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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. Backdrop.

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Self Help Groups, Poverty Alleviation and Empowerment

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

  2. Backdrop • 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 Banks and Insurance directly dealing with SHGs. 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) Contd… • 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.

  6. 3. SAPAP model (International Model) Contd… • 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.  • This is also a micro finance plus model.

  7. GROUND REALITIES: CERTAIN IMPORTANT FEATURES 1. SHG and Caste According to a recent sample study, 80% of SHGs are single caste. 20% of groups do cross caste hierarchies.

  8. 2. SHGs & Poor (Source: Self help groups in India: a study of the lights and shades, M Harper, 2006)

  9. 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 • 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 • 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 • 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

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