Self Help Groups, Poverty Self Help Groups, Poverty Alleviation and Alleviation and Empowerment Empowerment   

Presented by Dr. K. LalitaPresented by Dr. K. LalitaYUGANTARYUGANTAR

At the Planning Commissions Civil Society Window on Self Help GroupsAt the Planning Commissions Civil Society Window on Self Help Groups77thth November 2006 New Delhi November 2006 New Delhi

yugantar@vsnl.net &yugantar@vsnl.net &lalitarajan@gmail.comlalitarajan@gmail.com

BackdropBackdrop

Environment for ensuring ‘spread effect of Environment for ensuring ‘spread effect of growth’ emphasized during 90s. growth’ emphasized during 90s. 

Concept of women’s groups (Sangams) existed Concept of women’s groups (Sangams) existed from 80s. NGOs drew on experience of Left from 80s. NGOs drew on experience of Left movements and Anti-arrack movement.movements and Anti-arrack movement.

Andhra Pradesh adopted DWCRA (development Andhra Pradesh adopted DWCRA (development of women and children in rural areas) model for of women and children in rural areas) model for APDPIP and APRPRPAPDPIP and APRPRP

Organising women around thrift and credit Organising women around thrift and credit services is a very effective method for alleviating services is a very effective method for alleviating poverty and empowering women poverty and empowering women

Delivery mechanismsDelivery mechanisms

Growth of Microfinance sector: Four models: Growth of Microfinance sector: Four models:

1.1. Community owned and managed (CDF, Sanghatita, ASP, Community owned and managed (CDF, Sanghatita, ASP, Roshan Vikas)Roshan Vikas)

2.2. Financial Intermediary Model ( an arm of retail banking Financial Intermediary Model ( an arm of retail banking and insurance sector) like BASIX, SKS, SPANDANA, and insurance sector) like BASIX, SKS, SPANDANA, SWAS, SHARESWAS, SHARE

3.3. Banks and Insurance directly dealing with SHGs.Banks and Insurance directly dealing with SHGs.

4.4. DWACRA + SAPAP [govt models]DWACRA + SAPAP [govt models]

NUANCES OF DIFFERENT NUANCES OF DIFFERENT STRUCTURESSTRUCTURES

1.Financial Intermediary Model1.Financial Intermediary Model

Not targeted at a particular segmentNot targeted at a particular segment

Any adult woman can become member of the Any adult woman can become member of the group. group.

Members save any amount from Rs 20 to Rs Members save any amount from Rs 20 to Rs 200 or more. 200 or more.

2% per month (24 % p.a.)interest is charged on 2% per month (24 % p.a.)interest is charged on loans. Funds borrowed from banks/FIs loans. Funds borrowed from banks/FIs

2. DWCRA Model (Government Model)2. DWCRA Model (Government Model)

SHGs of DWCRA are federated into MACs : Training in leadership, SHGs of DWCRA are federated into MACs : Training in leadership, attitudinal changes, skills for income generation. attitudinal changes, skills for income generation.

Lump sum grant of Rs. 25000: IRDP subsidy and bank loans can be Lump sum grant of Rs. 25000: IRDP subsidy and bank loans can be accessed. accessed.

Groups save, inter-lend to meet needs of members. Groups save, inter-lend to meet needs of members.

Program for services (health, education, child care, nutrition, water and Program for services (health, education, child care, nutrition, water and sanitation); other govt. rural development programmes.sanitation); other govt. rural development programmes.

Linkages with govt. line departments; financial institutions; corporates. Linkages with govt. line departments; financial institutions; corporates.

Economic and social empowerment is the bottom line. Economic and social empowerment is the bottom line.

Contd…

3. SAPAP 3. SAPAP modelmodel (International Model) (International Model)  

1995, SAPAP pilot in 20 poor mandals of AP. 1995, SAPAP pilot in 20 poor mandals of AP.

Social mobilization as mechanism to form SHGs. Social mobilization as mechanism to form SHGs.

SAPAP Empowerment model’s 3 components: SAPAP Empowerment model’s 3 components: social mobilization, capital formation, capacity social mobilization, capital formation, capacity building of the poor building of the poor

SAPAP implemented in collaboration with local SAPAP implemented in collaboration with local NGOs and state government.  NGOs and state government. 

This is also a micro finance plus model. This is also a micro finance plus model.

Contd…

TotalTotal APAP KarnatakaKarnataka OrissaOrissa RajasthanRajasthan

N SHGsN SHGsSingle casteSingle casteMixed casteMixed casteST/SC/ Minorities ST/SC/ Minorities BC/OCBC/OC

21421466%66%34%34%7%7%7%7%

606063%63%37%37%2%2%23%23%

515169%69%31%31% 4%4%

505074%74%26%26%6%6%

535360%60%40%40%15%15%4%4%

According to a recent sample study, 80% of SHGs are single caste. 20% of groups do cross caste hierarchies.

1. SHG and Caste

NGONGO GovtGovt BankBank

N SHGsN SHGsSingle casteSingle casteMixed casteMixed casteST/SC/ Minorities ST/SC/ Minorities BC/OCBC/OC

13713761%61%39%39%9%9%5%5%

494969%69%31%31%2%2%14%14%

282886%86%14%14%

7%7%

GROUND REALITIES: CERTAIN IMPORTANT FEATURES

TotalTotal APAP KarnatakaKarnataka OrissaOrissa RajasthanRajasthan

% of poor in SHGs% of poor in SHGsSCSCSTSTWomen headed HHsWomen headed HHs

51%51%30%30%25%25%11%11%

53%53%7%7%13%13%13%13%

61%61%45%45%10%10%16%16%

58%58%41%41%35%35%14%14%

34%34%27%27%41%41%3%3%

(Source: Self help groups in India: a study of the lights and shades, M Harper, 2006)

2. SHGs & Poor

Benefits of SHG modelsBenefits of SHG models  

SHG movement created an institutional framework.SHG movement created an institutional framework.

Participation of women in SHGs improved their Participation of women in SHGs improved their access to credit.access to credit.

Culture of thrift and disciplined loan repaymentCulture of thrift and disciplined loan repayment

Winning confidence of mainstream financial sector Winning confidence of mainstream financial sector as credit worthy institutions.as credit worthy institutions.

Interest rates in the informal credit sector decreased.Interest rates in the informal credit sector decreased.

Consumption needs and certain production needs Consumption needs and certain production needs met. met.

Problems Problems   

Low levels of credit absorption, low Low levels of credit absorption, low skill base and low asset base.skill base and low asset base.

Interior and tribal villages have not Interior and tribal villages have not benefited.benefited.

SCs and women headed SCs and women headed households have not benefited.households have not benefited.

Pressures by govt to push sterilization Pressures by govt to push sterilization and birth control methods. and birth control methods.

Emerging ChallengesEmerging Challenges  

Two major factors threatening sustainability:Two major factors threatening sustainability:

A) Damage to ‘credit discipline’ because of high interest rates and A) Damage to ‘credit discipline’ because of high interest rates and political reactions to incidents of coercionpolitical reactions to incidents of coercion

B) High handed recovery of loansB) High handed recovery of loans

C) Lack of skills/experience for advisory/technical support services to C) Lack of skills/experience for advisory/technical support services to promote livelihoods and build market interventionpromote livelihoods and build market intervention

Subvertion of P.R.I.s and bitter inter-department rivalrySubvertion of P.R.I.s and bitter inter-department rivalry

Politics of patronagePolitics of patronage

Internalised notions of vulnerability of women affecting their confidence Internalised notions of vulnerability of women affecting their confidence and performance. and performance.

Social norms inhibiting women from articulating personal needs. Social norms inhibiting women from articulating personal needs.

Women experience Invisible barriers to entry in economic & political Women experience Invisible barriers to entry in economic & political spheres.spheres.

Gender Perspective of EmpowermentGender Perspective of Empowerment  

No men in SHGs No men in SHGs

Resistance to women’s entry in local Resistance to women’s entry in local market and political structures market and political structures

Family resistance to changing power Family resistance to changing power relationsrelations

Continuing need for improving quality of Continuing need for improving quality of life: education, literacy, health, child care, life: education, literacy, health, child care, household chores household chores

Empowerment through livelihood Empowerment through livelihood development: Problemsdevelopment: Problems

Microfinance programmes assume men and Microfinance programmes assume men and women face same challenges.women face same challenges.

Management of household subsistence needsManagement of household subsistence needs

Adding to household income stream – (‘work Adding to household income stream – (‘work efficiency’; skills for home based activity etc,)efficiency’; skills for home based activity etc,)

Managing a small business Managing a small business

Scaling up the small business Scaling up the small business