1. Self Help Groups, Poverty Alleviation and Empowerment Self Help Groups, Poverty Alleviation and Empowerment Presented by Dr. K. Lalita YUGANTAR At the Planning Commissions Civil Society Window on Self Help Groups 7 th November 2006 New Delhi yugantar@vsnl.net & lalitarajan@gmail.com

2. Backdrop  Environment for ensuring ‘spread effect of growth’ emphasized during 90s.  Environment for ensuring ‘spread effect of growth’ emphasized during 90s.  Concept of women’s groups (Sangams) existed from 80s. NGOs drew on experience of Left movements and Anti-arrack movement.  Andhra Pradesh adopted DWCRA (development of women and children in rural areas) model for APDPIP and APRPRP  Organising women around thrift and credit services is a very effective method for alleviating poverty and empowering women

3. Delivery mechanisms Growth of Microfinance sector: Four models: 1. Community owned and managed (CDF, Sanghatita, ASP, Roshan Vikas) 2. Financial Intermediary Model ( an arm of retail banking and insurance sector) like BASIX, SKS, SPANDANA, SWAS, SHARE 3. Banks and Insurance directly dealing with SHGs. 4. DWACRA + SAPAP [govt models]

4. NUANCES OF DIFFERENT STRUCTURES 1.Financial Intermediary Model  Not targeted at a particular segment  Any adult woman can become member of the group.  Members save any amount from Rs 20 to Rs 200 or more.  2% per month (24 % p.a.)interest is charged on loans. Funds borrowed from banks/FIs

5. 2. DWCRA Model (Government Model)  SHGs of DWCRA are federated into MACs : Training in leadership, attitudinal changes, skills for income generation.  Lump sum grant of Rs. 25000: IRDP subsidy and bank loans can be accessed.  Groups save, inter-lend to meet needs of members.  Program for services (health, education, child care, nutrition, water and sanitation); other govt. rural development programmes.  Linkages with govt. line departments; financial institutions; corporates. Economic and social empowerment is the bottom line. Economic and social empowerment is the bottom line. Contd…

6. 3. SAPAP model (International Model) 3. SAPAP model (International Model)  1995, SAPAP pilot in 20 poor mandals of AP.  Social mobilization as mechanism to form SHGs.  SAPAP Empowerment model’s 3 components: social mobilization, capital formation, capacity building of the poor  SAPAP implemented in collaboration with local NGOs and state government.  SAPAP implemented in collaboration with local NGOs and state government.  This is also a micro finance plus model. Contd…

7. TotalAPKarnatakaOrissaRajasthan N SHGs Single caste Mixed caste ST/SC/ Minorities BC/OC21466%34%7%7%6063%37%2%23%5169%31% 4% 4%5074%26%6%5360%40%15%4% According to a recent sample study, 80% of SHGs are single caste. 20% of groups do cross caste hierarchies. 1. SHG and CasteNGOGovtBank N SHGs Single caste Mixed caste ST/SC/ Minorities BC/OC13761%39%9%5%4969%31%2%14%2886%14%7% GROUND REALITIES: CERTAIN IMPORTANT FEATURES

8. TotalAPKarnatakaOrissaRajasthan % of poor in SHGs SCST Women headed HHs 51%30%25%11%53%7%13%13%61%45%10%16%58%41%35%14%34%27%41%3% (Source: Self help groups in India: a study of the lights and shades, M Harper, 2006) 2. SHGs & Poor

9. Benefits of SHG models Benefits of SHG models  SHG movement created an institutional framework.  Participation of women in SHGs improved their access to credit.  Culture of thrift and disciplined loan repayment  Winning confidence of mainstream financial sector as credit worthy institutions.  Interest rates in the informal credit sector decreased.  Consumption needs and certain production needs met.

10. Problems Problems  Low levels of credit absorption, low skill base and low asset base.  Interior and tribal villages have not benefited.  SCs and women headed households have not benefited.  Pressures by govt to push sterilization and birth control methods.

11. Emerging Challenges Emerging Challenges  Two major factors threatening sustainability:  A) Damage to ‘credit discipline’ because of high interest rates and political reactions to incidents of coercion  B) High handed recovery of loans  C) Lack of skills/experience for advisory/technical support services to promote livelihoods and build market intervention  Subvertion of P.R.I.s and bitter inter-department rivalry  Politics of patronage  Internalised notions of vulnerability of women affecting their confidence and performance.  Social norms inhibiting women from articulating personal needs.  Women experience Invisible barriers to entry in economic & political spheres.

12. Gender Perspective of Empowerment Gender Perspective of Empowerment  No men in SHGs  Resistance to women’s entry in local market and political structures  Family resistance to changing power relations  Continuing need for improving quality of life: education, literacy, health, child care, household chores

13. Empowerment through livelihood development: Problems  Microfinance programmes assume men and women face same challenges.  Management of household subsistence needs  Adding to household income stream – (‘work efficiency’; skills for home based activity etc,)  Managing a small business  Scaling up the small business