Economics Project For The Session:2019-20 Topic:Presentation On Self Help Groups

ECONOMICS PROJECT FOR THE SESSION:2019-20
TOPIC:PRESENTATION ON SELF HELP GROUPS
PRESENTED BY:
LAKSHYA,SHIV,MOUSAMI,PRAGATI,SUBASHMIT
GUIDED BY:MRS A.R. PANDA
(DEPT. OF COMMERCE)
SELF HELP GROUPS
WHAT IS A SELF HELP GROUP?
 SELF HELP GROUPS ARE INFORMAL ASSOCIATIONS OF PEOPLE WHO CHOOSE TO COME TOGETHER
TO FIND WAYS TO IMPROVE THEIR LIVING CONDITIONS.
 IT CAN BE DEFINED AS SELF GOVERNED,PEER CONTROLLED GROUP OF PEOPLE WITH SIMILAR SOCIO-
ECONOMIC BACKGROUND AND HAVING A DESIRE TO COLLECTIVELY PERFORM FOR A COMMON
PURPOSE.
 VILLAGES FACE NUMEROUS PROBLEMS RELATED TO POVERTY,ILLITERACY,LACK OF SKILLS,LACK OF
FORMAL CREDIT ETC. THESE PROBLEMS CANNOT BE TACKLED AT AN INDIVIDUAL LEVEL AND NEEDS
COLLECTIVE EFFORTS.
 THUS,SELF HELP GROUPS CAN BECOME A VEHICLE OF CHANGE FOR THE POOR AND
MARGINALISED.SHG RELY ONLY ON THE NOTION OF “SELF-HELP” TO ENCOURAGE SELF-EMPLOYMENT
AND POVERTY ALLEVIATION.
 EXAMPLES ARE: SIVASAKTHI, AROKIA ANAI, SENBAKAM ETC.
FUNCTIONS OF SELF HELP GROUPS
 IT LOOKS TO BUILD THE FUNCTIONAL CAPACITY OF THE POOR AND THE MARGINALISED IN THE FIELD OF
EMPLOYMENT AND INCOME GENERATING ACTIVITIES.
 IT RESOLVES CONFLICTS THROUGH COLLECTIVE LEADERSHIP AND MUTUAL DISCUSSION.
 IT PROVIDES COLLATERAL FREE LOANS WITH TERMS DECIDED BY THE GRIUP AT THE MARKET DRIVEN RATES.
 SUCH GROUPS WORK AS A COLLECTIVE GUARANTEE SYSTEM FOR MEMBERS WHO PROPOSE TO BORROW
FROM ORGANISED SOURCES. THE POOR COLLECT THEIR SAVINGS AND SAVE IT IN THE BANKS. IN RETURN
THEY RECEIVE EASY ACCESS TO LOANS WITH A SMALL RATE OF INTEREST TO START THEIR MICRO UNIT
ENTERPRISE.
 CONSEQUENTLY,SELF-HELP GROUPS HAVE EMERGED AS THE MOST EFFECTIVE MECHANISM FOR DELIVERY OF
MICROFINANCE SERVICES TO THE POOR.
NEED FOR SELF HELP GROUPS
 ONE OF THE MAIN REASONS FOR RURAL POVERTY IN OUR COUNTRY IS
LOW ACCESS TO CREDIT AND FINANCIAL SERVICES.
 A COMMITTEE UNDER THE CHAIRMANSHIP OF DR.C.RANGARAJAN TO
REPARE A COMPREHENSIVE REPORT ON FINANCIAL INCLUSION IN THE
COUNTRY IDENTIFIED FOUR MAJOR REASONS FOR LACK OF
FINANCIAL INCLUSION:
1. INABILITY TO PROVIDE COLLATERAL SECURITY.
2. POOR CREDIT AB SORPTION CAPACITY.
3. INADEQUATE REACH OF THE INSTITUITIONS,AND
4. WEAK COMMUNITY NETWORK.
 SHG HELP IN ACCESSING CREDIT TO THE POOR AND THUS,PLAY A
CRITICAL ROLE IN POVERTY ALLEVIATION. THEY ALSO EMPOWER
WOMEN AND GIVE THEM A GREATER VOICE IN THE SOCIETY.
 IT LEADS TO IMPROVED EDUCATION,HEALTCHCARE AND BETTER
FAMILY PLANNING.
GENESIS OF SELF HELP GROUPS
 THE FORMATION OF THE SELF HELP GROUPS IN INDIA CAN BE TRACED TO FORMATION OF SELF-
EMPLOYED WOMEN’S ASSOCIATION(SEWA) IN 1970.
 THE SHG BANK LINEAGE PROJECT LAUNCHED BY NABARD IN 1992 HAS BLOSSOMED INTO THE WORLD’S
LARGEST MICROFINANCE PROJECT.
 NABARD ALONGWITH THE RBI PERMITTED SHGs TO HAVE A SAVINGS ACCOUNT
IN BANKS FROM THE YEAR 1993.THIS ACTION GAVE A CONSIDERABLE BOOST TO THE
SHG MOVEMENT AND PAVED THE WAY FOR SHG-BANK LINKAGE PROGRAM.
 TODAY, STATE RURAL LIVELIHOOD MISSIONS(SRLMs) ARE OPERATIONAL IN 29 STATES
AND 5 UTs(except Delhi and Chandigarh).
NATIONAL RURAL LIVELIHOOD MISSION(NRLM) FACILITATED UNIVERSAL ACCESS TO THE
AFFORDABLE COST-EFFECTIVE RELIABLE FINANCIAL SERVICES TO THE POOR LIKE FINANCIAL
LITERACY,BANK ACCOUNT,SAVINGS,CREDIT,INSURANCE,REMITTANCE,PENSION AND COUNSELLING ON
FINANCIAL SERVICES.
BENEFITS OF SELF HELP GROUPS
1. SOCIAL INTEGRITY: SHGs ENCOURAGES COLLECTIVE EFFORTS FOR
COMBATING PRACTICES LIKE DOWRY,ALCOHOLISM ETC.
2. GENDER EQUALITY:SHGs EMPOWERS WOMEN AND INCULCATES
LEADERSHIP SKILL AMONG THEM.EMPOWERED WOMEN PARTICIPATE
MORE ACTIVELY IN GRAM SABHA AND ELECTIONS.
3. PRESSURE GROUPS:THEIR PARTICIPATION IN GOVERNANCE PROCESS
ENABLES THEM TO HIGHLIGHT ISSUES SUCH AS DOWRY,ALCOHOLISM,THE
MENACE OF OPEN DEFECATION,PRIMARY HEALTH CARE ETC AND IMPACT
POLICY DECISION.
4. VOICE TO MARGINALISED SECTION:MOST OF THE BENEFICIARIES OF
GOVERNMENT SCHEMES HAVE BEEN FROM WEAKER AND MARGINALISED
COMMUNITIES AND HENCE THEIR PARTICIPATION THROUGH SHGs
ENSURES SOCIAL JUSTICE.
5. FINANCIAL INCLUSION:PRIORITY SECTOR LENDING NORMS ASSURANCE
OF RETURNS INCENTIVIZE BANKS TO LEND TO SHGs. THE SHG-BANK
LINEAGE PROGRAMME PIONEERED BY NABARD HAS MADE ACCESS TO
CREDIT EASIER AND REDUCED THE DEPENDENCE ON TRADITIONAL MONEY
LENDERS AND OTHER NON-INSTITUTIONAL SOURCES.
OPPORTUNITIES TO SELF HELP GROUPS
 SHGs OFTEN APPEAR TO BE INSTRUMENTAL IN RURAL POVERTY ALLEVIATON. ECONOMIC EMPOWERMENT
THROUGH SHGs PROVIDES WOMEN THE CONFIDENCE FOR PARTICIPATION IN DECISION MAKING AFFAIRS AT
THE HOUSEHOLD LEVEL AS WELL AS THE COMMUNITY LEVEL.
 UN-UTILISED AND UNDERUTILISED RESOURCES OF THE COMMUNITY CAN BE MOBILISED EFFECTIVELY UNDER
DIFFERENT SHG INITIATIVES.
 LEADERS AND MEMBERS OF SUCCESSFUL SHGs BEAR THE POTENTIALITY TO ACT AS RESOURCE PERSONS FOR
DIFFERENT COMMUNITY DEVELOPMENT INITIATIVES.
 ACTIVE INVOLVEMENT IN DIFFERENT SHG INITIATIVE HELPS MEMBERS TO GROW LEADERSHIP SKILLS.
EVIDENCES ALSO SHOW THAT OFTEN WOMEN SHG LEADERS ARE CHOSEN AS POTENTIAL CANDIDATES FOR
PANCHAYAT PRADHANS OR REPRESENTATIVES TO PANCHAYATI RAJ INSTITUTION(PRI).
WEAKNESSES OF SELF HELP GROUPS
 MEMBERS OF A GROUP DO NOT COME NECESSARILY FROM THE POOREST FAMILIES.THOUGH THERE HAS
BEEN SOCIAL EMPOWERMENT OF THE POOR,THE ECONOMIC GAIN TO BRING ABOUT A QUALITATIVE
CHANGE IN THEIR LIFE HAS NOT BEEN SATISFACTORY.
 MANY OF THE ACTIVITIES UNDERTAKEN BY THE SHGs ARE STILL BASED ON PRIMITIVE SKILLS RELATED MOSTLY
TO PRIMARY SECTOR ENTERPRISES. WITH POOR VALUE ADDITION PER WORKER AND PREVALENCE OF
SUBSISTENCE LEVEL WAGES,SUCH ACTIVITIES OFTEN DO NOT LEAD TO ANY SUBSTANTIAL INCREASE IN THE
INCOME OF THE GROUP MEMBERS.
 THERE IS A LACK OF QUALIFIED RESOURCE PERSONNEL IN THE RURAL AREAS WHO COULD HELP IN THE SKILL
UPGRADATION OR ACQUISITION OF NEW SKILLS BY GROUP MEMBERS. FURTHER,INSTITUTIONAL
MECHANISMS FOR CAPACITY BUILDING AND SKILL TRAINING HAVE BEEN LACKING.
 POOR ACCOUNTING PRACTICES AND INCIDENTS OF MISAPPROPRIATION OF FUNDS.
 LACK OF RESOURCES AND MEANS TO MARKET THEIR GOODS.
 SHGs ARE HEAVILY DEPENDENT ON THEIR PROMOTER NGOs AND GOVERNMENT AGENCIES .THE
WITHDRAWAL OF SUPPORT OFTEN LEADS TO THEIR COLLAPSE.
CHALLENGES TO SELF HELP GROUPS
1. LACK OF KNOWLEDGE AND PROPER ORIENTATION AMONG SHG MEMBERS

TO TAKE UP SUITABLE AND PROFITABLE LIVELIHOOD OPTIONS.
2. PATRIARCHAL MINDSET:PRIMITIVE THINKING AND SOCIAL OBLIGATIONS ENCOURAGES WOMEN FROM
PARTICIPATING IN SHGs THUS LIMITING THEIR ECONOMIC AVENUES.
3. LACK OF RURAL BANKING FACILITIES:THERE ARE ABOUT 1.2 LAKH BANK BRANCHES AND OVER 6 LAKH
VILLAGES. MOREOVER,MANY PUBLIC SECTOR BANKS AND MICRO FINANCE INSTITUTIONS ARE
UNWILLING TO PROVIDE FINANCIAL SERVICES TO THE POOR AS THE COST OF SERVICING REMAINS
HIGH.
4. SUSTAINABILITY AND THE QUALITY OF OPERATIONSOF THE SHGs HAVE BEEN A MATTER OF
CONSIDERABLE DEBATE.
5. NO SECURITY:THE SHGs WORK ON MUTUAL TRUST AND CONFIDENCE OF THE MEMBERS. THE DEPOSITS
OF THE SHGs ARE NOT SECURED OR SAFE.
6. ONLY A MINORITY OF THE SELF HELP GROUPS ARE ABLE TO RAISE THEMSELVES FROM A LEVEL OF
MICRO-FINANCE TO THAT OF MICRO-ENTREPRENEURSHIP.
MEASURES TO MAKE SHGs EFFECTIVE
 THE GOVERNMENT SHOULD PLAY THE ROLE OF A FACILITATOR AND PROMOTER ,CREATE A SUPPORTIVE
ENVIRONMENT FOR THE GROWTH AND DEVELOPMENT OF THE SHG MOVEMENT.
 EXPANDING SHG MOVEMENT TO CREDIT DEFICIENT AREAS OF THE COUNTRY-SUCH AS MADHYA
PRADESH,RAJASTHAN,STATES OF THE NORTH-EAST.
 RAPID EXPANSION OF FINANCIAL INFRASTRUCTURE(INCLUDING THAT OF NABARD) AND BY ADOPTING
EXTENSIVE IT ENABLED COMMUNICATION AND CAPACITY BUILDING MEASURED IN THESE STATES.
 EXTENSION OF SELF HELP GROUPS TO URBAN/PERI-URBAN AREAS:EFFORTS SHOULD BE MADE TO INCREASE
INCOME GENERATION ABILITIES OF THE URBAN POOR AS THERE HAS BEEN A RAPID RISE IN URBANISATION
AND MANY PEOPLE REMAIN FINANCIALLY EXCLUDED.
 POSITIVE ATTITUDE:GOVERNMENT FUNCTIONARIES SHOULD TREAT THE POOR AND MARGINALISED AS VIABLE
AND RESPONSIBLE CUSTOMERS AND AS POSSIBLE ENTREPRENEURS.
 NEED BASED APPROACH:COMMERCIAL BANKS AND NABARD IN COLLABORATION WITH THE STATE
GOVERNMENT NEED TO CONTINUOUSLY INNOVATE AND DESIGN NEW FINANCIAL PRODUCTS FOR THESE
GROUPS.
CASE STUDIES
 KUDUMBASHREE IN KERALA
IT WAS LAUNCHED IN KERALA IN 1998 TO WIPE OUT ABSOLUTE POVERTY THROUGH COMMUNITY
ACTION. IT IS THE LARGEST WOMEN EMPOWERING PROJECT IN THE COUNTRY. IT HAS THREE
COMPONENTS I.E. MICROCREDIT,ENTREPRENEURSHIP AND EMPOWERMENT.IT HAS THREE-TIER
STRUCTURE-NEIGHBOURHOOD GROUPS(SHGs),AREA DEVELOPMENT SOCIETY(15-20 SHGs) AND
COMMUNITY DEVELOPMENT SOCIETY(FEDERATION OF ALL GROUPS).KUDUMBASHREE IS A
GOVERNMENT AGENCY THAT HAS A BUDGET AND STAFF PAID BY THE GOVERNMENT. THE THREE TIRES
ARE ALSO MANAGED BY UNPAID VOLUNTEERS.
 MAHILA ARTHIK VIKAS MAHAMANDAL(MAVIM) IN MAHARASHTRA
SHGs IN MAHARASHTRA WERE UNABLE TO COPE WITH THE GROWING VOLUME AND FINANCIAL
TRANSACTIONS AND NEEDED PROFESSIONAL HELP. COMMUNITY MANAGED RESOURCE
CENTRE(CMRC) UNDER MAVIM WAS LAUNCHED TO PROVIDE FINANCIAL AND LIVELIHOOD SERVICES
TO SHGs. CMRC IS SELF-SUSTAINING AND PROVIDES NEED-BASED SERVICES.
THANK YOU FOR WATCHING!!
HOPE IT WAS INFORMATIVE!!!!

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ECONOMICS PROJECT FOR THE SESSION:2019-20

TOPIC:PRESENTATION ON SELF HELP GROUPS

1. LACK OF KNOWLEDGE AND PROPER ORIENTATION AMONG SHG MEMBERS

HOPE IT WAS INFORMATIVE!!!!

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