CHAPTER - II URBAN POVERTY AND WOMEN SELF-HELP GROUPS

CHAPTER - II URBAN POVERTY AND WOMEN SELF-HELP GROUPS Chapter - II provides the background of the research study, context of the study, problem and scenario of slums in Hyderabad city, Andhra Pradesh (India). In addition, the chapter discusses the demographic details, concepts and definition of Self-Help Groups (SHG), urbanization, migration, slum, unorganized sector and microfinance; urban poverty reduction programmes like Swarna Jayanti Gram Swarojgar Yojana (SGSY) and Swarna Jayanti Shahari Rojgar Yojana (SJSRY) and urban community development by the government and social work practice. The population in urban areas is increasing day-by-day. Due to limited opportunities in rural areas, rural people are migrating to the urban areas. As a result, slums are increasing in urban areas and people living in these areas are unable to access even the minimum necessary needs like healthy living environment, adequate food, clean drinking water and proper accommodation. This chapter will cover the problem and purpose of the study and the significance of the research for social work. Urban Slums in India India has shared the growth pattern with some of the fastest growing regions in Asia. The country has witnessed around 6.5 percent growth in Gross Domestic Product (GDP) in 2011 2012 fiscal year. India s urban population is increasing at a faster rate than its total population. Urbanization has been recognized as an important component of economic 25

growth. At 31 percent, the speed of urbanization, however, has been slow and lower than the average for Asia. The absolute number of people in urban cities and towns, however, has gone up substantially. The researchers expect the rate of urbanization to increase in the coming years. With over 575 million people, India will have 41 percent of its population living in cities and towns by 2030, from the present level of 377 million. Urban poverty in India remains high, at over 25 percent. Over 80 million poor people live in the cities and towns of India (Ministry of Housing Urban Poverty & UNDP, 2009). A large number of states report poverty figures in urban areas to be comparatively higher than that in rural areas. At the national level, rural poverty is higher than the poverty in urban areas, but the gap between the two has significantly decreased over the last couple of decades. The incidence of decline of urban poverty has not accelerated with the GDP growth. Urban poverty poses the problems of housing and shelter, water, sanitation, health, education, social security and livelihoods, along with the special needs of vulnerable groups like women, children and aged people. Urbanization will spread out across India affecting almost every state. For the first time in Indian history, the nation will have five large states Tamil Nadu, Gujarat, Maharashtra, Karnataka and Punjab that will have more of their population living in cities than in villages. Figure 1 shows the increase in urbanization in India between 2008 and 2030. By 2030, the India urban areas will be crowded with people who have migrated from rural areas for employment (McKinsey Global Institute, 2010). 26

Figure - 1 Rate of Urbanization in Indian States, 2008 Source: McKinsey Global Institute (2010). India is Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth. Mumbai McKinsey Publication Poor people live in slums, which are overcrowded, often polluted and lack even the basic civic amenities like clean drinking water, sanitation and health facilities. Most of them are involved in informal sector activities where there is constant threat of eviction, removal, confiscation of goods and almost non-existent social security cover. Middleand low-income households are unable to access benefits provided by public agencies. Almost 54.71 percent of urban slums have no toilet facility. Most free community toilets built by state government or local bodies are rendered unusable because of the lack of maintenance (Ministry of Housing Urban Poverty & UNDP, 2009). 27

The incidence of migration in India has shown an increase in 2011 as compared to the consistent decline during 1961 to 2001. The economic motive remains the main reason for migration among male interstate migrants. Economically backward states keep losing people to developed states. Poverty was found to be less among migrants as compared to non-migrants, but it was higher among rural migrants to urban migrants. Middle and higher income groups show a higher propensity to move. The most successful group of migrants belong to the urban cities in terms of the type of occupation they have and the income levels they have due to better education, employment and skills they possess. Influx of migration towards metropolitan cities indicates that the economic reforms have not been able to create many employment opportunities in small and medium towns and in rural areas. Women in Slums One in three people in cities, in the developing world, live in slums. Although conditions vary, research shows that women and girls often suffer the worst effects of slum life, such as poor access to clean drinking water, inadequate sanitation, unemployment, insecurity of tenure and gender-based violence. Their problems are not only exacerbated at home by stressful and over-crowded living conditions, but they are also insecure when in public areas due to poor security and eviction threats (UN-HABITAT, 2010). Background of SHG Concept in India To eradicate poverty and empower women, the government and NGOs are adopting and promoting the concept of self-help group (SHG) in rural, tribal and slum areas since 28

1990, based on Bangladesh microfinance experiences and India s MYRADA experiences. The Government of India introduced two major flagship programmes, the first one is SJSRY for urban areas and the second one is SJGSY for rural and tribal areas. Under SJGSY, the government promoted Development of Women and Children in Rural Areas (DWCRA) groups and the Development of Women and Children in the Urban Areas (DWCUA) groups under SJSRY. After few years, the government changed the name DWCRA and DWCUA groups as Self-Help Groups. Before 1990s, the poor and marginalized families were unable to access financial resources from banks for their income generative activities. Similarly, women were engaged with household works and livelihood activities. They do notdid not have much role to play in social, economic and political activities. They do notdid not have decisionmaking power at home and at social level. The SHG concept is successful in that now poor women can access loans and repay them without collateral security; they can use the loans for improvement of their livelihood activities and can take decisions and participate in social, economic and political activities. Based on the success of SHGs, many Self-Help Promoting Agencies (SHPIs) developed adoptable process to promote the SHGs in rural, tribal and slum areas. The formation of SHG process is that 20 women with homogeneous background may come together, form a SHG and elect 2 members as president and secretary. The president and secretary have a joint saving bank account in the nearest bank. Then the group members meet the local government officials and register their SHG at government office to get government 29

benefits. After joining a SHG, the members should have monthly meeting, during the meeting each member should pay monthly saving amount. After a few months, the SHG will provide internal lending to its members based on need analysis with low interest rates. Then the borrower should repay the loan in every month during SHG meeting. After some months, the local bank will start providing external loans to the members through the SHGs. Simultaneously, the government and NGOs would be providing capacity building to the SHG members on various aspects like what is SHG, why SHG, how it will be functioning, systems and procedures, etc. The SHG concept is very good, but a high percentage of SHGs is not functioning well due to various reasons like some SHGs do not have regular savings, members are not attending meeting, some are not repaying loans and some SHGs do not keep proper books of accounts. This study will also focus on how the SHGs are functioning. There are many studies conducted by researchers to know the impact of SHGs in rural areas, but there is no single study on SHGs in urban slums. Due to this reason, the researcher has chosen this research area. Concepts and Definitions of Urbanization, Slums, Microfinance and SHGs The study on impact of women SHGs on urban poor families is included with may concepts like urbanization, migration, and migrated people at slum areas, slum, unorganized sector, microfinance and self-help group (SHG). Urbanization Urbanization or urban drift is the physical growth of urban areas because of global change. The United Nations defined urbanization as the movement of people from rural 30

to urban areas, with population growth equating to urban migration. The United Nations has projected that half of the world's population would live in urban areas at the end of 2008 (Wikipedia, 2012). Migration Migration (human) is the movement of people from one place in the world to another for taking up permanent or semi-permanent residence, usually across a political boundary. One of the most significant migration patterns has been rural to urban migration, the movement of people from the countryside to cities in search of opportunities (National Geographic, 2005). Rural Migrated People at Urban Slums The national sample survey office in its 64th round survey, carried out during July 2007 to June 2008, covered a random sample of 5,72,254 people, covering 79,091 rural and 46,489 urban households spread over 7,921 villages and 4,688 urban blocks of the country, and explored some significant trends of rural migration in India (Anupam, 2012). Among the migrants in the rural areas, nearly 91 percent have migrated from the rural areas and 8 percent have migrated from the urban areas, whereas among the migrants in the urban areas, nearly 59 percent are from the rural areas and 40 percent from the urban areas. The reason for the migration for male migrant was dominated by employment-related reasons in both rural and urban areas. Nearly 29 percent rural migrants and 56 percent of urban male migrants have migrated due to employmentrelated reasons. 31

Slum The United Nations agency UN-HABITAT defines a slum as a run-down area of a city characterized by substandard housing and squalor and lacking in tenure security. (Wikipedia, 2012) Unorganized Sector Unorganized sector means an enterprise owned by individuals or self-employed workers and engaged in the production or sale of goods or in providing services of any kind whatsoever, and where the enterprise employs less than 10 workers (Ministry of Law and Justice, 2012). Microfinance The origin of microfinance is the brainchild of Grameen Bank of Bangladesh, which was founded by Muhammad Yunus. Microfinance started and formed in 1975 (Chaudhary, 2008). Microfinance is often defined as the financial services for poor and low-income clients, offered by different types of service providers. In practice, the term is often used more narrowly to refer to loans and other services from providers that identify themselves as microfinance institutions (MFIs). These institutions commonly tend to use new methods developed over the last 30 years to deliver very small loans to unsalaried borrowers, taking little or no collateral. These methods include group lending and liability, pre-loan saving requirements, gradually increasing loan sizes, and an implicit guarantee of ready access to future loans if present loans are repaid fully and promptly 32

(Consultative Group to Assist the Poor, 2012). The development professionals are considering the SHGs as part of microfinace sector. Self-Help Group (SHG) In India, NABARD initiated the self-help group concept in 1986 1987. After 1991, commercial banks concentrated more on SHGs under bank linkage. A SHG is a small, economically homogeneous affinity group of rural/urban/tribal poor voluntarily coming together to save small amounts regularly, which are deposited in a common fund to meet members' emergency needs and to provide collateral free loans decided by the group (Chaudhary, 2008). An SHG is a group of about 20 people from a homogeneous class, who come together for addressing their common problems. They are encouraged to make voluntary thrift on a regular basis. They use the pooled-in resources to make small interest-bearing loans to their members. The process helps them imbibe the essentials of financial intermediation, including prioritization of needs, setting terms and conditions, and accounts keeping. This gradually builds financial discipline and credit history for themselves as the money involved in the lending operations is their own hard-earned money, saved over time with great difficulty. This is warm money. They also learn to handle resources of a size that is much beyond their individual capacities. The SHG members begin to appreciate that resources are limited and have a cost. Once the groups show this mature financial behaviour, banks are encouraged to advance loans to SHGs in certain multiples of the accumulated savings of the SHG. The banks now give loans without any collateral and at market interest rates. Banks find it easier to lend 33

money to the groups as the members have developed a credit history. Cold (outside) money is added to the own warm money in the hands of the groups, which have become structured and are able to enforce credit discipline among the members. The members have experienced the benefits of credit discipline by being able to save and borrow regularly without many hassles. The groups continue to decide the terms of loans to their own members. The peer pressure ensures timely repayments and replaces the collateral for the bank loans (Harper M., 2002). A Demographic Profile (Urban and Slum Population) Table - 1 shows that the urban population in India (as per Census 2011) is approximately 37 crore, which means 31 percent of the population is living in urban areas. In 2001, the urban population in the country was 28 percent (28 crore), which means the urban population increased because of migration as well as because of the natural phenomenon. The urban population of Andhra Pradesh was 2.8 crore, which means 7.5 percent of the urban population was living in Andhra Pradesh. Table - 1 Urban and Rural Population in India India Population Persons Males Females Total population Total 1,210,193,422 623,724,248 586,469,174 Total rural population Rural 833,087,662 427,917,052 405,170,610 Total urban population Urban 377,105,760 195,807,196 181,298,564 Source: Census India 2011, retrieved from www.censusindia.gov.in in 2012 34

Table - 2 State-wise Urban Population in India S. No. Name of the State Persons Males Females 1 Jammu & Kashmir 3,414,106 1,855,942 1,558,164 2 Himachal Pradesh 688,704 371,630 317,074 3 Punjab 10,387,436 5,548,353 4,839,083 4 Chandigarh 1,025,682 563,127 462,555 5 Uttarakhand 3,091,169 1,641,722 1,449,447 6 Haryana 8,821,588 4,714,094 4,107,494 7 NCT of Delhi 16,333,916 8,749,410 7,584,506 8 Rajasthan 17,080,776 8,939,204 8,141,572 9 Uttar Pradesh (2) 44,470,455 23,551,760 20,918,695 10 Bihar 11,729,609 6,201,496 5,528,113 11 Sikkim 151,726 79,539 72,187 12 Arunachal Pradesh 313,446 165,928 147,518 13 Nagaland 573,741 301,112 272,629 14 Manipur 822,132 403,500 418,632 15 Mizoram 561,977 281,020 280,957 16 Tripura 960,981 486,362 474,619 17 Meghalaya 595,036 297,911 297,125 18 Assam 4,388,756 2,265,188 2,123,568 19 West Bengal (4) 29,134,060 15,023,245 14,110,815 20 Jharkhand 7,929,292 4,156,220 3,773,072 21 Odisha 6,996,124 3,616,819 3,379,305 22 Chhattisgarh 5,936,538 3,035,401 2,901,137 23 Madhya Pradesh 20,059,666 10,470,511 9,589,155 24 Gujarat 25,712,811 13,679,307 12,033,504 25 Daman & Diu 182,580 117,783 64,797 26 Dadra & Nagar Haveli 159,829 94,928 64,901 27 Maharashtra (1) 50,827,531 26,767,817 24,059,714 35

28 Andhra Pradesh (5) 28,353,745 14,290,121 14,063,624 29 Karnataka 23,578,175 12,046,744 11,531,431 30 Goa 906,309 464,590 441,719 31 Lakshadweep 50,308 25,878 24,430 32 Kerala 15,932,171 7,617,584 8,314,587 33 Tamil Nadu (3) 34,949,729 17,495,170 17,454,559 34 Puducherry 850,123 416,097 434,026 35 Andaman and Nicobar Islands 135,533 71,683 63,850 Source: Census India 2011, retrieved from www.censusindia.gov.in in 2012 Table - 2 indicates that Maharashtra state has the highest urban population, followed by Uttar Pradesh, Tamil Nadu, West Bengal and Andhra Pradesh. The Urban Population in Andhra Pradesh: A Demographic Profile The Census 2011 data shows that the highest urban population is in Hyderabad, Ranga Reddy and Visakhapatnam districts. It means that the Greater Hyderabad Municipal Corporation (GHMC) is crowded with migrated population and is expanding to Hyderabad and Ranga Reddy districts and other nearby districts. It also indicates that the rural people from Andhra Pradesh and neighbouring states are migrating to Hyderabad. Table - 3 data clarifies that the Hyderabad district has the highest urban population in Andhra Pradesh. The Ranga Reddy, Visakhapatnam, Krishna and Guntur districts occupy the next places. 36

Table - 3 District-wise Total Urban Population in Andhra Pradesh S. No. Districts Persons Males Females 1 Adilabad 757,826 383,311 374,515 2 Nizamabad 587,800 292,390 295,410 3 Karimnagar 994,231 500,473 1,150,280 4 Medak 728,121 370,711 357,410 5 Hyderabad (1) 4,010,238 2,064,359 1,945,879 6 Ranga Reddy (2) 3,724,364 1,910,071 1,814,293 7 Mahbubnagar 606,423 307,346 299,077 8 Nalgonda 661,743 331,806 329,937 9 Warangal 998,146 501,454 496,692 10 Khammam 655,674 324,370 331,304 11 Srikakulam 436,347 214,692 221,655 12 Vizianagaram 490,422 240,758 249,664 13 Visakhapatnam (3) 2,037,458 1,027,235 1,010,223 14 East Godavari 1,314,597 648,547 666,050 15 West Godavari 808,591 397,738 410,853 16 Krishna (4) 1,857,291 930,898 926,393 17 Guntur (5) 1,656,745 821,008 835,737 18 Prakasam 662,116 330,963 331,153 19 Sri P Sriramulu Nellore 862,309 433,924 428,385 20 YSR Kadapa 983,736 494,439 489,297 21 Kurnool 1,143,724 573,479 570,245 22 Anantapur 1,146,956 575,907 571,049 23 Chittoor 1,228,887 614,242 614,645 Source: Census India 2011, retrieved from www.censusindia.gov.in in 2012 The 2011 census (Table - 4), especially, focuses on Urban Agglomeration (UA) and on those cities which has a population of more than one lakh. UA refers to the continuous urban spread constituting a town and its adjoining outgrowths (OGs) or two or more physical contiguous towns together with or without outgrowths of such towns. As per the latest census, there are 46 cities/ua with a population of more than one lakh in Andhra Pradesh. 37

Table - 4 Cities/Urban Agglomeration in Andhra Pradesh (above one lakh population) S. No. Name of Urban Agglomeration/City Level Population Persons Males Females 1 Hyderabad UA 7,749,334 3,985,240 3,764,094 2 GVMC City 1,730,320 875,199 855,121 3 Vijayawada UA 1,491,202 750,770 740,432 4 Warangal UA UA 759,594 380,833 378,761 5 Guntur UA 673,952 333,894 340,058 6 Nellore UA UA 564,148 286,070 278,078 7 Rajahmundry UA 478,199 236,489 241,710 8 Kurnool UA UA 478,124 239,401 238,723 9 Tirupati UA 459,985 231,456 228,529 10 Kakinada UA UA 442,936 217,573 225,363 11 Kadapa UA 344,078 172,969 171,109 12 Anantapur UA UA 341,895 172,414 169,481 13 Nizamabad City 310,467 155,163 155,304 14 Karimnagar UA UA 299,660 151,306 148,354 15 Khammam City 262,309 129,937 132,372 16 Ramagundam UA UA 252,261 128,347 123,914 17 Eluru UA UA 250,693 123,747 126,946 18 Vizianagaram UA UA 239,374 117,412 121,962 19 Proddatur UA UA 217,895 108,986 108,909 20 Nandyal UA UA 211,787 106,034 105,753 21 Mahaboobnagar UA UA 210,143 106,232 103,911 22 Ongole UA UA 206,419 103,541 102,878 23 Adoni UA UA 184,771 92,006 92,765 24 Madanapalle UA UA 179,267 89,692 89,575 25 Chittoor UA UA 175,640 87,480 88,160 26 Machilipatnam (M) City 170,008 83,561 86,447 27 Tenali (M) City 194,649 81,324 83,325 28 Mancherial UA UA 163,875 83,961 79,914 29 Chirala UA UA 162,725 80,215 82,510 30 Nalgonda UA UA 153,736 77,088 76,648 31 Hindupur (M) City 151,835 76,625 75,210 32 Bhimavaram UA UA 147,056 72,457 74,599 33 Srikakulam UA UA 146,988 73,077 73,911 34 Adilabad UA UA 139,103 70,403 68,700 35 Guntakal (M) City 126,479 62,695 63,784 36 Dharmavaram (M) City 121,992 62,186 59,806 37 Kothagudem UA UA 119,450 58,652 60,798 38

38 Gudivada (M) City 118,289 58,941 59,348 39 Narasaraopet UA UA 117,568 59,514 58,054 40 Siddipet UA UA 113,893 56,600 57,293 41 Tadpatri (M) City 108,249 54,027 54,222 42 Suryapet UA UA 106,524 52,800 53,724 43 Miryalaguda UA UA 104,956 52,610 52,346 44 Jagtial UA UA 103,962 51,819 52,143 45 Tadepalligudem UA UA 103,703 51,236 52,467 46 Chilakaluripet (M) City 101,550 50,201 51,349 UA: Urban Agglomeration; M: Municipality Source: Census India 2011, retrieved from www.censusindia.gov.in in 2012 District-wise Slum Population Table - 5 District-wise Total Slum Population in Andhra Pradesh S. No. District Total Slums Population Households 1 Adilabad 180 279,893 63,201 2 Ananthapur 285 402,525 85,664 3 Chittoor 352 254,470 56,218 4 East Godavari 424 434,301 97,520 5 Guntur 546 544,135 111,345 6 Hyderabad 1,581 1,978,537 426,092 7 Kadapa 410 403,070 85,891 8 Karimnagar 238 366,058 76,335 9 Khammam 231 292,733 63,226 10 Krishna 321 169,513 93,824 11 Kurnool 295 408,952 81,433 12 Mahabubnagar 91 147,769 29,237 13 Medak 109 153,735 32,635 14 Nalgonda 154 165,548 35,329 15 Nellore 232 249,708 57,956 16 Nizamabad 147 270,869 45,241 17 Prakasam 153 163,092 36,590 18 Ranga Reddy 55 83,932 13,649 19 Srikakulam 192 144,176 31,492 20 Visakhapatnam 810 55,159 201,404 21 Vizianagaram 194 231,164 59,722 22 Warangal 214 261,383 57,633 23 West Godavari 308 296,420 62,587 TOTAL 7,522 8,953,319 1,904,224 Source: Slum data from MEPMA retrieved from http://www.apmepma.gov.in/ in 2009 39

As per the Mission for the Elimination of Poverty in Municipal Areas (MEPMA), 1,581 slums out of 7,522 in Andhra Pradesh are located in Hyderabad and 19 lakh people reside in the GHMC slums. Table - 5 indicates that the Visakhapatnam and Guntur districts come next after Hyderabad in terms people living in urban slums. Poverty Eradication Programmes in Urban Slums To eradicate poverty in slums, the Government of India is implementing various Urban Poverty Alleviation Schemes. In 1997, the Government of India subsumed the various ongoing national schemes like Urban Basic Services for the Poor (UBSP), Nehru Rojgar Yojana (NRY) and Prime Ministers Integrated Urban Poverty Eradication Programme (PMI UPEP) as a new scheme namely Swarna Jayanti Shahari Rojgar Yojana (SJSRY). The scheme has comprehensively revamped with a view to addressing the drawbacks observed in implementation. The revised guidelines have been effective since 1 April 2009 (The Ministry of Housing and Urban Poverty Alleviation, 2012). The three key objectives of the revised SJSRY are addressing urban poverty alleviation to the urban unemployed or underemployed poor through gainful employment, supporting skill development and training so that the urban poor have access to employment opportunities provided by the market or undertake self-employment, and empowering the community to tackle the issues of urban poverty through suitable self-managed community structures and capacity-building programmes (MHUPA, 2009). The revamped SJSRY has five major components, namely Urban Self-Employment Programme (USEP), Urban Women Self-Help Programme (UWSP), Skill Training for Employment Promotion amongst 40

Urban Poor (STEP-UP), Urban Wage Employment Programme (UWEP) and Urban Community Development Network (UCDN) The above-mentioned programmes have been subject to implementation in convergence with other programmes relating to slum development/urban poverty alleviation, such as Jawharlal Nehru National Urban Renewal Mission (JNNURM), Prime Minister s Employment Generation Programme (PMEGP), Aam Aadmi Bima Yojana (AABY), Rashtriya Swasthya Bima Yojana (RSBY), National Rural/Urban Health Mission (NRHM/NUHM), Sarva Shiksha Abhiyan (SSA)/Rajiv Vidhya Mission, Midday Meals Scheme (MMS), Integrated Child Development Scheme (ICDS), Janani Suraksha Yojana (JSS), National Social Assistance Programme (NSAP), Skill Development Initiative Scheme (SDIS) and Modular Employable Skills (MES). Urban Poverty Eradication Programmes by the Government of Andhra Pradesh From 1995 to 1996, the Government of Andhra Pradesh organized slum women into small groups, namely Development of Women and Children in the Urban Areas (DWCUA). At present, all the stakeholders are using the name of the group as SHG instead of DWCUA. Andhra Pradesh Urban Services for the Poor Programme (APUSP) was a partnership between the Government of Andhra Pradesh and the UK Department for International Development (DFID), which aimed at achieving a sustained reduction in the vulnerability and poverty of the urban poor in Andhra Pradesh. The programme was implemented from 41

1999 to 2007 with financial commitment from DFID, for a period of 7 years in 42 class one municipal towns. On the basis of experiences gained from this programme, the initiative was extended to include all 15 municipal corporations and 109 municipalities under a permanent organization set-up by Mission for Elimination of Poverty in Municipal Areas (MEPMA). The activities of MEPMA were being implemented in the name of Indira Kranthi Patham Urban, and it is in active phase of implementation with effect from 1 September 2007. MEPMA also implemented various urban poverty alleviation programmes as part of centrally sponsored scheme of Swarna Jayanthi Shahari Rojgar Yojana (SJSRY). As part of the implementation of sub-component of SJSRY called Urban Community Development Network (UCDN), the State Government is establishing and nurturing community organizations and structures that facilitate sustained urban poverty alleviation. Towards this end, community organizations like Neighbourhood Groups (NHGs), Neighbourhood Committees (NHCs), and Community Development Societies (CDSs) were formed by MEPMA in the name of SHGs, Slum Level Federations and Town Level Federations in Andhra Pradesh. As part of Urban Women Self-help Programme (UWSP), the state government departments are providing continuous support to SHGs; for example, capacity building, facilitating the SHGs towards savings and credits in addition to its other entrepreneurial activities through Urban Local Bodies (ULBs). 42

Empowerment of Women through Self-Help Groups Empowerment as a concept was introduced at the International Women s Conference in 1985 in Nairobi. The conference defined empowerment as a redistribution of social power and control of resources in favour of women. Women development in recent years emphasized on providing equal opportunities to women by removing gender bias, empowering women and creating self-reliance among them. In the recent years, empowerment of women has been recognized as a central issue in determining the status of women. The participation of women in SHGs has made a significant impact on their empowerment in both social and economic aspects. Empowerment of women is essential for the development of the full potential of our total human resources. If half of our population remains weak and dependent, the development of the nation would only be half-hearted. Empowerment of women is, therefore, the pressing need of the day. Various dimensions of empowerment include psychological, cultural, social, political, and economic empowerment. Psychological empowerment means to establish individual identity, selfimage, increase in self-esteem and developing capabilities. Cultural empowerment will entail redefining gender rules, norms, and recreating cultural practices. Social empowerment includes literacy, social leadership, community action and social inclusion. Political aspects include participation in Urban Local Bodies (ULBs), negotiating political power and, then, accessing it. Economic empowerment occurs when an income security is attained, productive assets are owned and entrepreneurial skills are possessed. 43

All the dimensions are very important for empowerment to occur in a holistic manner. Women nowadays are relatively empowered than their predecessors. Women empowerment leads to a silent revolution in the total socio-economic scenario of the nation. In democracy, an empowered woman is able to exercise her judgement independently and correctly. Empowerment is expected to develop confidence in oneself and bring faith in oneself. Empowerment directly affects the life of women positively. The lifestyle, social status, struggle against injustice, opposition to various kinds of harassment in the society, etc., are the inbuilt qualities of women empowerment. In the light of the above facts, both the government and non-governmental organizations are playing a meaningful, fruitful and effective role in undertaking various activities for women s empowerment in an enlightened society. The need for the empowerment of women is as follows: By empowerment, women would be able to develop self-esteem, confidence and would realize their potential and enhance their collective bargaining power; Women s empowerment is viewed as a continuum of several inter-related and mutually reinforcing components; For capacity building and skill development, especially the ability to plan, make decisions, organize, manage and carry out activities, to deal with people and institutions in the world around them; Women participation in the house, community and society. Thus, empowerment is a process of awareness and capacity building, leading to greater participation, greater decision-making power and control the transformative action. The empowerment of women covers both individual and collective transformation. It strengthens their innate ability through acquiring knowledge, 44

power and experience. To empower the women, the government and NGOs are motivating the women to join the SHGs. In recent years, SHGs are emerging as an alternative credit source to the poor. In these SHGs, collective actions and solidarity are an important empowering mechanism. The empowerment of women through SHGs would lead to benefits not only to the individual women and women s groups, but also for the family and the community as a whole, through collective action for development. An SHG is a group where members come together with certain objectives to manage their own funds and affairs by themselves to achieve better control over their resources and to meet their credit needs (Roul, 1996). The SHGs also play a very vital and critical role towards empowering women in almost all the fields. In recent years, the group approach to various poverty alleviation programmes is getting recognition in India. Mostly, women mobilized into groups for undertaking mutually beneficial social and economic activities. The group provides a base for self-employment and empowerment through group dynamics to women. In India, these mutual-help-based groups are known as a SHG. It was realized in India that SHGs could establish relationship between the formal institutions and the poor for providing information, credit and other facilities. It has been very well-established that providing finance to the poor after organizing them into a homogenous group, commonly known as SHGs, have given statutory results in India and other developing countries, especially among the rural/slum poor women. Group approach to poverty alleviation is 45

gaining momentum in India and other developing countries. This approach aims at inculcating the habits of saving, even in small amounts, supplemented by borrowing from outside sources and the rotation of saved and borrowed funds by lending within the group. Generally, members of the SHGs do not exceed beyond 20 and each group selects a leader called President/Secretary/Group leader among its members. Self-Help Group movement in India India s self-help group (SHG) movement has emerged as the world s largest and most successful network of community based organizations (CBOs). It is predominantly a women s movement. As some experts have pointed out, it is a development innovation in its own right. The SHG bank linkage programme (SBLP), which is the India s own innovation has proved to be one of the most effective poverty alleviation and women empowerment programmes. The SBLP had a modest beginning with 255 credit linked groups and loan amount of Rs 29 lakh in 1992 93. Since then the programme has grown exponentially. In the process, SHGs emerged as a mass movement across the country and largest community based microfinance model in the world. As per NABARD s microfinance report by March 2012, 79.6 lakh SHGs, with an estimated membership of 9.7 crore, have savings accounts in the banks, with aggregate bank balance of Rs 6,551 crore. Over 43.54 lakh SHGs have loan accounts with total loan outstanding of Rs 36,340 crore. However, there remain regional disparities in the growth of the SHG movement with limited progress in eastern and western regions (Raja Reddy & Chandra Sheker Reddy, 2012). 46

MYRADA was an early promoter of SHGs. In the early eighties, MYRADA and the Bhagavatula Charitable Trust, of the Visakhapatnam district in Andhra Pradesh began mutual savings and credit groups in rural areas, mostly among women. These were probably the first instances of rural savings and credit groups in the country, for and of women. In the mid-eighties, there were a few more similar experiments, mostly in Andhra Pradesh and Tamil Nadu. The results were inspiring, and the rural development departments of the Government of India, in the late eighties, invited NGOs, donors and bankers to discuss the possibility of consciously promoting savings and credit groups of women, across the country, in place of the earlier Development of Women & Children in Rural Areas (DWCRA) groups. In the mid-nineties, SHGs became visible across the country. Several NGOs, most state governments, donors and lenders saw in SHGs an opportunity to mobilize rural women to work for their own social and economic betterment. By the late nineties, SHGs were not just savings and credit groups, but were seen as common interest groups. SHGs began sprouting up in many villages/slums, with multiple SHGs being promoted in the same villages/slums. The important milestones in the evolution of the SHG movement can be classified into six major phases (Raja Reddy & Chandra Sheker Reddy, 2012): i) NGOs promote women SHGs as an alternative to mainstream financial services to reach un-reached segments of society; ii) NABARD takes the lead in partnering with NGOs, particularly MYRADA, to pilot the well-known SHG-bank linkage model; iii) State Governments, particularly in the South, take a proactive role in the promotion of SHGs in a big way, by way of revolving loan funds and other support; iv) SHG-Bank linkage reaches the scale 47

of over a million bank-linked SHGs; v) SHG federations emerge to sustain the SHG movement and to provide value-added services; vi) SHGs and SHG federations are given widespread recognition to act as implementing agents of various mainstream agencies such as financial institutions, corporate sector, and government. The recent study conducted by Raja Reddy, K., & Reddy, C. (2012) on Self Help Group in India - A Study on quality and Sustainability with 1942 SHGs in 8 states is indicating the major findings: Membership: the average size of an SHG is around 12 members, women primarily joined SHGs to avail credit to meet their household and livelihood needs, inclusion and exclusion of members based on socio-economic status and affinity of members, socially and economically active women have taken advantage of SHGs. The incidence of dropouts is high in older SHGs, particularly those promoted by Government. Grading: More than three-fourths of SHGs are of reasonable quality (A - 42% or B grade 36 %). Savings: Irregular savings is an issue; no internal lending; no earning for SHG; no growth in own funds; continued dependence on external loans, Unable to manage large group funds and fear of possible misuse of funds. Meetings and Leadership: Monthly meetings are common, still there are some SHGs with no fixed meeting schedule; meetings are irregular, financial agenda dominant in meetings, Leadership rotation (elections) only in 41% of SHGs, SHGs are aware of group norms and only some follow them strictly. Maintenance of SHG account books: Poor quality of book keeping, mostly untrained and unpaid SHG members as book keepers and in majority of SHGs books are kept with leaders. Financial Performance: High dependence on external credit sources than internal fund mobilization, large amount of idle funds 48

among bank linked, and older SHGs, significant number of SHGs are still waiting for grants, and loans from promoters & external agencies, linkage to poor quality SHGs and repayment rate from SHGs to banks is low. Impact: Increased cohesiveness and harmony in SHGs, matured SHGs are engaged in promoting new SHGs & reviving defunct SHGs, growing SHG linkages with village level, organizations, significant reduction in dependence on money lenders, inadequate attention to address social & community issues and participation in Government programs, significant increase in women s selfconfidence levels, significant increase in women s mobility, increased support & encouragement from family, equal access to family assets & control on resources, equal role in decision making at family level, able to cast vote in elections as her will, participation in political activities is minimal, work burden on women increased, on the other hand, husband shares the household work. To know the quality of SHGs, the Government and NGOs are using various Rating and quality assessment tools periodically. Quality Assessment of SHGs The Self-Help Promoting Institutions (SHPI) like non-governmental organizations, Government Departments, Microfinance Institutions objectives are to eradication of poverty and empowering women. But, each SHPI approach and implementation process is different at grassroots level. The main objective of the SHG movement is that the SHG members themselves should manage their groups and SHG federations, and provide financial, social and other services to their members. For meeting these objectives, the 49

SHPIs provide guidance and capacity building to SHGs and its federations. Each SHG has reached different stages based on member s awareness and participation. Some SHGs have able to manage their SHGs by themselves. Still, a large number of SHGs is depended on their promoting agencies for guidance and support, and some SHGs are in preliminary stage. The Study on Self-Help Group in India - A Study on Quality and Sustainability, conducted by Enable, India indicates that 42 percent of the SHGs have reached Grade A; 36 percent of the SHGs have reached Grade B; and 22 percent of the SHGs have reached Grade C (Raja Reddy & Chandra Sheker Reddy, 2012). The grading system for SHGs is helping SHPIs, bankers and government for lending to all Grade A SHGs and providing capacity building for Grade B and Grade C SHGs. Velugu Project s Performance Indicators for SHGs The Society for Elimination of Rural Poverty (SERP) is implementing the Indira Kranthi Velugu programmes in Andhra Pradesh since last 10 years. Under this programmes, the SERP has practicing the various performance indicators for SHGs (Society for Elimination of Rural Poverty, 2002) like Simple but comprehensive books of accounts, A system of conducting weekly group meetings, Thrift and internal lending and leadership rotation, and so on NABARD s Performance Assessment Tool The National Bank for Agriculture and Rural Development (NABARD) has introduced the Critical Rating Index (CRI) for SHGs to assess the SHG performance for bank linkage programme. In 2002, the CRI of SHGs was introduced by the Government of 50

Andhra Pradesh through Government Order (Society for Elimination of Rural Poverty, 2012). The major Performance Indicators of SHGs in CRI are feeling of belongingness/homogeneity/solidarity (as observed during interactions with the group), Governance issues (additive value), conduct of meetings (during the last six months), attendance of members in meetings (during last six months), financial transactions in the group (during the last six months), members awareness about all financial transactions, regularity of savings (during the last six months), pattern of internal lending, velocity of internal lending, repayment terms prescribed, repayment pattern, borrower quality (number of defaulting members), loan quality (Formula: Amount overdue for more than 3 months/total loans outstanding) and up to date maintenance of records. The banks categorize the SHGs into four categories based on SHG performance. If any SHG gets 70 marks or above it is eligible to get loans from respective banks. The Category A can be considered for loan if get score between 70 and100, Category B can be considered Capacity building required, if get score between 50 70 and Category C can be considered intensive capacity building required if score get less than 50. Score for groups without internal lending = 0: cannot be considered for loaning. APMAS s Assessment Tools for SHGs and Federations The APMAS is a national level NGO. It works on strengthening the SHG movement in India. It has upgraded the CRI tool as a CRI+ along with their federation rating tool called GRADES. The APMAS has mentioned the following performance indicators in its CRI+ tool. Basically, they are looking at three major aspects like systems, self management, social and financial performances. The APMAS has given 40 percent 51

weightage for member SHG performance (APMAS, 2012). Under Systems and self management, the APMAS is assessing the group on homogeneity of group, regularity of meetings, attendance level, quality of recording systems, member participation in decision-making, ability to enforce norms, financial transactions within the group, default management and conflict resolution mechanism and member s awareness. Under Social indicators, the APMAS is assessing the SHG on member awareness/participation in social development activities, decision-making ability of the group members and Impact. Under financial, regularity of savings last one year, velocity of internal lending, repayment terms, monthly repayment pattern, asset quality, borrower quality, external loan repayment, percentage of production loan funds, portfolio distribution among members and average idle fund. Sa-Dhan s SHG rating tool Similarly, the Sa-Dhan is an association of community development finance institutions. It has also developed online SHG rating tool. The tool assesses performance of SHG on seven broad areas (Sa-Dhan, 2012): 1. Group constitution: Looks at the shared meaning that the members have about the existence and future of their group. The group is expected to have both economic and social perspectives and therefore rated on both these aspects. 2. Organizational discipline: Tracks among others, regularity of meetings, attendance and savings. 3. Organizational systems: This section gives a check-list for assessing rule enforcement, book-keeping and documentation. 52

4. Financial management and performance: Demands compilation of financial indicators of the credit operations of the SHG. 5. External linkage: Takes stock of the relationship between the SHG and banks and other financial institutions, cluster federations, and their community. 6. Social and community action by SHGs: Measures the social and community initiatives taken by the SHG/members. 7. Self-reliance in management affairs: Assesses the capacity to manage their dealings themselves. Overall Objectives of SHPIS to promotion of SHGs Each SHPI has different objectives. Also, there are many rating tools available for assessing the performance of SHGs. There is a commonality in the objectives and rating tools (Srinivasa Rao & Narasimha Raju, 2011). The SHPIs are promoting SHGs towards eradication of poverty (access of minimum of needs by poor families), to empower the women (role changes for women), enhancement of skills and knowledge and access information on ongoing government programmes. To achieve these activities, the SHPIs are implementing activities like group constitution and functioning (Decision-making, ownership and accountability), placing Systems and procedures, enhancing capacities on financial management, performance & external financial linkage, utilization of loans, income generation, microenterprises, solving personal and family problems and participation in social, community and collective action. 53

Role of SHG Promoting Agencies in Management of SHGs During initial formation stage of SHGs, the promoting agencies have ownership and control on SHGs and its members. The results of many studies show that still, the SHG members depend on SHPIs. There is a need that SHPIs should play only facilitation and guidance role for SHGs. Initially, due to lack of confidence and trust within SHG members, the SHGs depended on them. Even today most of the SHG members are unable to take the responsibility. But these SHPIs should provide guidance to the SHGs and its federations on to access various resources from external agencies. Many NGOs and policy makers have suggested that the SHGs can be federated at slum level/town level and registered as primary and secondary cooperatives. Cooperative is the best suited institutional form for the SHG federations since both SHGs and cooperatives function essentially on the same principles and practices. However, it requires enabling cooperative laws, such as the Mutually Aided Cooperative Societies Act 1995 of Andhra Pradesh. There are many successful case studies like Mulkanoor Women s Cooperative Diary, Karimnagar District and Padmavathi Mahila Abhyudaya Sangham, Tirupathi, both are giving inspiration to many SHGs and SHG federations; these are successful SHG federations and also member-owned, member-controlled federations. These federations are generating good revenues. All the members are satisfied with their federation s services; members have started very good enterprises and are getting very good income. They are solving their social and community problems with their collective action. 54

Self-Help Groups in Urban Slums of Andhra Pradesh Generally, women in slum areas have problems like lack of minimum basic amenities, like a house, drinking water, health facilities, access to credits, discrimination in various places, no importance or representation in urban local bodies, etc. Most of the children in slum areas are not going to school. There is no proper mechanism and service delivery points at slums to overcome poverty for women and poor families. The State Government departments and local bodies were implemented under many central- and state-sponsored schemes by 1997. During the middle of 1997, the government recognized the microfinance as a solution for poverty reduction, based on Bangladesh and MYRADA experiences. As a result, the Government of Andhra Pradesh succeeded in the formation of SHGs in rural and urban areas. The government also set up the two state level institutions to eradicate poverty through the formation of SHGs, the first is the SERP for rural areas and the second is MEPMA for urban areas. There are 11,200,110 members in 1,308,868 SHGs exclusively for women in the rural and tribal areas of Andhra Pradesh. Approximately 41,058 Village Organizations (VOs), 1,053 Mandal Samakhyas (MSs), and 22 Zilla Samakhyas have come into existence in 22 districts. The Table 6 explaining that, in urban areas, there are 272,108 SHGs with 285,076 members functioning in 7,522 urban slums. Apart from the state government, the NGOs and microfinance institutions (MFIs) facilitated the formation of various groups, namely SHGs, mutually aided cooperative societies, joint liability groups and federations in entire Andhra Pradesh. Due to lack of coordination between the government and other SHG promoters, the SHG members have duel membership in various groups. As per MEPMA 2009 data, there are 24,134 SHGs functioning in 1,456 slums of GHMC. MEPMA collected the data in 2012 of the urban areas. As per the new data, there are 398,799 women members in 44,467 SHGs. 55

Table - 6 District-wise SHGs in Rural, Urban and Tribal Areas of Andhra Pradesh Rural Urban Tribal S. No. District Total SHGs Total Members Total SHGs Total Members Total SHGs Total Members 1 Adilabad 23,883 239,111 6721 68,455 14,359 159,556 2 Anantapur 58,562 582,346 11,916 119,862 0 0 3 Chittoor 71,567 630,099 11,619 100,526 0 0 4 East Godavari 96,955 803,054 17,498 164,836 5,232 47,043 5 Guntur 79,380 543,993 21,726 204,118 0 0 6 Hyderabad 0 0 44,467 398,799 0 0 7 Kadapa 40,057 351,427 11,442 99,196 0 0 8 Karimnagar 63,752 645,801 11,353 104,786 0 0 9 Khammam 38,795 337,057 8,459 83,321 19,095 148,627 10 Krishna 67,073 539,913 21,737 159,330 0 0 11 Kurnool 55,412 493,279 14,150 113,334 0 0 12 Mahabubnagar 61,772 597,147 3,732 40,085 0 0 13 Medak 48,404 458,686 3,706 38,755 0 0 14 Nalgonda 81,533 602,345 5,553 52,916 0 0 15 Nellore 48,382 354,379 8,320 80,381 0 0 16 Nizamabad 42,985 398,,015 8,706 56,608 0 0 17 Prakasam 67,794 430,744 5,409 53,892 0 0 18 Ranga Reddy 42,994 326,050 1,401 14,536 0 0 19 Srikakulam 41,430 388,791 4,020 44,444 8,991 73,689 20 Visakhapatnam 41,972 416,648 23,892 223,926 10,625 99,347 21 Vizianagaram 36,348 335,094 5,854 66,288 8,108 79,987 22 Warangal 55,,264 510,409 9,978 103,855 4,987 36,825 23 West Godavari 73157 570,648 10,429 92,827 0 0 TOTAL 1,237,471 10,555,036 272,108 2,485,076 71,397 645,074 Total SHGs in Andhra Pradesh: 1,580,756 (rural + tribal + urban areas) Total SHG members in Andhra Pradesh: 13,684,454 (rural + tribal + urban areas) Source: SHG data from SERP and MEPMA, retrieved from www.apmepma.gov.in and http://www.serp.ap.gov.in/shg/index.jsp in 2009 56