CONCEPTS AND REVIEW OF LITERATURE

Transcription

1 CHAPTER - II CONCEPTS AND REVIEW OF LITERATURE.. Self-Help Groups play a pivotal role in reducing poverty levels, generating employment and empowering women. Various studies have proved that different models of credit linkage programmes are highly successful and the repayment rate is more than 95%.Micro financing or group lending is being looked upon as an instrument that can be considered as the golden stick for development and has become a ladder for uplifting the poor women socially, mentally and attitudinally. Some studies have highlighted the fact that the micro-enterprises of SHGs do not have market development strategies and they face a lot of difficulties in positioning their products in the market, relating to other competitors, products and markets. SHG members who generally lack high level of literacy, technical competence, market intelligence and entrepreneurial spirit face a lot of difficulties in carrying out their business activities. The study attempts to find out the extent of success of working of women self group members based on choice of business, marketing strategies followed, financial sustainability, and the organization of the SHGs are considered as important factors to determine the SHGs success in the long run. This chapter consists of two parts. The first section deals with concepts and definitions of terms which are much important for this study. The second section presents the review of literature. 15

2 2.1 CONCEPTS AND OPERATIONAL DEFINITIONS Some of the terms used frequently in this study are defined for the purpose of clarity Rural Women It refers to the women living in the rural areas of Tiruchirappalli District in particular Family A family is a social unit wherein blood related persons live together and take food from a common kitchen. For the present study a family within three members, is taken as micro-family; a family with 4 or 5 members is considered as a smallfamily; a family with 6 or 7 members is considered as a medium-family and a family with more than 8 members is considered as a large-family Self-Help Group (SHG) A Self-Help Group is a small homogeneous group of not less than twenty rural women living below poverty line (BPL) coming together to save small amounts of money regularly and to mutually contribute to a common fund SHG Member It denotes a woman member of the Self-Help Group in Tiruchirappalli District mostly drawn from the families below poverty line SHG Leader Each group selects a leader among them and she will hold office for a period of three years. This leader manages the group members. 16

3 2.1.6 Women Entrepreneur Women entrepreneur may be defined as Woman or group of women who initiate organize and run a business enterprise. Government of India defined the women entrepreneur as an enterprise owned and controlled by woman having minimum financial interest 51% of the capital and giving at least 51% of the employment generated in the enterprise to women Income Generating Activities Income generating activities are those initiatives that shape the economic aspects of people s lives through the use of economic tools such as credit Weaker Sections All those sections of the population, who are living below the poverty line and drawing an income of ` per annum in rural areas and ` per annum in semi-urban areas, are considered as weaker sections. Presently, the norms vary between ` to among different states Micro-finance Micro-finance is a financial service of providing small quantity of finance by the financial institutions to the poor. These financial services may include savings, credit, insurance, leasing, money transfer, equity transactions etc Micro-credit Micro-credit is defined as provision of thrift, credit and other financial services and products of small amounts to the poor in rural, semi-urban and urban areas for enabling them to raise their income levels and improve living standards. 17

4 Development of Women and Children in Rural Areas (DWCRA) Development of Women and Children in Rural Areas programme was launched in Its aim was to empower rural women living below the poverty line (BPL) by way of organizing them to create sustainable income generating activities through self-employment Swarnajayanthi Gram Swarozgar Yojana (SGSY) Swarnajayanthi Gram Swarozgar Yojana, a major anti-poverty programme is being implemented since 1999, with the prime objective of bringing the assisted poor families above the poverty line by ensuring reasonable and sustained level of income over a period of time. This scheme adopts SHG approach and aims to graduate them from micro-credit stage to micro-enterprises stage by providing skill development training, bank credit, infrastructure facilities and much needed marketing support to the products produced by them. Government of India and the State Government are sharing the costs in the ratio of 75: Revolving Fund (RF) Revolving Fund is a financial assistance provided to SHGs to augment their group corpus and create credit discipline by enhancing their financial management skills. Proper utilization of revolving fund will help in making SHGs creditworthy and access bank loans. This fund has been provided to those groups passed Grade-I Economic Assistance (EA) This type of financial assistance is given to those Self-Help Groups after a period of one year from the date of inception of the group which has passed Grade-II. This purpose of the economic assistance is to make them start an 18

5 economic activity. The total amount of loan that can be availed by each group is ` and the amount of subsidy on the loan is ` The Mahalir Thittam pays this amount of subsidy to the bank for the amount of loan advanced to the groups Savings For the present study it means the savings of SHG members in respective area. The savings per member is calculated by dividing total savings by the number of members. It refers to the respective area for the time specified Non-Governmental Organisations (NGOs) They are registered bodies that operate within Tiruchirappalli district which act as self-help promoting institutions and their role lies in SHG formation, monitoring and stabilization of rural women by providing financial linkage Facilitators The facilitators are those who propagate the message, motivate the rural women, organize SHGs, train them to thrift and credit management and nurture them over a period of six months. For the present study the facilitators include the project officers of the projects sponsored by the central and state governments, NGOs, formal financial agencies like Commercial Banks, Regional Rural banks and Cooperative banks in Tiruchirappalli district Mahalir Thittam Mahalir Thittam is a scheme launched by the Government of Tamil Nadu with its own fund to cover the entire State including Tiruchirappalli District in a phased manner. 19

6 Direct Tangible Results In the present study, they refer to the select assets acquired and revealed by the sample SHG members Indirect Tangible Results In the present study these are the resulted changes in income rate and changes in savings and expenditure as caused by the change in income Empowerment Empowerment is a process and is not something that can be given to women. The process of empowerment is both individual and collective. For the present study it refers to the upliftment of rural women as reflected and assessed in selected economic and social indicators Economic Empowerment Economic empowerment in the present study means only the upliftment or growth or development or advancement noticed among the SHG rural women in the select indicators - Direct Tangible Results and Indirect Tangible Results Social Empowerment It means only the awareness of members on additional knowledge or use of skill obtained through SHG membership in the select social aspects like sanitary, women welfare, decision-making and public interest. The awareness in each aspect is conditioned by and revealed through select parameters and these are termed as social indicators. 20

7 Social Parameters These are the parameters or elements appropriately selected by the respondents which influence them as revealed by them Traditional Types of Occupations These are occupations of the SHG members in the study area which are associated with the knowledge and skill already possessed by the members or members of the family before joining SHG Non-traditional Types of Occupations These are occupations which are is not at all associated with the earlier skill and knowledge already possessed by the SHG member or members of the family. They will be because of the training and the motivation given by the facilitators External Source of Support This is the support extended by external agencies like NGOs, governments and industrial development programmes towards upliftment of rural women Internal Source of Support This is the support extended by the friends and the family members who are closely related to the members Literates Those SHG members who had formal education at least at school level are called as literates. 21

8 2.2 REVIEW OF LITERATURE Lalitha Shivakumar (1995) pointed out that the small savings by rural women can generate the requisite resources which can wean the people away from the exploitation of moneylenders savings depend on habits and voluntary savings constitute the key for economic progress. It has also been proved that the poor people can save substantially through group efforts. Promotion of Self-Help Groups have the potential to bring women into the mainstream of economic development paving the way for sustainable development. 1 Karl (1995) studied the role of SHGs of women on decision-making and concluded empowerment as a multifaceted process, involving the pooling of resources to achieve collective strength and countervailing power and entailing and the improvement of manual and technical skills, administrative, managerial and planning capacities and analytical reflective abilities of local women. 2 Dodkey (1999) explaining that Self-Help Groups are now gaining acceptance, as an alternative system of credit delivery, for meeting the credit needs especially to the people who are the poorest of poor generally comprising small marginal farmers. Landless agricultural labourers, rural artisans, womenfolk and other micro-entrepreneurs. The SHGs are regarded as a support system to the exiting banking operations. The objectives of the SHG is to inculcate the habit of thrift, savings, banking culture, i.e., availing loan and repaying the same over a 1 2 N. Lalitha Shivakumar, Self-Help Groups, Social Welfare, July 1995, Vol. 42, No. 4, p. 9. Karl Marilee, Women and Empowerment Participation and Decision-making, Zed Books Ltd., London,

9 given economic prosperity through credit. The principles underlying the SHG model in India are almost identical to Bangladesh concept, i.e., financing the poorest of the poor, ensuring excellent recovery level and empowering women not just by meeting their needs for consumption and productive loans but also through more holistic educative programmes on issues such as sanitation, family planning and the evil effect of liquor consumption in the family. 3 Sivasubramanian (1999) in his study had stressed the elimination of poverty as one of the principle objectives of Indian development strategy. In 1993, the below poverty line was 36 per cent. The BPL data which worked out of 320 million people, 224 million live in rural areas. The incidence of poverty had declined from 54.9 per cent in to 36 per cent in The salient features of antipoverty programmes are framed under various schemes to bring growth. In 1999, the reformed scheme of Swarnajayanthi Gram Swarozgar Yojana (SGSY) would be centered on the concept of SHGs and cluster approach for reaching out the poor as an effective vehicle. Poverty can be attentively eradicated only when the poor start contributing to the growth process through a process of social mobilization, participatory approach and empowerment of the poor. 4 Rajeswari and Sumangala (1999) explored the problems and prospects in women entrepreneurship and stated that women entrepreneurship enables to pool 3 4 M. D. Dokey, Sustaining rural women, Social World, March 1999, Vol. 45, No. 12, p. 19. M. N. Sivasubramanian, Credit-based poverty alleviation programme innovative approach, Kurushetra, November 1999, Vol. 48, No. 2, p

10 the small capital resources and skills available with women. It paves the way for fuller utilization of capital and also mobilizes the female human potential. 5 Gurumoorthy (2000) pointed out that women s participation play a significant role in rural employment activities. The self-help would concentrate on all round development of the beneficiaries and their village as a whole. The groups would undertake the responsibility of delivering non-credit service such as literacy, health and environmental issues. The concept of Self-Help Group would mould women as responsible citizens of the country for achieving social and economic status. It has also proved that it would bring on the mindset of the conservative and tradition bound illiterate women in rural areas. 6 Kamath (2000) 7 observed that unemployment is a major malady faced by the rural youth in our country. To motivate and facilitate unemployed youth to take up self-employment, Bank has established nine self-employment training institutes in the southern state, under the aegis of its trust. These institutes have been established keeping in view the national priorities. The number of women who have been benefited from the bank s financial assistance so far is an impressive six lakh plus with an outstanding of ` 1216 crores. The bank totally assisted 6754 groups of M. Rajeswari and P. Sumangala, Women, Entrepreneurs - A Scan on their problems and Prospects in Women Entrepreneurship: Issues and Strategies, Kanishka Publishers, New Delhi, T. R. Gurumoorthy, Self-Help Groups Empower Rural Women, Kurukshetra, February 2000, Vol. 48, No. 5, p. 36. R. J. Kamath, Rural Development Activities, Southern Economist, November, 2000, Vol. 39, No. 14, p

11 which 5304 are women group. These women group are backing a silent revolution in the rural areas ushering in social and economic empowerment. Suman Krishnan Kant (2001) opined that the process of women s empowerment is multi-dimensional. It enables women to realize their full potential and empowers them in all spheres of life. In India, women form a significant part of the labour force. However, their contribution remains invisible and unrecognized. Women account for 90 per cent of labour force in the informal sector, which is neither captured in the country s population census nor accounted in the National Accounts. The productive capacities of women, who constitute almost half of the population, remain unaccounted, thus, reinforcing their subordinate roles. It is estimated that nearly 1300 million persons in the world are poor and nearly two per cent of them are women. Today as many as 30 to 35 per cent rural households are women headed and their low incomes make them vulnerable to the extremes of poverty and its consequences. 8 According to Veluraj (2001), the Nobel Scholar and Indian Economist Amartya Sen expressed in his words, Unless women are empowerment, issues like literacy, health and population explosion will remain unresolved problems of the developing countries. In India, the majority of the women still continue to perform their traditional roles in the household and in agriculture. The women are the wives of men - the present scenario forces them to depend on men. Representation of women has never gone beyond eight per cent in parliament, 10 per cent in the State 8 Sunman Krishna Kant, Women s Empowerment and Mutual Cooperation in the Family, Social Welfare, April 2001, Vol. 48, No. 12, p

12 Assemblies, 13 per cent in senior management and administrative posts of government and hence there is no equal opportunity. 9 Self-Help Groups are encouraged to come together as cooperative societies at the village and mandal level by federating them under the mutually aided Cooperative Society Act (1995). These societies will be accessing credit from financial institutions, donor agencies, District Rural Development Agency (DRDA) and voluntary organisations and help the women members of the Self-Help Groups in availing bigger loans for economic activities as well as help in collective bargaining in the marketing of products, purchasing of raw materials etc. Due to this massive self-help movement, there is a perceptible improvement in the socioeconomic status of the rural women (Snch Lata Tandom, 2001). 10 Patel (2001) welcomed that the announcement of National Agricultural Policy recently by the Government of India and signing the agreement on agriculture with the World Trade Organisation. He stressed that a focused attention needs to be given to restructure the rural credit system along with integrating agricultural research, extension and education system, building rural infrastructure and making government officials responsive to the emerging needs of farm sector development. It is against this background an attempt is made here to appreciate the present status of the rural credit structure in respect of credit disbursal, recovery 9 10 R. Veluraj, SHGs an alternative approach to empower rural women, Tamil Nadu Journal of Cooperation, June 2001, Vol. 1, No. 8, p. 18. Snch Lata Tandom, Self-Help New Mantra for Empowerment, Social World, October 2001, Vol. 48, No. 23, p

13 performance and building up on non-performing assets, declining trend in the flow of credit and other issues of serious concern. 11 Ghosh (2001) pointed out that combating poverty cannot be managed by the government alone. There are many areas where government needs collaboration and cooperation from NGOs particularly in creating opportunity facilitating empowerment and providing security to the poor. The pressure of the donor agencies on the recipient government to work through NGOs in development programme is also a dominant factor in increasing the role of NGOs to fight against poverty. 12 Bina Agarwal (2001) said that the secure and effective land rights are of critical importance for women s welfare and empowerment. But achieving this will need concerted efforts by gender-progressive NGOs, especially women s groups, as well as by those within the government who are concerned about women s empowerment, poverty and equitable development. 13 Subramanian (2001) pointed out that the NGOs are useful in organizing Self- Help Groups and in capacity building and in developing access to the institutions and resources of the State. However, officials were suspicious of the role of NGOs who were perceived as undermining their power. When NGOs were allowed to implement government projects there was too much bureaucratic meddling. The long list to do s and don ts of government procedure accord ill with NGO thinking A. R. Patel, Rural Credit System, Kurukshetra, January 2001, Vol. 49, No. 4, p. 17. D. K. Ghosh, NGO intervention in poverty alleviation, Kurukshetra, March 2001, Vol. 49, No. 6, p. 2. Bina Agarwal, Land Rights and Gender Equity, Yojana, August 2001, Vol. 45, p

14 and approach. In the recently restructured self-employment programme in the form of the Swarna Jayanthi Gram Swarojgar Yojana (SGSY), group schemes through the formation of SHGs have been overwhelmingly preferred. However, in none of the North Eastern States BPL lists are ready to organize households into SHGs to implement the programme. 14 According to Ojha (2001) Self-Help Group model of self-employment generation seems to be a workable model. However, there will be need for utmost care in promotion of Self-Help Groups. Self-help promotion consists of assisting individuals to join together and set-up an organisation promoting their individual and collective skills and opportunities to develop their own. Self-help promotion aims at generating self-sustainable growth processes within the course of which the target group makes its own decision. 15 Dipendrta Banarjee (2001) gives the most acceptable definition of microfinance. It is the provision of thrift credits, other financial services and products of very small amount to the poor in rural, semi-urban and urban areas to enable them to raise their income levels and improve the standard of living. The micro-finance service, unlike direct credit to weaker sections, and loan under SGSY banking institution have a discretion to determine the interest on micro-credit. The importance of micro-credit in financial markets is progressively gaining universal acceptance as an effective tool to eradicate poverty and unemployment prevailing in S. Subramanian, Rural Development and Tribal Aspirations in Tripura, Kurukshetra, January 2001, Vol. 49, No. 4, p. 22. R. K. Ojha, Self-Help Groups and Rural Employment, Yojana, May 2001, Vol. 45, p

15 developing countries. It helps to provide credit for dispossessed people to build business and empowerment occurs when these people witness effort and outcome. The Central Bank has left the application of interest rate to loan extended to microcredit organisation or by the micro-credit organisation to Self-Help Groups / member of beneficiaries to the discretion of the bank with only stipulation. 16 The Ministry of Human Resource Development (2001) pointed out that in order to enhance women s access to credit for consumption and production, the establishment of new, and strengthening of existing micro-credit mechanisms and micro-finance institution will be undertaken so that the outreach of credit is enhanced. Other supportive measures would be taken to ensure adequate flow of credit to financial institutions and banks, so that all women below poverty line have easy access to credit. 17 Vijay Kulkarni (2000) 18 has described in his article Empowerment of Women through Self-Help Groups the difference between women who have become part of SHGs and those who are not members of the SHGs from the same village. Empowerment has taken place across caste/class. It has also helped to some extent to go beyond caste politics and to bring them together as women Dipendra Banarjee, Micro-financing, Southern Economist, February 2001, Vol. 39, No. 20, p. 19. Report of Department of Women and Child Development, Ministry of Human Resource Development, Economic Empowerment of Women, Yojana, August 2001, Vol. 45, p. 69. Vijay D Kulkarni, Empowerment of Women through Self Help Groups, Ashwatha, Oct Jun 2001, Vol. 1, No. 4, pp

16 Barik and Vannan (2001) 19 in their work Promoting Self Help Groups as a Subsystem of Credit Cooperatives have stated that SHGs can be developed as a sub-system to primary agricultural co-operatives societies at village level. They have seen that by and large SHGs have been linked with commercial banks in the rural areas. However, the linkage with the co-operative credit system is proverbially poor. As such the need of the hour is to make an earnest effort to bring about effective linkage with the co-operatives. Ojha (2001) 20 in his article Self Help Groups and Rural Employment has expressed that the self help group model of self-employment generation seems to be a workable model. However, there will be need for utmost care in promotion of self help groups. He has also mentioned that there are number of possible routes to the promotion of self-employment and strengthening self-help groups is one of them. Mani Singh (2001) 21 has explained in his article Self-Help Groups: Some Organizational Aspects that the organizational functions are motivation, meeting, adoption of a fixed area of operation, monthly meeting, fixation and collection of monthly thrift, maintenance of books of accounts, formulation of rules and regulations, increase in membership and framing of policies/programmes follow co-operative norms. He has also revealed that the social functions are providing B. B. Barik and P. P. Vannan, Promoting Self Help Groups as Sub-System of Credit Co-operatives, The Cooperator, January 2001, Vol. 38, No.7. pp R. Ojha, Self Help Groups and Rural Employment, Yojana, May 2001, Vol. 45, pp C. H. Mani Singh, Self Help Groups Some Organizational Aspects, The Cooperator, May 2001, Vol. 38, No. 11, pp

17 education, knowledge and information, providing idea of consumer protection and environment protection, preventing harmful diseases, eradication of poverty, and linkage with other agencies for socially useful activities. Joshi (2002) observed that micro-credit programmer extends small loans to poor people for self-employment projects that generate income, allowing them to care for themselves and their families. In most cases, micro-credit programmer offers a combination of services and resources to their clients in addition to credit for self-employment. These often include savings, training networking and peer support. It is an irony that micro-enterprises and the contribution to the economy often remains unorganized. Poor women usually run their own individual economic activities very efficiently because of sheer survival pressure on them. But public support for the economy is usually absent so it is very difficult for poor women to improve their economic situation individually and alone. When interventions are made to strengthen women s economic activities, it is very important to credit the positive policy linkages for access to raw materials, markets, skills, space, credit, equipment etc. without this policy support, the most efficiently managed economic activities find it difficult to generate more income for poor women. 22 Archana Sinha (2002) 23 observes that the SHGs are informal groups where members come together toward collective action for a common cause. The common need here is meeting their emergent economic needs without being dependent on S. C. Joshi, Micro-credit not charity, Social Welfare, February 2002, Vol. 48, No. 32, p. 12. Archana Singh, Types of SHGs and their work, Social Welfare, February 2002, Vol. 48, No. 11, p

18 outside help. The main objectives of SHG is to inculcate the habit of thrift, savings, banking culture, that is, availing the loan and repaying the same over a given period of time and in the process, gain economic prosperity through credit. Hence, Self- Help Groups and micro-credit should be seen as one of the components of a solution to accelerate the socio-economic development particularly of the rural poor women in India. A judicious mix of micro-credit along with other activities with emphasis on development and empowerment strategies and processes would certainly make micro-credit an effective instrument of social and economic development particularly of the women in a holistic and integrated manner. According to Suguna (2002), the empowerment of women covers both an individual and collective transformation. It strengthens their innate ability through acquiring knowledge, power and experience. Organizing and strengthening of women s Self-Help Group: Institutional collective action - collective action of members, Ideology - Empowerment and Organisational structure - Project managing unit - Project implementation - NGOs-SHGs. This develops their ability to interact and communicate with each other. Thus bringing about integrated development of women. To conclude, it may be said that through this collective action with the ideology of empowerment, SHG are fast emerging as women movement throughout the nation especially in Andhra Pradesh where 50 per cent of such SHGs in the country are formed. 24 According to Alakananda Mookerjee (2002), the first step towards complete empowerment is the generation of a source of regular income and hence Self-Help 24 B. Suguna, Self-Help Groups, Vikasini, October 2002, Vol. 17, No. 4, p

19 Groups were created. In January 1999, two SHGs for women belonging to the general category namely Lakshmi Bachat Samuk and Ambika Bachat Samuh were setup. Inspired by their phenomenal success, the Scheduled Tribe women established one more SHG the following year Durga Bachat Samuh. Their combined membership now stands at 59. Initially each member was required to make a monthly savings of ` 100 and deposit it in a collective fund. Over the past three years, the SHGs have managed to save well over ` 2 lakh. They were keen to invest their savings in a profitable venture. The formation of SHG therefore, converted a traditionally gender neutral activity into a source of livelihood for village women. So, in the second step, attention was focused on building their capacity for loan repayment and enhancing their decision-making ability. 25 Rao (2002) pointed out that the genesis and development of SHGs in India reveals that the existing formal financial institutions have failed to provide finances to landless, marginalized and disadvantaged groups. The origin of SHGs could be traced to mutual aid in Indian village community. Cooperatives are formal bodies whereas SHGs are informal SHGs encourage savings and promote incomegenerating activities through small loans. The experiences available in the country and elsewhere suggest that SHGs are sustainable have reliability, stimulate savings and in the process help borrowers to come out of vicious circle of poverty Alakananda Mookerjee, Rural women draw Shakti from setting up dairy cooperatives, Vikasini, January 2002, Vol. 17, No. 1, p. 37. V. M. Rao, Women Self-Help Groups Profiles from Andhra Pradesh and Karnataka, Kurushetra, April 2002, Vol. 50, No. 6, p

20 Preethi Chandrasekar (2002) examined that the Self-Help Groups of rural women, promoted by the Mahalir Thittam are steadily reaping fruits of economic independence through their savings. The Karuppayurani branch of the Indian Bank was the latest to distribute household articles worth ` 5 lakh to 64 women under the Gramin Mahalir Sowbhagya Scheme. Mahalir Thittam aims to achieve four key aspects to empower rural women, especially those living below the poverty lineeconomic, social, educational and political of these economic empowerment was the crucial as it would bring about the other three aspects. The five-year entrepreneurship development programme trains SHGs to be self-sufficient and resourceful in running their business. 27 Lalitha (2002) examined that the Self-Help Groups and Bank linkage project being implemented under the guidance of NABARD which gives an institutional set up for micro-entrepreneurs. This linkage programme is a part of micro-finance operations emphasizing a savings based credit programme, flexibility in lending, operations, de-linking credit from the bondage of collateral requirements, group leading inter-group learning, group decision in fixing repayment schedule, skill development through training and promotion of backward and forward linkage facilities through NGOs. The net working among the banks, NGOs and women borrowers can open new vistas in building a new micro-credit structure lending to sustainable development. Women development cooperation and Government departments also engage the services of NGOs for mobilizing women under their schemes on the development of micro-enterprises. The effective partnership 27 Preethi Chandrasekar, Mahalir Thittam upgrades SHGs, Hindu Publication, November 18, 2002, p

21 between reputed NGOs and banks for promotion of Self-Help Groups will provide a strong institutional base for a credit-plus approach to micro-enterprises of women. 28 According to Lalitha and Nagarajan (2002) empowerment literally means becoming powerful. Empowerment of rural poor demands that members of village committees should have their own organisation, which will serve their own economic needs and interest exclusively. Moreover sufficient knowledge about the needs and problems of rural poor has not been supplied to the policy making agencies. If SHGs are promoted, the group members can articulate the problems in a better manner. 29 Bharat Dogra (2002) 30 has presented in his article Women Self Help Groups that almost all these women are from poor families, mostly from dalits and backward classes; while the increase in income is important, it is not the only aspect of these SHGs which is emphasized. Several existing problems of villages and ways of overcoming them are also discussed. It is important for the long-term success of Self Help Groups that loans should be returned promptly. Prem Singh Dahiya et al. (2002) 31 have described in their article Socioeconomic upliftment through Self Help Groups in Solan District of Himachal N. Lalitha Sivakumar, Self-Help Groups, Social Welfare, July 2002, Vol. 42, No. 4, p. 9. N. Lalitha and B. S. Nagarajan. Self-Help Group in Rural Development, XII Edition, Himalaya Publications, New Delhi, 2002, p.78. Bharat Dogra, Women Self Help Groups, Kurukshetra, March 2002, Vol. 50, No.5, pp Prem Singh Dahiya, N. K. Pandey and Anshuman Karol, Socio-Economic Upliftment through Self-Help Groups in Solan District of Himachal Pradesh, Journal of Agricultural Development and Policy, Jan-Jun 2002, Vol. 14, No. 1, pp

22 Pradesh that the success or the efficiency of micro finance interventions can be understood at three levels mainly (i) outreach and financial sustainability of the programme, (ii) income or poverty impact on the users, and (iii) development of financial market at the local level. The economic impact is measured in terms of increase in annual incremental income. All SHGs recorded increase in income, overall is 94.3%. They have also pointed out that various parameters are used to measure the maturity of the households. These are (i) homogeneity, (ii) feeling of relevance of group formation, (iii) awareness about objectives of groups, (iv) participation and frequency of meetings, (v) regularity of savings, (vi) repayment of loans and (vii) group participation in financial transactions. Jaswant Singh (2003) says that Self-Help Group and bank linkage programme being propagated by NABARD, for the last ten years has been recognized as the largest and fastest growing micro-finance programme in the world. Our expectations of providing bank credit to 1.25 lakh SHGs during the current year have been surpassed once again, and by January 2003, bank credit of ` 598 crore has already been provided to about 25 lakh poor families through 1.50 lakh new SHGs. The programme has also set in motion the process of women empowerment. However, the spread of the programme across the country has been uneven and has largely remained confined to a few States. He urges all states to vigorously join in their endeavour to make the SHG bank linkage programme a widespread success Jawant Singh, Budget Speech on Union Minister of Finance and Company Affairs, Southern Economist, March 2003, Vol. 41, No. 22, p

23 Rajamohan (2003) points out that the SHGs is a medium for the development of savings habit among the women fold. It mobilizes a large quantum of resources. It is a window for better technology and skill upgradation. It helps to increase an income of the family. In SHGs collective action and solitarity are important empowering mechanisms. 33 Rajeshwari (2003) explains that a bank branch finances directly to SHG by opening the loan accounts in the name of SHG. Bank loan is disbursed in the ratio of savings in the common fund of SHG. The maximum permissible ratio between savings in the common fund and bank loan is from 1.1 to 1.4. The bank branch finances SHG, which is formed at the instance of an NGO, but the responsibility of repayment solely lies with SHG. The bank achieves better and wider coverage of weaker sections in rural areas in a cost effective manner by mobilizing deposits from the savings of SHG members. 34 Sivaramakrishnan (2003) explains that the Swarajayanti Gram Swarozgar Yojana aims at establishing a large number of micro-entreprises in the rural areas, building upon the potential of the rural poor. The objective under SUSY is to bring every assisted family above the poverty line in three years. Towards this end SUSY is conceived as a holistic programme of micro-enterprises covering all aspects of self-employment, viz. organisation of the rural poor into Self-Help Groups and their S. Rajamohan, Activities of Self-Help Groups in Virudhunagar District: A study, Tamil Nadu Journal of Cooperation, April 2003, Vol. 3, No. 6, p. 15. V. Rajeshwari, New Generation Cooperatives through Self-Help Groups, Tamil Nadu Journal of Corporation (TNJC), August, 2003, Vol. 10, No. 10, p

24 capacity building, planning of activity clusters, infrastructure build up, technology, credit and marketing. 35 Om Raj Singh (2003) has indicated in his article Role of NGOs in fostering Self Help Groups that most of the SHGs have come up due to the dynamic leadership of certain individuals within a group or through the catalytic role played by the NGOs in developing such groups. One such NGO is the MYREDA (Mysore Resettlement and Development Agency) whose mission is building of people s institutions. The building of appropriate people s institutions to manage and control resources is an essential component for sustainability and for the confidence and self-reliance which is necessary to cope with external threats. He has also pointed out that the focus on institution building goes against the prevalent culture of patronage where benefits flow to individuals with the right contracts. MYRADA has over 1006 groups of women with the focus on women s rights and access to and control of resources which they require to ensure a sustainable livelihood. 36 Prasant Sarangi (2003) 37 has mentioned in his article Self Help Groups that the SHGs in our country have become a source of inspiration for women welfare. He has also highlighted that nowadays, formation of SHG is a viable alternative to achieve the objectives of rural development and to get community participation in all rural development programmes. SHG is also a viable organized set up to 35 K. Sivaramakrishnan, Poverty All Eviction through Self-Help Groups, TNJC, March 2003, Vol. 3, No. 5, p Om Raj Singh, Role of NGOs in fostering Self-Help Groups, Kurukshetra, Feb 2003, 37 Vol. 51. No.4, pp Prasant Srangi, Self Help Groups, Kurukshetra, Feb 2003, Vol. 51, No.4, pp

25 disburse micro credit to the rural women and to encourage them to enter into entrepreneurial activities. Jerinabi (2003) 38 in her work A study on micro credit management by women s self help group has analyzed the impact of micro credit on SHG members in improving their economic status in Coimbatore district of Tamil Nadu. Chiranjeevulu (2003) 39 in his article Empowerment of Women Through Self Help Groups has revealed that the multi-pronged strategy including local marketing to export has been contemplated. The product will be thoroughly popularized among all the SHGs in the district and channels for distribution of product to all the strategic marketing locations will be developed. He has also highlighted that network with other marketing enterprises of SHG women in neighboring districts will be established. Consumption points under the control of government like hostels and devasthanams would be approached for bulk orders. Product will also be marketed through PDS and Gruhamithra supply channels. Sivaramakrishnan (2003) 40 has disclosed in his article Poverty Alleviation Through Self Help Groups that the poverty levels have reduced from 56.44% of India s population in to 37.27% in The IX Five Year Plan document envisages reducing rural poverty in the country from a level of 30.55% (208 million) during 1996 to 9.64% (73 million) by 2006 and further to 4.31% V. Jerinabi, A Study on Micro Credit Management by Women Self Help Groups, Ph. D. Thesis, Bharathiar University, Coimbatore, T. Chiranjeevulu, Empowering Women through Self Help Groups, Kurukshetra, Mar 2003, Vol. 51, No. 5, pp K. Sivaramakrishnan, Poverty Alleviation Through Self Help Groups, Cooperation, March 2003, Vol. 3, No. 5, pp

26 (35 million) by He has also mentioned that organization of the rural poor into Self Help Groups is one of the ways to reduce the poverty. Raghavendra (2003) 41 in his article Self Help Groups Linkage Banking Challenges of Training Role played by National Centre says that the training has a vital role to play in the scaling up of the linkage programme. A major challenge faced by NABARD,SIDBI and banks is meeting the training needs of various players in the programme such as SHG members, functionaries of NGO, government and banks who should be exposed to different types and levels of training and awareness programmes. Rajamohan (2003) 42 in his article Activities of Self Help Groups in Virudhunagar District A Study has specified that according to a recent survey, 18 lakhs families out of 41 lakhs families are below the poverty line in the State of Tamilnadu, and they have been covered by the SHGs. He has also indicated that the programme was launched in 1998 and the total savings with 1.06 lakhs SHGs were ` 150 crore. Villi (2003) 43 has highlighted in his article Self Help Groups Micro Enterprises (Some Issues, Challenges, Alternatives) That rural micro enterprises play a vital role in areas like promoting and generating avenues for rural employment, utilization of local rural resources, skills development, promotion of K. Raghavendra, Self-Help Group Linkage Banking: Challenges of Training - Role played by National Centre, Land Bank Journal, March 2003, Vol. 41, No. 4, pp S. Raja Mohan, Activities of Self-Help Groups in Virudhunagar District: A Study, Cooperation, April 2003, Vol. 3, No. 6, pp C. Villi, Self Help Groups: Micro Enterprises (Some Issues, Challenges, Alternatives), Cooperation, July 2003, Vol. 3, No. 9, pp

27 rural entrepreneurship, mitigating regional imbalance, reducing rural urban disparity, arresting migration of rural labour to urban centres and creating capital assets in the rural areas itself. Rajeshwari (2003) 44 in her article New Generation Co-operatives through SHGs has described the models of financing SHG. In model I, the bank branch finances directly the SHG by opening the loan account in the name of SHG. In model II the bank branch finances SHG which is formed at the instance of NGO. The maximum permissible ratio between savings in the common fund and bank credit is 1:4 for concerned NGO which acts as facilitator, but the responsibility of repayment solely lies with SHG. In model III the local bank branch does not have adequate confidence in lending to SHG promoted by NGO or in SHG itself for various reasons and is not willing to be linked directly with the SHG; the bank finances such SHG through the agency that promotes the group. The NGO may act as a financial intermediary and is responsible for loan repayment. Sabyasachi Das (2003) 45 has explained in his article Self Help Groups and Micro Credit Synergic Integration that the inability of the credit institutions to deal with the credit requirements of the poor effectively has led to the emergence of micro-finance or micro-credit system as an alternative credit system for the poor. He has also mentioned that in rural India, it can be seen that the poorer sections of the society and destitute cannot avail the credit from banks and other formal V. Rajeshwari, New Generation Co-operatives through Self Help Groups, Cooperation, August 2003, Vol. 3, No. 10, pp Sabyasachi Das, Self Help Groups and Micro Credit-Synergic Integration, Kurukshetra, August 2003, Vol. 51, No. 10, pp

28 institutions due to their inability to deposit collateral security and mortgage property. At this point of view, micro-financing or group lending is being looked upon as the instrument that can be considered as the golden stick for poverty alleviation vis-a-vis rural development. Bhagyalakshmi (2004) in her study stresses the need for sharpening women s empowering strategies to make them effective and results oriented. She pointed out that money earned by poor women is more likely to be spent on the basic needs of life than that by men and that this realization would bring women as the focus of development efforts. She also examines the advantages of organizing women groups thereby creating a new sense of dignity and confidence to tackle their problems with a sense of solidarity and to work together for the cause of economic independence. 46 Loganathan (2004) 47 has disclosed in his article SHGs and Bank Linkages the three basic groups of banks which are involved in SHGs linkage with banks. They are the commercial banks, the regional rural banks and the co-operative banks. 48 commercial banks, 192 regional rural banks and 264 co-operative banks are associated with SHG and Bank Linkage Programme. This programme is in operation over 523 districts across the nation. Average loan disbursement per SHG as micro finance by commercial banks was Rs. 31,836 and the same by RRBs was Rs 26,220 and by cooperative banks was ` 21, S. Bhagyalakshmi, Women s Empowerment: Miles to Go, Yojana, August 2004, Vol. 48, pp P. Loganathan, SHGs and Bank Linkages, Kisan World, April 2004, Vol. 31, No. 4, pp

29 Sundar and Asokan (2004) 48 have expressed in their article Performance of Co-operative Banks in Financing Women Self Help Groups that cooperative banks are financing Women Development Programmes in terms of self-help groups. Cooperative banks in Karnataka State occupy the first position with respect to coverage of more number of women SHGs in their credit plan, followed by Tamil Nadu, Andhra and Kerala. Rimjhim Mousumi Das (2004) 49 in his article Micro finance through SHGs has explained that microfinance through SHGs has become a ladder for the poor to bring them up not only economically but also socially, mentally and attitudinally. He has also revealed that micro finance not only deals with the credit part but also deals with savings and insurance part. The most successful region for micro finance is the southern part of India. Nirmala et al. (2004) 50 in their study SHGs for poverty alleviation in Pondicherry have discussed the performance and impact of SHGs on the empowerment of rural poor women in Pondicherry region. The following are the objectives examined by the study: (i) to observe the socioeconomic background of the sample respondents during the survey; (ii) to identify the main determinants of monthly income of the respondents; and (iii) to examine the benefits and problems I. Sundar and R. Asokan, Performance of Co-operative Banks in Financing Women Self Help Groups, Cooperative Perspective, January 2004, Vol. 38, No. 4, pp Rinjhim Mousuni Das, Micro Finance through SHGs, Kurukshetra, February 2004, Vol. 52, No. 4, pp V. Nirmala, K. Sham Bhat, and P. Bhuvaneshwari, SHGs for Poverty Alleviation in Pondicherry, Journal of Rural Development, June 2004, Vol. 23, No. 2, pp

30 experienced by the SHG sample respondents. Such a study has contributed to an understanding of the functioning of SHGs in the rural Pondicherry. Tripatty (2004) 51 has presented in his article Self Help Groups that necessary training could be provided to the SHG members to create awareness on community health, traditional and modern agriculture practices, micro-credit, veterinary practices and water resource management, Panchayat Raj and other relevant issues applicable to the areas concerned. He has also provided that with appropriate mechanisms, various Ministries/Departments/Organizations can look towards the SHGs for targeting their programmes, which ultimately would help in improving the quality of life in rural areas. Rasheeda Bhagat (2004) 52 in her work, India Interior has expressed that there has been a sea change in the attitude of men towards women s groups and micro finance. She also stated that in the last 10 years, the banker s attitude has changed substantially and there is a remarkable difference in the way they look at these women s groups. That is a major success of this programme. Shanthi and Dhanalakshmi (2004) 53 in their article, Case Study of Women s Empowerment through SHGs in Gobichettipalayam Block, Erode District state that empowerment is an active, multi-dimensional process which enables women to realize their full potential and powers in all spheres of life. Women s empowerment K. K. Tripathy, Self Help Groups, Kurukshetra, June 2004, Vol. 52, No. 8, pp Rasheeda Bhagat, India Interior, The Hindu, July 16, 2004, p. 4. G. Shanthi and C. Dhanalakshmi, Case Study of Women Empowerment through Self Help Groups in Gobichettipalayam Block, Erode District, Cooperation, August 2004, Vol. 4, No. 10, pp

31 process starts with economic empowerment.they have also disclosed that leadership qualities and active participation in group culture lead to improvement in political acumen which would in turn strengthen and sustain the overall process of empowerment. Sanjoy Ray (2004) has mentioned in his article Linking Self Help groups under SGSY scheme with Co-operatives Prospects and Concerns that the distinguishing feature between SHGs and Co-operatives is that the latter often tend to be large sometimes heterogeneous and formal and sometimes lose cohesiveness and proximity with members in the process of their operations while the former is informal based on interpersonal relations where decision making, implementation and follow up become comparatively easy. He has also pointed that the Central Government and State Government fund the SGSY in the ratio of 3:1. 54 Kala (2004) 55 has mentioned in her article Economic Empowerment of Women through SHGs that amongst all the states, Tamil Nadu has the fourth highest percentage of female - headed households in the country. The Tamil Nadu Women Development Project (TNWDP) taken up for implementation under the name of Mahalir Thittam covered about 10 lakhs poor women of the State in the year Women SHGs share was 78% in March She has also stated that men SHGs accounted for 40% or more in only six States, viz. Karnataka, Gujarat, Rajasthan, Haryana, Madhya Pradesh and Meghalaya Sanjoy Ray, Linking Self Help Groups under SGSY Scheme with Cooperatives Prospects and Concerns, The Cooperator, October 2004, Vol. 42, No. 4, pp G. S. Kala, Economic Empowerment of Women through Self Help Groups, Kisan World, November 2004, pp