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PROJECT ON
“ A STUDY OF SHG – NABARD PATNERSHIP TO
EVOLVE POOR’S LIFE STYLE ”

Bachelor of Commerce
[Banking & Insurance]
Semester Vth
(2016 – 2017)

Submitted
In partial Fulfillment of the requirements
For the award of degree of
T.Y.B.COM (Banking & Insurance)
By

Miss. AKSHATA ASHOK RANE

TOLANI COLLEGE OF COMMERCE

Andheri East,
Mumbai 400 093
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CERTIFICATE

This is to certify that MS. AKSHATA ASHOK RANE of T.Y.B.Com.

Banking & Insurance Semester Vth (2016-2017) has successfully completed

the project on “A STUDY OF SHG –NABARD PATNERSHIP TO

EVOLVE POOR’S LIFE STYLE ” Under the guidance of

MRS.VAIBHAVI DALVI .

_________ _________ ________ _________

Project Guide Coordinator External Principal
Examiner
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DECLARATION

I AKSHATA ASHOK RANE the Student of T.Y.B.Com (Banking &

Insurance) Semester Vth (2016 -2017) hereby declared that I have completed

the project on “A STUDY OF SHG – NABARD PARTNERSHIP TO

EVOLVE POOR’S LIFESTYLE”

The Information Submitted is True & Original to the Best of my knowledge.

Signature of Student

Seat No._____
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ACKNOWLEDGEMENT

Preparing the project on A STUDY OF SHG-NABARD PARTNERSHIP TO EVOLVE POOR’S

LIFESTYLE has given me extensive practical knowledge related to the course.

I would like to first thank our Principal Dr. Vijaya Krishna, for her valuable support in preparing this

project.

I express my deep sense of Gratitude to the Coordinator, Mr. Ishtiyaq Chiplunkar for the valuable

guidance and support during my project work.

I am thankful to my guide Prof. Mrs. Vaibhavi Dalvi for providing me the guidance throughout the

course of this project. I am also thankful to him/her for patiently and critically evaluating the content of

this project.

I would like to take this opportunity to express my gratitude to all the staff of the Library and the

Computer Lab for their support.

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INDEX

Sr .no TOPIC Page no

1. Executive summary 6

2. Introduction 8

3. Literature review 11

4. Objective of the study 12

5. Problem of the study 13

Research design 16
6.

7. Data interpretation 19

8. Findings & suggestion, recommendations 23

9. Conclusion 24

10. Bibliography 25
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EXECUTIVE SUMMARY
Poverty is considered as social phenomena, contaminated in an every socio-economic zone,
spreaded itself among all over the deprived section of the population gradually. The role of self-help
group approach in eradication of poverty, its successiveness in generating income and the impact of
micro credit on the empowerment of the women members of the self-help groups.

Removal of poverty is the main objective of planning in India since from the inception of
planning periods and so; the poverty alleviation programmes have been given greatest importance in the
field of economic development. For the removal of poverty, a direct anti-poverty scheme is required so
that it can combat with all those factors which tend to increase the forces of poverty in the both rural and
urban areas. But the process of poverty alleviation can be more sustainable when all the members of the
family are involved. Therefore, reduction of poverty should be an important concern of the development
countries in order to attain economic development and welfare of the people. For alleviating rural
poverty and freeing the rural masses from the vicious circle of poverty, a direct implementation of anti-
poverty scheme is urgently required for which credit has long been identified as one of the most crucial
input for the upliftment of people.

In these circumstances, self help groups (SHGs) have become a significant movement in
India. SHGs can be registered and generally consist of voluntary micro-entrepreneurs from similar social
and economic backgrounds. Self help group members meet up to save small amounts of money regularly
and make mutual agreements when contributing to a common fund or meeting a member’s emergency
needs. According to the Reserve Bank of India, peer pressure is an indispensable element in self help
groups because it ensures the proper use of credit as well as the timely repayment of loans; the bank
recognizes peer-pressure as an effective substitute for collateral. Self help groups becoming a major tool
for bringing economic development to India’s poor while also contributing to community
empowerment, the movement has drawn international praise.
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Many self help groups are attached to banks for micro-credit transference, it is called as SHG
LINKAGE PROGRAMS. This practice originated in1992 when the National Bank for Agriculture and
Rural Development(NABARD) began a pilot project linking 500 SHGs to state banks. The project
maintained these linkages between SHGs and NABARD to provide credit and keep group savings. SHG
members were encouraged to regularly save what they could and the banks provided for the financial
needs that were beyond their savings. Eventually, these activities became a part of mainstream activity
in India’s rural finance system.

The self-help group (SHG) approach is a new paradigm into the field of rural development
with the main objectives are to increase the well-being of the poor people, provide access to resources
and credit, increase self-confidence, self- esteem and increase their creditability in all aspects of lives.
Self-help group is a voluntary and self-managed group of women, belonging to similar socio-economic
characteristics, who come together to promote savings among themselves. The poverty alleviation
intervention of the self help group is in the form of undertaking economic programmes to provide
employment, giving micro finance services to the poor so that they can get themselves acquainted with
skills and occupational diversification.
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INTRODUCTION

Self-help groups (SHGs) play today a major role in poverty alleviation in rural India. Self-help as a
strategy for social development places emphasis on self-reliance, human agency and action. It aims to
mobilize people, to give them voice and build peoples organizations that will overcome barriers to
participation and empowerment. The SHG system has proven to be very relevant and effective in
offering women the possibility to break gradually away from exploitation and isolation. Almost all
major donor agencies support SHGs in India in one way or another and many success stories are
available, describing how membership in a SHG changed the life of a particular individual or group for
the better. Many NGOs are promoting the SHG mechanism and linking it to various other development
interventions.

Self Help Group is about people coming together with others who are affected by a particular
issue to support each other and to work together to change the disadvantage affecting them. SHGs have
another very important role to play particularly in the transfer of technology to user group population. It
has been found by the members of SHGs that they offer them organizational base, large resources and
access to modern technology leading to employment and income generation. Thus, SHG movement
among the rural poor in different parts of country is emerging as a very reliable and efficient mode for
technology transfer. However, it is strongly felt that the pace of transfer and popularization of
technologies must be accelerated so that even the small farmer can benefit from new technologies.

SHG is group of rural poor who have volunteered to organize themselves into a group for
eradication of poverty of the members. They agree to save regularly and convert their savings into a
common fund known as the group corpus. The members of the group agree
to use this common fund and such other funds that they may receive as a group through a common
management.
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Generally a self-help group may consist of 10 to 20 persons. However, in difficult areas like deserts,
hills and areas with scattered and sparse population and in case of minor irrigation and disabled persons,
this number may be from 5-20. The dissicult areas have to be identified by the state level committee and
the above relaxation in membership will be permitted only in such areas.

The group should devise a code of conduct to bind itself. This should be in the form of regular
meetings, functioning in a democratic manner, allowing free exchange of views, participation by the
members in the decision making process.

The group should be able to draw up an agenda for each meeting and take up discussions as
per the agenda. The members should build their corpus through regular savings. The group should be
able to collect the minimum voluntary saving amount from all the members regularly in the group
meetings. The savings so collected will be the corpus fund. The group corpus find should be used to
advance loans to the members. The group should develop financial management norms covering the
loan sanction procedure, repayment schedule and interest rates.

The group should maintain simple basic records such as minutes book, Attendance register,
Loan ledger, General ledger, Cash book, Bank passbook and individual passbooks. The sample
proforma for maintenance of above records by the group is in the Annexure 2 for guidance. These could
be used with necessary changes/modifications wherever required. 50 percent of the groups formed in
each block should be exclusively for the women. In the case of disabled persons, the groups formed
should ideally be disability-specific groups are not available, a group may comprise of persons with
diverse disabilities or a group may comprise of both disabled and non-disabled persons below the
poverty line.

The joint liability of the group enables the poor to overcome the problem of collateral security and also
has an in-built mechanism of peer monitoring leading to better loan recoveries and productive credit
utilization.

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

The origin of SHGs could be traced to mutual aid in Indian village community co-operatives,
which are formal bodies, whereas SHGs are informal groups, which encourage savings and promote
income-generating activities through small loans.
The experiences available in the country suggest that SHGs are sustainable, reliable, stimulates savings
and in the process help borrowers to come out of vicious circle of poverty. These groups are called as
“solidarity groups” as they provide monetary as well as moral support to individual members in times of
difficulties. Zaman pointed out, that self-help groups have played valuable roles in reducing the
vulnerability of the poor, through asset creation, income and consumption smoothing, provisions of
emergency assistance and empowering and embroidering women by giving them control over assets and
increased self-esteem and knowledge.
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NABARD

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

ROLE OF NABARD

 Serves as an apex financing agency for the institutions providing investment and production
credit for promoting the various developmental activities in rural areas.

 Takes measures towards institution building for improving absorptive capacity of the credit
delivery system, including monitoring, formulation of rehabilitation schemes, restructuring of
credit institutions, training of personnel,etc.

 Co-ordinates the rural financing activities of all institutions engaged in developmental work at
the field level and maintains liaison with Government of India, state governments, Reserve
Bank of India and other national level institutions concerned with policy formulation.

 Undertakes monitoring and evaluation of projects refinanced by it.

 Acts as a coordinator in the operations of rural credit institutions

 Extends assistance to the government, the Reserve Bank of India and other organizations in
matters relating to rural development.

 Offers training and research facilities for banks, cooperatives and organizations working in the
field of rural development providing assistance to eligible institutions in agriculture and rural
development Acts as regulator for cooperative banks and RRBs.
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LITERATURE REVIEW

 This study is based on the review of some relevant studies. The studies reviewed are excellent
source to understand the process of change, though they do not provide precise estimates of
impact assessment parameters. Formation, functioning and impact are the broad issues examined
in the studies.

 Sarkan (2001) pointed out on his study that, SHG is the useful tool in building the capacity of the
poor management of sustainable self employment opportunities, besides providing other
financial services like savings, housing consumption credit, insurance cover etc., through
NABARD. The nation policy on SHG should emphasize on encouraging initiatives and
participation of different type of institution in microfinance, bring the microfinance activities,
irrespective of the type of institution involved, with in the regulation and supervision of
completed authorities, creating policy environment.

 Rao (2002) on his study “women self help groups (SHGs) and microfinance schemes” he has
pointed out that micro provide credit access to poor with no collateral obligation. It encourages
savings and promote income, generating activities, loans and provided at the market driven rates
of interest and poor pressure is used in repayment,microfinance is carried out through self help
group where poor come together through their saving and loans with the help of NABARD.

 Joshi (2002) on his study he has pointed out that the micro credit programme extend loans to
poor people for self-employment projects that generate income with the help of NABARD,
allowing them to care for themselves and their families, to their clients in addition to credit for
self employment. The rural areas the poor have been dependent on money lenders for their
financial needs, either marriage in the family, illness or any other emergency need, money lender
always exploit the situation.

 Kamal Vatta (2003) on his study SHG and poverty alleviation he has pointed that the
microfinance involves financing for SELF HELP GROUPS which are small, informal and
homogeneous groups, of the not more than 20 members. The members have poor risk taking
ability, no collateral to other and have limited earning opportunities. The working fund grown
with time and group can also approach financial institution for credit. The group keeps taking
decisions as in the past but with more resources.

 NABARD and SHGs, it is clearly understood that the SHGs are tool to promote rural savings
and gainful employment. Through this, the rural poverty is reduced considerably. Therefore
women members are economically independent and their contribution to household income has
also increased. The present study is also focusing the economic improvement of women after
joining SHGs.
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OBJECTIVE OF THE STUDY

 To study the social conditions of members of SELF HELP GROUPS.

 To study the economic conditions of members of SELF HELP GROUPS.
 To analyze the impact of microfinance on ERADICATING RURAL POVERTY.
 To study the SELF HELP GROUPS performance in providing microfinance services to
the members.
 The National Bank will be an apex organization in respect of all matters relating to
policy, planning operational aspects in the field of credit for promotion of Agriculture,
Small Scale Industries, Cottage and Village industries, Handicrafts and other rural crafts
and other allied economic activities in rural areas.
 The Bank will serve as a refinancing institution for institutional credit such as long-term,
short-term for the promotion of activities in the rural areas.
 The Bank will also provide direct lending to any institution as may approved by the
Central Government.
 The Bank will have organic links with the Reserve Bank and maintain a close link with
in.
 Preparing of potential linked credit plans for identification of exploitable potentials under
agriculture and other activities available for development through bank credit.
 Refinancing banks for extending loans for investment and production purpose in rural
areas.
 Involvement in implementation.
 Participatory planning.
 Inculcating culture of self-help.
 Ensuring sustainability.
 Local resource contribution.
 Promote sustainable Agriculture & Rural development.
 Recognizing the value of Agricultural Biodiversity.
 Promote AWARNESS & Education Activities.
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PROBLEMS OF STUDY
Poverty and unemployment are the twin problems faced by the developing countries. The SHGs are
informal groups formed on a voluntary basis, for providing the necessary support to their members for
their social and economic emancipation. The distinguishing feature of the SHGs is creating social and
economic awareness enables the members to lead their life in a sound hygienic environment and pursue
a better living. The woman members involve themselves more in taking decisions regarding the
education of their children, the investment of the family, managing the economic assets of the family
and bringing up cohesion among the members of the family and others for a better living.
On the economic point of view both men and women work shoulder to increase the
income of the family. Every member of the SHGs has felt the need for more involvement in economic
activities. The spirit for social and economic upliftment of members is the significant contribution of
each and every SHG. There is a general tendency to consider the SHGs as a panacea for all the ills of the
rural community.
Generally, the problem arises within a SHG because of the presence of women with
diverse nature and habits within a single group who disagree over various issues. As a result, that group
as a whole face problems in organising the rules and managing the activities of the group that could have
led to their common benefit. The major problems faced are the passive attitude of the group members,
difference in opinion among the group members, problems arising from constant late or no repayment of
loans by a particular member and other personal problems.
Usually, the groups with capable leaders are able to co-ordinate and control these
problems efficiently such that these problems do not hamper the activities of the group. They convince
the members so that mutual understanding is increased and build up a uniform financial discipline
within the group without facing any difficulties. The role of NGOs in solving these petty issues within a
group is immensE

 Lack of access of people to government

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

Even though the authorities take measures for creating awareness among the group members about
the schemes beneficial to them, still majority of the group are unaware of the schemes of assistanc
2. Inadequate Training Facilities

The training facilities given to the members of SHGs in the specific areas of product selection, quality of
products, production techniques, managerial ability, packing, other technical knowledge ate are not
adequate to compete with that of strong units.

3. Problems Related with Raw Materials:

Normally each SHG procures raw materials individually from the suppliers. They purchase raw
materials in smaller quantities and hence they may not be able to enjoy the benefits of large scale
purchase like discount, credit facilities etc.

Moreover, there is no systematic arrangement to collect raw materials in bulk quantities and preserve
them properly. There is no linkage with major suppliers of raw materials. Most of the SHGs are Ignorant
about the major raw material suppliers and their terms and conditions. All these causes high cost of raw
materials.

4. Problems of Marketing:

Marketing is an important area of functioning of the SHGs. However they face different problems in the
marketing of products produced by them.

Following are the major problems relating to marketing.

(a) Lack of sufficient orders.

(b) Lack of linkage with the marketing agencies.

c) Lack of adequate sales promotion measures.

(d) Lack of permanent market for the products of SHGs.

(e) Absence of proper brand name.

(f) Poor/unattractive packing system.

(g) Poor quality of products due to the application of traditional technology, resulting In poor market,

(h) Stiff competition from other major suppliers.

(i) Lack of a well defined and well knit channel of distribution for marketing.
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5. Lack of Stability and Unity Especially among women SHGs:

In the case of SHGs dominated by women, it is found that there is no stability of the units as, many
married women are not in a position to associate with the group due to the shift of their place of
residence. Moreover, there is no unity among women members owing to personal reasons.

6. Exploitation by Strong Members:

It is also observed that in the case of many SHGs, strong members try to earn a lion’s share of the profit
of the group, by exploiting the ignorance and illiterate members.

7. Weak Financial Management:

It is also found that in certain units the return from the business is not properly invested further in the
units, and the funds diverted for other personal and domestic purposes like marriage, construction of
house etc.

8. Low Return:

The return on investment is not attractive in certain groups due to inefficient management, high cost of
production, absence of quality consciousness etc.

9. Inadequate Financial Assistance:

It is found that in most of the SHGs, the financial assistance provided to them by the agencies concerned
is not adequate to meet their actual requirements. The financial authorities are not giving adequate
subsidy to meet even the labour cost requirements.

10. Non-co-operative Attitude of the Financial Institutions:

The Financial Institutions do not consider SHGs seriously while providing finance and other help.

11. Inadequate and ill-trained staff to meet the challenges:

The attitude of the staff of the rural development department is not encouraging. They are not well
trained to accept the challenges and equip the SHGs self-reliance.

12. Inadequate Support from Line Department:

For obtaining assistance and support, the group members have to approach the line officers. However
the line officers are not co-operative with the SHGs. This will hamper the very objective of the schemes.
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Research design
1. Methodology: 4.1A

During the process a detailed study was conducted to understand the genesis Self Help Group-Bank
Linkage model of Microfinance and the factors impacting the empowerment of the rural poor. The
factors effecting the functions of SHGs, NGOs and Banks in Raigad District.

a) The Secondary Data Collection:

The survey involved with review of literature and publications reports of government bodies like RBI,
NABARD, Planning Commission, DRDA, Public Sector Banks, Local Panchayats and the research
reports and case studies from various Microfinance Institutions and NGOs .

b) The Primary Data Collection:

Involves required discussions with experts from Bankers, SHGs, NGOs who has been involved with
SHG-Bank Linkage Program, related activities and with personnel related/non related with SHG-Bank
Linkage using direct interview methodology, email and questionnaires.
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c) The Field Survey:

A Pilot study was conducted with a sample 100respondents covering all the classes from SHG-non
SHG. A good rapport was first established with the respondents with the help of senior bankers and
academicians already associated with NGOs and SHG activities, especially from those have deep
understanding of the tribal habitability and their livelihood practices. The questionnaire is designed
in such a way to obtain information of socio, economic, and cultural activities from individuals and
no.of accounts and NPAs Bankers.

The analysis on data collected for pilot study was analysed to find out the suitability of the
questionnaire and the information collected. Consequently the questionnaires were modified with
consultancy with the experts from NABARD, Guide and other subject related experts.

i) Type of Questionnaires:

To achieve the purpose three different questionnaires for the study of 1) Individual those not
involved in SHG activities or not aware, 2) Those involved in SHG and Bank Linked and 3) Banks
were prepared.

ii) Questionnaire Design :

where questions are pointers and open ended so as to facilitate a discussion, to understand the issues
involved in SHG formation criteria, members socio-economic background, bankers role in the SBLP
operations and its impact on their development. These tools are targeted to obtain in-depth
understanding of the concept of “SHG-Bank Linkage Program” its operational conditions at
sample/targeted area.

d) The Data Acquisition stage:

This stage is a combination of collecting data from the contact points such as NGOs, Local
Panchayats, District Collector, Welfare Officers, Lead Bank Officer of the respective Banks (Bank of
India).

e) The Data Analysis:

This would involve analyzing the data collected and would also include ensuing the quality of data
also.
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2. Sample Design:
The structured questionnaires were administered to the following samples: 4.1

S.No Organisation Total Sample Targeted sample Actual Collected

01. SHGs
a) Visakhapatnam,
Raigad, & Thane, 2500 400 400

02 Individuals 7000 4200 3072

03. Bankers, Chairman of the SHGs 450 124 123

Total 13900 4724 3595

3. The criteria used for sample selection:

Though the SHG activityhelp economic empowerment of women, the change in their familial and social
status and sense of organizational bonding, the awakening of self confidence and self-respect, social
and political awareness; is a slow process and to achieve it, a member should have sufficient
experience of well established and well run SHG.

Hence the following criteria were used for sample selection(as per NABARD guidelines for suitable
SHGs):

1) The SHG should be 2 to 3 years old.

2) The sample should be representative of the entire district. Hence the study tried to cover more
Talukas & Tahsils from the district.

Secondary Research:
The secondary data were collected from the Annual Reports and administrative guidelines of the
Ministry of Rural Development, Government of India as well as from the classified data available
with the Offices of the states and SGSY coordinating departments of the districts of Visakhapatnam,
Thane and Raigad.
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Data interpretation

Case study
Development economists like Bang et al (2002), Godbole (2002) and Patel (2003) as well as
newspaper reports have highlighted the problem of child malnutrition and starvation deaths in rural areas
due to abject poverty. Acharya and Ghimire (2005) and Kabeer (2005) define economic poverty as lack
of income necessary to satisfy basic needs like food, clothing and shelter. Human poverty includes
reduced capabilities such as illiteracy, malnutrition, poor maternal health, lack of access to medical
services and death from preventable diseases.

semi-urban or urban areas for enabling them to raise their income levels and living standards.
Chiranjeevulu (2003), regards SHGs as a model for “harvesting women’s collective strength for poverty
alleviation”. Millions of poor women, struggling to make a living through home-based enterprises or
tiny initiatives in the informal sector, desperately need small amounts of credit to break their dependence
on middlemen. The availability of credit without collateral on easy terms has enabled these enterprises
to survive.

Bernardshaw (1999), Sarangi (2003) and Tripathy (2004) have highlighted the fact that women-led
SHGs as a medium of microfinance is gaining momentum in the endeavour to alleviate poverty of the
marginalised sections and tribals and empowerment of women. The credit needs of the rural poor are
determined in a complex socio-economic milieu where it is difficult to adopt a project-lending approach
as followed by banks and where the dividing line between credit for ‘consumption’ and ‘productive’
purposes is blurred. Under the circumstances, a non-formal agency of credit supply to the poor in the
form of an SHG of the poor could emerge as a promising partner of the formal agencies. Kannabiran
(2005), optimistically points out that the feminisation poverty, a serious concern so far is now giving
way to the feminisation of microcredit.

Credit targeted to women was more likely to benefit a whole family whereas in the case of men it is
not so. Women make productive use of credit for self-employed micro-enterprises and are prompt in
repayments, with average repayment rates above 90 per cent, much better than recoveries under normal
lending. They are also more responsive to peer pressure and hence the default rate in payment among
women is almost nil. Women are not only much better borrowers than men but they also exhibit a whole
range of human skills.

However, historically access and terms of credit have discriminated against women. The
marginalisation of rural women with respect to credit was causative in the emergence of SHGs. The
micro -credit programme for women through SHGs plays a significant role in improving the standard of
living and family welfare (Usha, 2003). Studies conducted by Muthayya (1980), Misra (1994),
Sithalakshmi and Jothimani (1994), Mishra (1999), Steele et al., (2001), Swaminathan (2002),
Chiranjeevulu (2003), Sarangi (2003) and Kabeer (2005) have highlighted the fact that it has a positive
impact on economic growth and the social status of women.
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Das (2000) has highlighted the significance of Mahila Mandals - the traditional local organisations of
women in gender politics in Thane district. Mahila Mandals are groups of women that seek to build a
collective of women for joint action and provide forums to articulate the practical problems of village
women. Studies conducted by Sithalakshmi and Jothimani (1994), Usha (2003) and Narasaiah (2004)
have pointed out that women’s income tends to be consistently utilised for expenditure on health and
nutrition which benefit the whole family.

Microfinance as a tool for empowerment of the poorest of the poor was pioneered by Bangladesh’s
visionary banker Professor Muhammad Yunus founder of the Grameen Bank an endeavour for which he
was awarded the 2006 Nobel Peace prize. Microfinance a buzzword in almost all the developing
countries refers to provision of small amounts of finance to the poor, especially women in rural areas
with flexible repayment facilities at reasonable rates of interest. It envisages mobilising thrift and
supplementing it with a loan from financial institutions. Lieten (1998) has rightly quoted Grameen Bank
director Muhammad Yunus, “Small credits to individual families, mostly women, as members of a
control group, are supposed ‘to refer poverty back to the museum.”

A Self-Help Group (SHG) is a group that consists of about 10 to 20 persons of a homogenous class
who come together with a view to address common problems. Voluntary savings are collected on a
regular basis and the pooled resources are used to make small interest bearing-loans to members. In the
dark environment of credit indiscipline, Women’s Thrift and Credit Societies have emerged as torch
bearers of thrift and self-reliance (Parthasarathy, 2003). In performing this function, they also emerge as
training grounds for economic democracy of women.

SHGs have become a powerful source for identification of problems and intervention. Regular
meetings of the SHGs serve as a useful forum to women who otherwise live in isolation. Besides
focusing on entrepreneurial development of the beneficiaries and the village as a whole, the groups
undertake the responsibility of delivering non-credit services such as literacy. Adult education hopes to
remedy the educational deprivation of the adult population in order to develop their full potential and
make the development process sustainable.

Women’s SHGs are spreading a silent revolution in terms of economic and social empowerment
across poverty-stricken swathes of rural India (Roy, 2006). Jawaharlal Nehru has rightly stated, “The
greatest revolution in a country is one that affects the status and living conditions of its women”
(Thenmozhi et al, 2002). Remedios (2006) quotes Patankar-Mhaiskar who characterises the SHG
movement of tribal women as a revolution of sorts. The study substantiated the view that the normally
submissive and weaker sections suddenly begin to feel empowered. Small economic activities may not
even make a dent on the economy of the State but they work wonders for the rural woman who is
otherwise at the mercy of her environment.

The main objective of the study is to examine the impact of SHGs as a poverty-alleviation tool. It
aims at exploring the impact of SHGs on standard of living and family welfare.
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Inorder to examine the impact of SHGs on poverty-alleviation, Talasari taluka in Thane district of
North Maharashtra, India was chosen. The improvement in employment, income, quality of diet,
housing structure and female literacy through SHGs were explored.

The study is based on both primary and secondary data. Secondary data was collected from relevant
articles, reports, Economic Surveys of India and Maharashtra, Block Development Officers’ records
from the Panchayat Samiti and bank records. An extensive literature review, a series of discussions and
a pilot visit were instrumental in preparing two detailed questionnaires. The questionnaires were
bilingual i.e. the questions were worded in English and Marathi as the population covered was
predominantly Marathi-speaking. The first questionnaire was aimed at obtaining information about the
SHG as a whole while the second one tried to obtain information about individual members. The
questionnaire relating to individual members was divided into three parts. The first part dealing with
personal details of members, Part A dealing with the details of members before joining the SHG and
Part B with the details of respondents after joining the SHG.

Secondary data pertaining to SHGs was collected between October and December 2003. A pilot
survey was undertaken in May 2004 to test the questionnaires in the village of Karazgaon in Talasari
and accordingly the questionnaire was modified to accommodate relevant entries. Primary data was
collected in the period between October 2004 to May 2005 through the interview method, structured
questionnaires and observation. Due to the homogeneous nature of the population Simple Random
sampling was used. The questionnaires were directly administered by the researcher by door-to-door
visits to the dwelling units of the respondents. In many cases data was collected from respondents at
their workplaces such as fields, flour mills, retail shops, vermiculture – compost pits or at the Gram
Panchayat where they had gathered. Actual observation of their lifestyles corroborated the veracity of
the data collected through the questionnaire.

Primary data was collected from 39 female SHGs out of the then existing 85 female SHGs and the sub-
sample consisted of 201 female respondents. Thus the size of the sample was 45.88 per cent of the
universe.

Number of Members
No. of
Sr. No. No. of members SHGs
30
1 10 (76.93)
09
2 Between 10 - 20 (23.07)
39
Total (100.00)
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More than three -fourths of the SHGs viz. 30 (76.93 per cent) had 10 members while 9 (23.07 per
cent) had between 10 to 20 members.

Age Profile of Members

Sr. No. Age category No. of respondents
1 18-25 32 (15.92)
2 25-35 101 (50.25)
3 35-45 44 (21.89)
4 Above 45 24 (11.94)
Total 201 (100.00)

Around half the respondents i.e. 101 (50.25 per cent) were between 25 and 35 years of age. A
sizeable number of respondents viz.24 (11.94 per cent) were from the age category above 45. This age
group was generally considered to be less productive both by Bank personnel and members.

Marital Status
Sr. No. Marital Status No. of respondents
1 Unmarried 02 (00.99)
2 Married 193 (96.02)
3 Widowed 06 (02.99)
Total 201 (100.00)

Out of the 199 married respondents, the maximum number of respondents viz. 97 (48.75 per cent) had
three to four children, 57 (28.64 per cent) had upto two children, 40 (20.10 per cent)
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Findings & suggestions

The following suggestions are offered to minimize the above

mentioned issues of SHGs:
1. Information about locally available materials and their varied uses should be disseminated
to SHGs. Proper encouragement and training should be given to them to make innovative
products by using these materials. In order to have a knowledge base about the availability of
materials, in panchayat levels, surveys can be conducted under the auspices of local
authorities.

2. In order to solve the various problems relating to marketing of SHGs, the state level
organisations should extend the activities throughout the state instead of limiting its
operations in a particular area.

3. Various SHGs functioning in a particular panchayat area can form a co-operative society.
This society may be entrusted with the task of marketing the products of different SHGs
under a common brand name. Further, the society can undertake sales promotion activities
and procure rare raw materials for the benefits of member SHGs.

4. Non-Government Organisations (NGOs) can play a significant role in empowering women

entrepreneurs by providing basic education, motivation training, and financial help and so on.

5. All the members in the SHGs may not have the same caliber and expertise. NGOs can
identify the inefficient members of the group and can impart proper training to them in order
to make them competent. For this purpose, short term training programmes can be arranged at
the panchayat level.

6. Frequent awareness camps can be organised by the Rural Development department

authorities to create awareness about the different schemes of assistance available to the
participants in the SHGs.

7. Lastly, arrangements may be made by the financial institutions for providing adequate
financial assistance to the SHGs strictly on the basis of their actual performance without any
discrimination of caste, politics etc.

In the emerging changes in the values and attitudes of the members of the SHGs are a clear
manifestation of socio-economic empowerment interventions yielding relatively quicker
results. each other and promote all-round development of the children, the women, the
households and the communities.
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Conclusion

SHG touched upon lifestyle of poor people lived in rural areas. The most important one
is, women empowerment, they begun with making a significant contribution in poverty
alleviation and empowerment of poor. The empowerment of poor people not only benefit
individual life or group of lives but also to the families and the communities as whose
incorporation with NABARD. Poor people meet their easy credits and financial services from
loans they got through SHG with the help of NABARD. The members are investing it in
various activities like Agriculture, candle making, animal husbandry, pickle making, daily
products etc. from these activities they have improved their social economic status.

Working towards this project help to analyze the condition of people living in rural areas
(poor’s lifestyle) and how various scheme are offered by the Government in order to improve
the financial status of the people which leads to economic development of nation.
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Bibliography

INTERNET SITES

www.nabard.com
www.shg.com
www.wikipedia.com

BOOK

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

National Bank for Agriculture and Rural Development(NABARD) – T. Balakrishnan
NABARD & its uses in agriculture – Vinod Gokhale