

Loan

Balance

Members’

Signature

Secretaries’

Signature

61

X. Asset Register – The group have to be maintain an Asset Register when they

have innumerable number of asset. All the assets have to be marked with

identification number and it have to be recorded in register along with other

information such as date of purchase, cost price, location/issued to etc. The same

asset should use only for group work and stored in proper place to make available at

the time of requirement. Sample format given below.

Asset code/ ID No

Particulars Model No/ serial No

Unit Purchase Date

Cost Price

Issued to Remarks

(ID number marked by the group)

(Which firm supplied, challan no, bill no and date)

( Incase of machine serial number given by manufacturer)

(Number of unit)

(Allotted to whom/which staff)

(Condition of asset and any other important information)

XII. Stock Register:- All the consumable items received / purchased have to be

recorded in stock register at the time of receipt and issue to avoid mis-utilization.

The stock register has to be properly index with contents and different pages for

different item. Sample format are given below.

Stock register

Name of item _________________

Date Description Received Issued Balance Receivers’ Signature

Stock in charge signature

(to record challan no for receipt and requisition details for issue)

62

XIII. Audit File: The group should maintain audit file and necessary action must be

taken on audit observations. The audit reports are the credibility report of the group

evaluated by external agencies which outside agencies believed on. It is also a

report of the financial status of the group as well as the capacity of the group to

handle fund.

XIV: Money Receipt – The group must issue money receipt for all financial receipt.

The Receipt Book should have provision for duplicate (Carbon) copy and not counter

folio system. The duplicate copy should be with the group in the receipt book will

help in cross verification of receipt of money and chances of manipulation will be

less. Fund received, as per money receipt book should reflect in Cash Book so that

temporary use of group fund for personal use, if any can be detected and stop.

XV: Transparency and Accountability

The group should know how to account all the community resource (financial and

non-financial) and importance of transparency in the group to build trust among

members.

XIV. Maintenance of Monitoring Records – The group has to be maintaining

monitoring report file to know the overall progress of the group and take corrective

step within the time.

Module 3 – Performance Assessment / Grading of SHG:

Self Help Group assessment has to be carried out after completing six months. This

grading assessment is to be conducted on a regular basis. Group performance

assessment /grading should be done accordingly by fulfilling the following pre-

conditions:

Books and records should be checked before the performance

assessment /Grading start.

Regular saving has to be established.

Internal lending has started.

63

Completion of at least two training modules.

Group should be six months old and above from the inception.

Performance assessment /Grading result should be made known to the

group.

Time, date, place should be fixed with group before conducting the

Performance assessment /Grading of the Group.

Criteria to conduct the Performance assessment / Grading of SHG as follows:-

SELF HELP GROUP (SHG) ASSESSMENT (Format):

Name of SHG

Habitation/Project Village

District Block: Project Cluster:

Date of Inception (dd/mm/yy)

Size of the group

Schedule of Meetings:

SHG Saving Bank Account No

Name of the Bank & Branch:

Total Group corpus (including all sources). Rs.

Total SHG saving

(both group & individual level saving)

Rs.

S.N. INDICATORS

(Encircle the response and put the marks accordingly)

MARKS ALLOTED

MARKS SCORED

I. FINANCIAL INDICATOR

1. Financial Transactions in the Group (During the last one year

Out of 8

64

a) All fund collections from members, financial decisions and disbursements of loans to members are made in the group meetings

8

b) All fund collections from members, financial decisions are made in the meetings but loans are disbursed outside group meetings

6

c) Fund collections from members are made outside meetings but loan decisions are taken during the meetings

5

d) Both fund collections from members and financial decisions are taken outside the meetings

0

2. Member Awareness about all Financial Transactions Out of 8

a) All members are aware about all financial transactions 8

b) Above 75% of the members are aware about all financial transactions

6

c) Less than 50% of the members are aware about all financial transactions

4

d) None are aware about all financial transactions 0

3. Regularity of Savings (During the last one year Out of 8

a) 100% on time payments of savings by members 8

b) 90% on time payments of savings by members 6

c) 70% - 90% on time payments of savings by members 3

d) Less than 70% on time payments of savings by members

1

4. Pattern of Internal Lending Out of 8

a) Need based loans availed by many members 8

b) Need based loans availed by few members 6

c) Equal distribution of loans among all members 3

d) Loans extended repeatedly to only a few members in the group

0

65

5. Loan Frequency: Number of loans taken by the members. (Older groups – 2 and above years)

a) 100% members taken loans more than two times a year - 8

b) More than 80 % member taken loans at least once a year - 4

c) Less than 60 % members taken loan - 2

a) Over 2 times 4

b) Over 1.5 times 3

c) Between 1 – 1.5 times 2

d) Less than 1 time 1

6. Repayment Terms Prescribed Out of 4

a) Monthly installment /repayment 4

b) Quarterly installment/repayment 3

c) Lump sum payment / repayment 2

7. Repayment pattern Out of 8

a) Regular repayment of principal and interest in full or monthly basis

8

b) Regular repayment of principal in part and interest in full on monthly basis

4

c) Regular repayment of only interest in full on monthly basis

1

d) Repayment at the end of loan period 1

8. Percentage of Repayment Out of 8

a) 100% with no over due 8

b) 90 – 99% with rescheduling 4

c) 85 – 89 % with rescheduling 2

d) Less than 85 % with rescheduling 0

9. Borrower quality (no. of defaulting members) Out of 8

a) Less than two members 8

b) Between 2-5 members 4

66

c) More than 5 members 0

10. Up to date maintenance of records Out of 10

a) Adherence to the group’s by laws 1

b) Attendance at the meeting 1

c) Financial decisions taken at the meetings 2

d) Savings collection 2

e) Loans disbursements 1

f) Repayments 1

g) Member – wise savings and loan portfolio 2

11 GROUP’S SOURCES OF FUND (1 & above years old group)

Out of 8

a) More than Four sources of fund (Bank, Govt. Group IGA, Group’ Savings, etc.)

8

b) More than Two sources of fund 4

c) Group’s saving is the only source of saving 2

d) No increment in monthly savings over the year 0

II ORGANISATIONAL INDICATOR

1 Feeling of belongingness / homogeneity / solidarity (observed during group interaction

Out of 4

a) Very strong 4

b) Moderate 2

c) Not very much 1

2 Governance issues (additive value) Out of 6

a) Awareness about objectiveness of self help groups programme

2

b) Awareness about rules and regulations of group functioning

1

c) Leader responsibility sharing by group members 2

d) Awareness about member wise saving and loan position 1

3 Conduct of meeting (during last one year Out of 8

a) Meeting are held regularly as per fixed date, time & place

8

67

b) Meeting are held regularly once a month but at the convenience of all members

6

c) Meetings are not held regularly but they are conducted as per fixed date, time and place

4

d) Meetings are irregular 2

4 Attendance of members in the meetings (during the last one year

Out of 8

a) Above 90% in all group meetings 8

b) 70 % -90% in all group meetings 6

c) 50 % - 70 % in all group meetings 4

d) Less than 50 % in all group meetings 0

5 Participation of members in group proceedings

Out of 4

a) Active by majority 4

b) Moderate 2

c) Domination by few noticed 0

6 Annual action plan for the SHG (e.g.: increasing saving, accessing to bank finance, livestock vaccination, seed supplies, use of new cultivation technique, social and community activities etc)

Out of 4

a) Yes, finalized 4

b) Under preparation, being finalized 2

c) Not yet prepared 0

7 Change of office bearers Out of 4

a) All new 4

b) Some new, some repeated in other post 2

c) All repeated in other post 0

III SOCIAL INDICATOR

1 Social activities taken up by SHG (e.g.: enrolling school dropouts, support to orphans, old persons, handling alcohol & drug addiction etc)

Out of 8

a) Four or more (pl specify) 8

b) Two or three (pl specify) 4

68

c) One or two (pl specify) 1

d) None so far 0

2 Community activities taken up by SHG (e.g.: road, school building, community hall cleaning etc)

Out of 8

a) Four or more (pl specify) 8

b) Two or three (pl specify) 4

c) One or two (pl specify) 1

d) None so far 0

IV/V GRADING/ASSESSING OFFICER’S OBSERVATIONS

(For 1 & above year old group)

Out of 8

Group is keen about increasing their corpus fund (Group/members have taken up diverse activities, linkages, etc.)

Gradual increase in the number of entrepreneurs in the group

Improvement in group’s assets

More members attend Public meetings.

The women leaders’ voices are heard in the traditional authority system.

Village authority/Government entrusting the group to take up Programmes

Members are capable in solving conflicts in the group and outside

Increased numbers of leaders in the group over the year

Influencing village/s, local government (VDCs/PRIs, BDO, MLAs/Ministers, etc. )

1

1

1

1

1

1

1

1

TOTAL MARKS FOR ALL 20 QUESTIONS 146

69

OVER ALL OBSERVATIONS AND COMMENTS

The Assessment criteria seems ok, provided it is carried out properly –

which is TIME CONSUMING

The Groups need to be Assessed vis-à-vis their By-laws. All groups

need to have their By-laws written in separate sheet of paper/booklet –

the Rating agents should be able to see that there are

modifications/refinement of by-laws as per the need of the group

members as they become mature.

Calculation of Percentage:

Total group Score Mark X 100 / 146 = Percentage (%)

e.g. 90 X 100 / 146 = 61.64 (approximately) = 62

(Total group score mark X (multiple by) 100 / (Divided) 146 (Total Marks)

To identify the Grade

A Grade = 70 % and above

B Grade = 60% and above

C Grade = 50% and above

D Grade = 50% and below

70

Module 4 – Linkage

Once the group performance assessment / grading score reach 50% and above, it is

advisable to initiate for direct linkage with the Financial Institution.

Forms for application of loan may differ from bank to bank depending on the

financial institution where the SHG’s are maintaining a saving account.

(Sample format of State Bank of India for Inter Se Agreement, Loan application form,

sponsorship letter, financial statement of group, etc is given below)

Inter Se Agreement Letter

This Inter Se Agreement Letter is a critical document where all the members are

involve in the decision making process of the group interests and activities. It gives

all the names of the SHG Group members coupled with their relationship and age.

This document also specify the intention of the SHG Group which is most primarily

to carry on the credit and thrift together with the economic activities mean for mutual

benefit of all group members. It adopted a number of rules and regulations for

governing the SHG Group smoothly in a scientific manner and systematic

organization that are mutually agree upon by all the SHG members. An example of

the Inter Se Agreement is given below:

INTER SE AGREEMENT

This Agreement made at ___________________________________ on this

___________________ day of ____________________ 20________ between

1. Shri/Smt/Kum__________________________________________________

Son/Wife/Daughter of _____________________________ aged ____ years.

2. Shri/Smt/Kum__________________________________________________


71

3. Shri/Smt/Kum__________________________________________________


4. Shri/Smt/Kum__________________________________________________


5. Shri/Smt/Kum__________________________________________________


6. Shri/Smt/Kum__________________________________________________


7. Shri/Smt/Kum__________________________________________________


8. Shri/Smt/Kum__________________________________________________


9. Shri/Smt/Kum__________________________________________________


10.Shri/Smt/Kum__________________________________________________


72

11.Shri/Smt/Kum__________________________________________________


12.Shri/Smt/Kum__________________________________________________


13.Shri/Smt/Kum__________________________________________________


14.Shri/Smt/Kum__________________________________________________


15.Shri/Smt/Kum__________________________________________________


16.Shri/Smt/Kum__________________________________________________


17.Shri/Smt/Kum__________________________________________________


18.Shri/Smt/Kum__________________________________________________


73

19.Shri/Smt/Kum__________________________________________________


20.Shri/Smt/Kum__________________________________________________


Who are members of the ____________________________________________

group. Hereinafter referred to collectively as _______________________Self Help

Group or SHG Members in short, which expression shall, unless repugnant to the

context or meaning include every member of the said SHG with intent to carry on

savings and credit and other economic activities for mutual benefit subject to the

terms and condition hereinafter appearing.

NOW THEREFORE THIS AGREEMENT WITNESSETH THAT

1. Each member of the SHG shall save a sum of Rs ___________________

(Rupees ________________________________________________ only) or

such sum as may be decided by the group by general consensus from time

on weekly/fortnightly/monthly basis which shall be deposited with the

authorized member of the group.

2. Each member shall strive for the success of the SHG and shall not act in any

manner detrimental to the business interests of the SHG.

3. The SHG members shall be jointly and severally liable for all the debts

contracted by the SHG.

4. All assets and goods acquired by the SHG shall be in the joint ownership of

all the members of the SHG and shall ordinarily be in the constructive custody

of such member as may be authorized by the group.

74

5. The SHG members hereby duly elect and appoint

Shri/Smt/Kum ________________________ as ______________________

Shri/Smt/Kum ________________________ as ______________________

Shri/Smt/Kum ________________________ as ______________________

Hereinafter called as authorized representatives to look after and manage the

day-to-day affairs of the SHG’s activities and also act in their name and on

their behalf in all matters relating thereto. The authorized representatives

may, however, be changed at any time by majority vote of the members and

new representatives elected in keeping with the management practices of the

SHG.

6. Each of the SHG Members hereby agrees to abide and ratify all such act,

deeds and things as the authorized representative may do in the interest of

the group.

7. The authorized representatives shall take decisions in the day working of the

SHG and each representative shall actively involve herself or himself and co-

operate in looking after the day-to-day affairs of the SHG activity, in particular

to attend to the following activities that are delegated to them.

8. The SHG members hereby specifically authorize the representatives:

a) To keep or cause to be kept, proper books of accounts of the savings

made by the SHG members, financial assistance/loans granted to them

and the recoveries made from them and render every year full accounts to

the SHG members for their approval and adoption.

b) To receive all payment due to the SHG and issue requisite receipts or

acknowledgements for and on behalf of the SHG.

c) To institute and defend on behalf of the SHG Members any legal

proceedings and safeguard the interests of each member of the said SHG

and for this purpose engage or disengage any lawyer or advocate or

agent and incur the necessary legal expenses in connection therewith.

75

9. The SHG members hereby specifically authorize the above authorized

representatives to open savings bank account, fixed deposits and other

account in ______________________________ Bank and operate the same

under the joint signature of any two of the above authorized for this purpose.

Shri/Smt/Kum _____________________________________

Shri/Smt/Kum ____________________________________

Shri/Smt/Kum ____________________________________

10.Every member of the SHG hereby authorizes the representatives to:

a) Apply for financial assistance from Federation/Apex Federation on behalf

of the SHG and execute necessary agreements/documents and valid

acknowledgement of debts/liability on behalf of the SHG for the purpose.

b) Collect financial assistance amounts from Federation/Apex Federation on

behalf of the SHG deposit the same in the savings account of the SHG for

on lending to members in accordance with the decision of the SHG and

c) Repay installments of SHG towards the settlement of financial assistance

account of SHG with Federation/Apex Federation.

11. In the event of death of any of the members of the SHG, his/legal heirs shall

be entitled for the benefits and be liable for the obligations of the deceased

member under this agreement.

12. It is agreed that no new person shall be included as a member of the SHG

without consent of all the existing members.

76

IN WITNESS WHEREOF the aforesaid members of the SHG have set their

respective hands hereunto at ________________________________ (place)

on the ____________________ (day) of ______________ (month)

__________ (year).

Sl. No Name of the member of SHG Signature/Thumb Impression

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

77

1) Loan Application Form

To get any financial assistance from Apex SHG Federation or any other financial

institutions an SHG has to apply in the Loan Application Form. The detail information

of the SHG Group has to be specified in the Loan Application Form such as date,

address of the financial institution, etc. In the Loan Application Form the particular

SHG who apply for financial assistance should mention their correct SHG name,

Reference of Federation/Association, loan purposes and full address. The Bank

Account signatories or authorized representatives with names and designation

should be properly mentioned. The total number of group members both at the

commencement and current / present members should also be highlighted. Whether

the SHG group is male or female group should be given in the Loan Application

Form. It is always better to give the saving history of the SHG group particularly the

current total savings amount and regular savings per member of the group. The

SHG group number of loan given and amount loan disbursed, outstanding amount

due as on date of loan application and repayment period need to be mentioned

appropriate in the application form. This would help better to understand the credit or

financial discipline of the SHG group. The amount of loan applied and the purpose

for which the SHG has apply for loan, installment period and number of installments

and final repayment date must properly indicated in the application form. Finally, a

copy of the resolution to borrow loan by all members of the SHG group must be

enclosed or attached along with the Loan Application Form. At the end of the Loan

Application Form the names, signature and full designation along with Group Seal,

place and date of authorized group representatives must be mentioned correctly for

verification. An example of Loan Application Form is given below:

78

LOAN APPLICATION FORM

Date ______________________ For Office use only

To:

President/Secretary/Credit Manager

_______________ Apex SHG Federation

West Garo Hill District, Meghalaya

Dear Sir/Madam,

We, ________________________________________________ (Name of SHG),

hereby apply for financial assistance for further extending loans to members of our

Self Help Group. We furnish below the necessary particulars.

I. PARTICULARS OF GROUP AND FINANCIAL EXPERIENCES

1. Name of the group/member : _________________________________

2. Group Code : _________________________________

3. Ref. By Fed/Asso. Code : _________________________________

4. Product Code : _________________________________

5. Loan Purpose : _________________________________

6. Full Address _____________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

Regn No. __________________________

Loan Appl No. ______________________

F.A. __________________________

Repeat Group: Yes / No

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7. Bank Account Signatories

a) Mrs/Ms/Mr ______________________________ __________________

(Name) (Designation)

b) Mrs/Ms/Mr ______________________________ __________________


c) Mrs/Ms/Mr ______________________________ __________________


8. Total No. of members at the commencement of the group (State the year of

formation____________) is:__________; Female: _______ Male: _______

Total No. of members at present is: _______; Female: ______ Male: _______

9. Saving history of Group for the period ___________ to __________ (Date/

Month/ Year)

No. of members

in the Group

No. of Months Total group

Savings

Avg. monthly saving

per member

10. Receipts & payments a/c for the period _____ to _____ (For 6 months and

above old groups only)

Receipts Rs. Payments Rs.

Opening balance –

cash

Loans given

Opening balance –

bank

SHG expenditure – revenue

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Savings of members SHG expenditure – capital

Membership fees Repayments of loans taken

by SHG

Fines Interest repayments on

taken loans by SHG

Bank interest Savings withdrawn by

members

Loan interest Other uses

Loan recoveries Closing balance –cash

Loans taken by SHG Closing balance - bank

Grants received

Other sources

Total

Note: Attached Annex Audited Financial Report for last 1 to 3 years

11. Particulars of loans currently outstanding from Group’s Corpus fund.

RepaymentNo. of loans Disbursed

Amount of Loan disbursed

Outstanding Amt. as on dt. _______

W M Q Y

Repayment Amount Rs.

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12. Internal lending and recovery of the Group for the period _________ to

___________

No of Members Received Loans

No of Loans Disbursed

Loan Amt. Disbursed Rs.

Loan Amt. Recovered Rs.

Average Monthly Recovery Rs.

Overdue as on Date.

13. List of all agencies from whom Grant/Loan was received

Name of the Agency Loan Grant Amt received Date of Receipt

Sub-Total

Grand Total

14. Particulars of loans currently disbursed & outstanding to members from

outside agencies. Name of the Agency……………………………………………..

Source of Loan

Loan Date Amount of Loan Disbursed

Outstanding Amt as on Date

Repayment Monthly / Periodicity

Repayment Amount Rs.

15. SHG Loan performance.

Loan Date -

No of Members Received Loan

No of Loans Disbursed

Loan Amt. Disbursed Rs.

Loan Amt. Recovered Rs.

Avg. Monthly Recovery Rs.

Overdue as on Date

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II FINANCIAL ASSISTANCE APPLIED FOR:

Loan Purpose ______________________________________________________

Rupees ________________________________________ Rs._______________

III REPAYMENT

We hereby undertake to repay the Financial Assistance as follows:

Equated monthly / quarterly/ half yearly / annually or irregular installments as

scheduled below.

Installment amount: Rs. ______________________________________________

No. of Installments: _______________________________________________

Final Repayment date: _______________________________________________

IV A copy of the resolution to borrow executed by all the members of the group

authorizing us inter-alia to borrow on behalf of the group is enclosed.

V DECLARATION

We hereby declare that the particulars given above are true and correct to the best

of our knowledge and belief.

We hereby, authorize the Federation/Apex Federation, hereinafter called (Name of

the Federation/Apex Federation), to disclose all or any particulars of details or

information relating to our Financial Assistance A/c with (Name of the

Federation/Apex Federation) to pay other Financial Institutions / Government

Departments or any other Agency (i.e.) as may be considered necessary or

desirable by (Name of the Federation/Apex Federation).

(Name of the Federation/Apex Federation) may disqualify us from receiving any

credit facilities in case it is proved that the declarations of our outside borrowing

made above contain misrepresentation of facts.

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We hereby declare that we have no borrowings from any other Agency on the date

of application, for the same purpose, other than what has been indicated above.

We undertake not to borrow from any other Agency without the permission of (Name

of the Federation/Apex Federation).

We hereby undertake to pay at the time of the first disbursal of the Financial

Assistance, service charges equivalent to ________% of the total Financial

Assistants amount calculated for every year or part thereof over which Financial

Assistance installment repayments are speared/ scheduled.

Applicants (Authorised Representatives)

Name Signature Full Designation

1. ____________________ ________________ __________________

2. ____________________ ________________ __________________

3. ____________________ ________________ __________________

Place: ________________ (Group Seal Across all the three Signatures)

Date: ________________

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Module 5 – Entrepreneurship Development Training

Setting up of a business (trading/production unit/) and generating employment (self

and or others) in a sustainable manner.

Setting up of an enterprise involves deployment of means of production (man,

material and capital) and undertaking risk with an aim to make profit.

i) Survey availability of local resources and skill availability

ii) Survey of the IGA in the village

iii) Identify entrepreneurs

iv) Setting of enterprise

v) Identify local needs

vi) Training on specific enterprise, such as

a. Agriculture: Seasonal vegetables/home garden, arecanut/tea

nursery,

b. Horticulture: floriculture, pineapple, cashew nut, passion fruit,

banana, etc.

c. Animal Husbandry: fishery, poultry, duckery, piggery, dairy, etc.

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d. Non farm Enterprise: Handloom and handicraft, weaving, tailoring,

grocery unit, bakery unit, spice grinding-cum-rice mill, food

processing, vegetable vendors, etc.

Marketing and Value Addition

i) Basic Conceptual clarity on Collective marketing, market

information and pricing.

ii) Training on pricing – Local and outside markets.

Collective Marketing:

What is collective marketing?

It’s the system of marketing of products (mostly rural produces) through a single

window operated by a community owned group functioning in democratic principle

for better realization of value.

Why Collective Marketing?

a) Risks and benefits are shared

b) Sufficient marketable volume can be built up

c) Can target a bigger market/buyer/higher level resulting in enhanced profit.

d) The transportation cost and marketing costs can be minimized resulting in

higher profit

e) Better negotiating power and more empowerment of community.

f) Scope for better quality control.

g) More capital accumulation through collective contribution

h) Division of labour.

i) Can use a common brand name for identity and market preference.

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Collective marketing Approach

a) Formation of Specialized marketing committee.

b) Mapping the marketable surpluses.

c) Orientation of the CBO (concept sharing, capacity building, Financial linkage,

business planning).

d) Necessary infrastructure (collection points, quality check, weighing, logistics,

storage godown, drying/washing etc as per need).

e) Market linkage (Market search, negotiation, linkages)

f) Profit sharing.

g) Planning for the next produce/season.

SHGs need to be Federate at the cluster level and the district level for

marketing point of view:

a) To built up marketable volume

b) To enhance negotiation power

c) Better realization of value

d) Market access to both small farmer and big farmer

e) More financial power and better financial linkage.

f) Better access to services from government and other agencies.

Marketing Information:

To collect Information about the market place, the marketing channel, the price, the

products and their varieties in demand, the competitors, the dynamics of taste and

preference of customers etc.

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Importance of Market information:

Without market information one cannot plan production, processing or marketing.

How to collect market information:

Market survey/research, Consumer survey, market scanning, Historical data

collection, secondary data, collection of information about competitors, Channel

member interview or interaction, News papers/magazines, internet and other

electronic medium including telephone.

Documentation of market information:

Market information should be properly documented and preserved for present and

future use. Use of graphical/ pictorial /tabular representation can be more useful.

Take care to prioritize the database. Analysis of data and interpretation should be

properly recorded for strategizing and justifying actions.

How to use market information:

The market information has to be analysed and interpreted for marketing decision

making. Historical data is to be used for forecasting and production planning.

Pricing:

Pricing means fixing the price of commodity for the buyer (customer/consumer).

How are prices fixed?

Cost based, Market based, Quality based, Premium pricing (through niche

marketing).

Importance of pricing strategy:

Pricing is important for realizing profit and growth of enterprise, for creating demand,

customer satisfaction and preference, to create a market image and compete in the

market.

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Value Chain Analysis/Development

1) Value chain analysis constitutes an economic system organized around a

particular commercial product.

What is it?

It is a tool to know what are the input/s (material/techniques/technology/

methodology) left behind to get the maximum benefit/profit for particular

commercial enterprise.

2) Explain value chain concept and benefit

a) Value Chain Analysis why –

- model and situational analysis

- understand functions, bottlenecks, failure & opportunities

- tool to develop a joint vision, objectives & strategy

- tool to monitor impact

- facilitate business decisions

Why value chain analysis?

- It analyze a situation

- It gives a clear picture what are the steps not done/not fulfilled

- It says about other opportunities for particular field

- It says about the missing link/gaps

- It says about the strategy/procedure/future role of development

- It clearly says the bottleneck of outmost development.

- It will collect/invite all possible options to accomplish the task and will

select the most suitable/productive ones.

- It will enable one for quick & assured results

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b) Guiding rule

- Identification of stakeholders/ value chain actors and their respective socio-

economic characteristics

- Mapping of value chains

- Value addition at producer & trader level

- Illustration of mark-ups and profit

- Identification and evaluation of sources of information

- Identification and evaluation of business/financial support (satisfaction)

How to go about for value chain analysis?

- It is a TEAM effort and all the team member has to contribute for the process.

- If some gap is found in the process that has to fulfill( most important)

- What may be alternative way to accomplish the work need to analyze

- People’s acceptability and economic profitability are key factor for analysis

Process of Value Chain Analysis: Example Wet rice cultivation (WRC)

1. The first and foremost requirement of VCA is the person/s who is doing VCA

has to be very much familiarized to the community/farmers/target groups so

as to capture the real picture of the actual situation.

2. Ask the farmers how they usually do WRC and list them

3. What may be the alternative way of doing the same work( both from farmers

& Interviewers view)

4. What may be the possible interventions that will increase production & quality

profitability of the farmers ( List & Suggest)

5. Credit requirement/ analyze & suggest

6. After plantation and management, analyze & suggest

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7. Harvesting/post harvest management/value addition opportunity has to

analyze and suggest.

8. Selling at right time/farm/businessman for maximization of profit.

9. After all this analysis the best possible inputs need to list in collaboration with

the farmers that will give him the maximum profit with least investment.

c) Basis of Sub-sector selection

Business Development:

1. Product Development

The development of any product takes time and effort as well as an understanding of the target market and how the product can appeal to the target market. For product development it should consider different elements of the organization to understand the way in which products can be developed to satisfythe market.

The problem and solution • The importance of segmentation• Product development process• Monitoring and controlling

2. Product Pricing

The product price depend on different factors like market demand and supply, cost of production etc.

Pricing of product :• Demand and Supply interaction major influencer in price• Price varies on daily/seasonal/annual basis• High demand---low supply: high price• Low demand---high supply: low price• Low price leads to high sales volume (for price elastic products)• High price leads to low sales volume (for price elastic products)

How to price your commodity – other factors• Going market price: As per the market price (needs market scanning and

selection).• Cost leadership pricing: As a low cost supplier (for competitive

advantage).• Premium pricing: Usually based on premium quality/uniqueness of the

product (But before everything, you need to know your own cost).

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Calculation of Cost – How Cost of Production affect price:• Labour cost• Material Cost• Processing cost• Overheads (administrative/services)• Packaging• Storage• Cost of Transportation: Labour, Freight, Taxes • Cost of Selling/marketing:• Administrative• Warehousing• Documentation• Cost of wastage/loss of value/loss of weight: Depends upon the

commodity

Quantity purchased by consumer effected by:• Price of goods • Taste and preference• Number of consumer • Income • Price of competing goods • Change in taste, attitude of the customer over time

Calculation of Price• Total Cost • Add : Desired profit• Add : Margin to Intermediaries

(Stockiest, Wholesaler, Retailer as the case may be) • Add : Taxes if applicable: • Resulted MRP / Price of product

3. Product life Cycle

Product life cycle (PLC) is the life of a product in the market with respect to business/commercial costs and sales measures. To say that a product has a life cycle is to assert four things: 1) that products have a limited life, 2) product sales pass through distinct stages, each posing different challenges, opportunities, and problems to the seller, 3) profits rise and fall at different stages of product life cycle, and 4) products require different marketing, financial, manufacturing, purchasing, and human resource strategies in each life cycle stage.

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Different stages of Product life cycle

Product introduction stage Growth stage Mature stage Saturation or decline stage

Management of product on consideration to Product life cycle

4. SWOT Analysis

SWOT (Strengths, Weakness, Opportunities and Threats) analysis is the tool to analyse the market situation. The SWOT analysis is the first step in putting together a marketing plan or business plan for any product/business. The SWOT analysis can be very subjective and so better to take caution also.

Strengths: what are the strengths of your product? What makes it better than other products? Are these strengths being sufficiently exploited? Are they being sufficiently defended?

Weaknesses: what are the weaknesses of your product? What makes it inferior to other products? Are there strategies you should be adopting to offset these weaknesses? Should you be removing these weaknesses completely?

Opportunities: what external factors are there that could be embraced if appropriate resources were allocated?

Threats: what external factors are there that threaten to reduce your market share?

Module 6 – Basic concept of Gender Mainstream

1. Definition: In our society, women are marginalized in most of the spheres.

Therefore they need to be given special attention. Gender mainstreaming is to bring

forth issues concerning the women. They need to be economically empowered, their

voice need to be heard in the decision making of the village bodies and at the same

time their well-being needs to be taken into account.

2. Components:

a. Sensitization

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(i). Domestic Violence:

SHGs needs to understand that violence is violence and therefore is a criminal

act.

It is not an internal matter of the family, but a social curse.

It incapacitates a woman; physically and mentally to be a productive member of

the society. SO, discuss the issues of domestic violence with the SHGs

members.

(ii). Laws pertaining to the rights of women

The SHGs has to educate itself and consequently educate its member on friendly

laws for the women. They need to network with the State Women’s’

Commission of their respective states as well as the National Women’s

Commission in Delhi. Contact the local lawyers women’s rights activist and

periodically call them to talk to the villagers.

(iii). Women’s participation & Decision-making

In every meeting at every level, SHG members has to see to it that women are

being vocal and that their voice is being heard.

Our Women are so forthcoming, that in spite of the hardships they do find it

important to attend the SHG meetings. But, most of the time they need to carry

their infants along.

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The SHG will have to think of an arrangement whereby the infants are well looked

after by one of the members, by turn, while the women participate actively and also

without any worries.

Girl child –Giving equal opportunities, equal nourishment and equal treatment to the

girl child should be an important part in educating the society by the SHG members.

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CHAPTER – 10

WHY SHGs should be Federated?

SHGs need to be FEDERATED at the cluster level based on the geographical

locations of 15 to 30 SHGs for stronger coalitions, linkages, collective ventures and

take up matters beyond individual units. The Federations have to be registered

under the State Society Registration Act thereby becoming legal entities.

SHG Federation will provide Credit requirement for the SHG to sustain long-

term interventions, especially in development activities.

The SHG Federation will provide the following services to the SHGs:

1. Micro Credit needs of the SHGs

2. Capacity Building (its own and that of the SHGs)

3. Enterprise development/Marketing (help build the network and information for

the group and individual women enterprises)

4. Health Care/ Women and Child welfare

5. Women Empowerment issues

6. Education

7. Gender Mainstreaming

8. Fund Management (its own and also train the SHGs on the same)

9. Monitoring and Evaluation of the activities of the SHGs

10.Organizational Management (its own and also help build the managerial skills of

the SHGs)

11.Formulation of Plan

12.Vision and Road Map charting

13.Coalition building with other Federations and Associations

Documents

CHAPTER – I Introduction Training Manual.pdf · CHAPTER – I Introduction ... through improved management of their resource base in a way that contributes to ... sense of stakeholder