NATIONAL WORKSHOP ON SHG FEDERATIONS

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NATIONAL WORKSHOP ON SHG FEDERATIONS

• SYNTHESIS

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National Workshop Objectives

• Critical review of experiences in promoting SHG
  Federations across India.
• Draw conclusions and make recommendations (best
  practice) to promote sustainable
  member-designed, member-owned and member-managed
  SHG Federations

3
Inaugural Session

• Collaborative effort to organize the National
  Workshop appreciated by all the speakers.
• Shashi did a great job in raising the issues. All
  the speakers highly appreciated the issues raised
  in the discussion paper
• The National Workshop is timely and hopeful that
  the conclusions and recommendations will provide
  direction to all SHPIs in the country.
• Government of AP is with a open mind on issues
  related to why, what, where, when how of
  federations.
• To find answers to the issues raised in the
  paper, a mechanism need to be set up to work
  beyond the two-day workshop.
• Promotion of Federations should be a
  process-oriented approach, based on the felt need
  and should be a value add tier, without
  duplicating or competing with their primaries.

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Discussion Paper Presentation by Ms. Shashi
Rajagopalan

• Federations are useful only to the extent that
  they service the ultimate member

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Discussion Paper Presentation

• Federations are necessary, if they add value and
  not compete/conflict with SHGs.
• Protect savings of women members.
• Feds for audit, supervision, training, insurance,
  policy framing benefit all the members.
• Feds after strong primaries are in place.
• Need to build members stake in the institution.
• Feds survival to be dependent on member service
  fees.
• Institutions of the poor many not be able to
  manage efficiently several agendas (financial
  non-financial)
• Leadership is critical for the effectiveness
  sustainability.
• Accounting systems are critical (bookkeeping
  MIS).
• Training of Board ensuring reward punishment
  exist.
• SHPIs Competence, costs, enabling, positioning
  and replication

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Sa-Dhan SHG Federation Study Findings by Achala
of Sa-Dhan, New Delhi

• Covered 27 Feds. (organizations) across India.
• Dilemma in balancing financial social
  financial needs stricter system oriented,
  social flexible.
• 3-tier Feds most common, 5-tier also exist.
• External locus Feds financial large outreach.
• Federations with finance internal locus need
  significant CB.
• Finance plus internal locus significant CB
  can develop into true institutions of the poor.
• Non-financial federations are likely to take up
  financial services.
• SHG members are able to relate to Federations
  closer to them.
• Capacity role of Promoting Institution is
  critical.
• Costs of facilitating SHG Federations is massive
  need funds.
• Banks should lend to SHG Federations.

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Theme I Process of Promoting Federations

• Chairpersons
• Dr. Shankar Datta, IGS of BASIX, Hyd
• Mrs. Vijayalakshmi Das, FWWB, Ahemdabad

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VELUGU A unique initiative

• Project design emerged drawing lessons from
  all existing anti-poverty programs

• Key Processes
• Institution Building

• Social Capital (developing community activists
  and bare-foot professionals responsible to the
  community)

• Livelihood Expansion
• Increase in incomes and employment, decrease in
  expenditure, costs and risks

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Velugu Project Govt. of AP by Mr. Vengal
Reddy, PD of RR dist

• Built on the experience UNDPs SAPAP implemented
  in 20 mandals SHG VO Mandal Federation
• Velugu in implementation in 820 mandals across
  AP.
• Society for Elimination of Rural Poverty is the
  implementing agency with World Bank funding
  focus poorest of the poor.
• Key activities of the project
• Strengthening existing SHGs MACS
• Form new SHGs of the poorest of the poor.
• Promoting village mandal federations.
• Promoting livelihoods through CIF bank linkage
• Address other major problems (child labour,
  disability, health and other social issues)
• Velugu Project has MoU with VO and MS for
  implementing its activities all staff placed
  with the MS.
• Target oriented approach to promote a large
  number of Feds.

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Chitanya Promoted GMSSBy Ms. Sudha Khotari, Pune

• Promoted Grameen Mahila Swayamsiddha Sangha
  (GMSS) through an evolutionary process started
  with 14 SHGs.
• 203 SHGs, 18 clusters, 3383 members with Rs. 63
  lakhs cumulative lending by Federation to SHGs.
• 2-tier to 3-tier SHG Cluster Federations.
• Staff appointed by the Federations from SHG
  members.
• A variety of savings products, fewer loan
  products.
• Insurance service introduced.
• Federation also provides non-financial services.
• Promoting Agency played a facilitating, CB,
  linkages and mentoring services responsive to
  the SHGs.
• Federations has strong linkages with various
  government departments and programs.
• Financial sustainability not to override the
  self-managed womens institution

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Sarvodaya Nano Finance LimitedBy Mr. Sowmitri,
CEO of SNFL

• ASSEFA promoted SHGs under IFAD project
• SHGs Federated at Block level into SMBTs.
• MBTs are private trusts with provision to invest
  in corporate entities and borrow from Fin.
  Institutions.
• SMBTs acquired shares in SNFL.
• SMBTs are autonomous, they are members in SNFL
  and are also borrowers. SNFL sets the broad
  policy guidelines.
• SNFL takes care of the financial and CB needs of
  MBTs.
• Considering the limitations of SMBTs in raising
  external borrowings, SNFL to play that role.
• SNFL borrowing from SFMC of SIDBI.
• SNFL is managed by professionals.
• Reach 74,601 members, 4,065 SHGs, 27 MBTs in 10
  districts of Tamil Nadu

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Process of Promoting Federations

• Gist of the Small Group Discussions

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Group Work Output

• Four groups of participants from promoters
  donors and one group of representatives of SHG
  Federations.
• All the 5 groups felt that SHG Federations are
  necessary as long as they add value not compete
  or conflict.
• SHG Federations should do training, audit,
  linkages, supplement financial needs service
  members.
• SHG Federation reps felt that Federations should
  work for the overall development of women and
  ensure that SHGs are functioning well and engage
  in problem-solving.
• Unresolved issues
• Financial or social or both may be federation
  should decide
• Should federation promote new SHGs of poor?
• Should SHG promote federation or federation
  promote SHGs?
• Multi-tiered institution.
• Book keeping?
• Protection of members savings
• The representatives of Federations felt that
  Velugu should build on existing federations.

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Legal Options for SHG Federations By Mr. V.
Nagarajan, New Delhi

• Mr. Nagarajan made a highly informative
  educative presentation
• Three broad categories not-for-profit, mutual
  benefit for-profit.
• Possible legal forms for the SHG Federations are
• MACS act existing in several states.
• Charitable Trust (also tax paying charitable
  trust)
• Mutual Benefit Trusts
• Societies
• Combination of MACS for profit company (NBFC)
• Section 25 company
• There is need for greater awareness among the
  promoting agencies peoples organization
  regarding legal aspects.
• Combinations and permutations of legal forms
  could be used to maximize financial flows to the
  poor women.
• To mobilize resources appropriate legal form is
  necessary.

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Feedback day I

• Representatives of SHG Federations were at a loss
  as the discussions were in English, no
  translation.
• Small Groups were too large mini-workshops!
• Very limited time for Small Group Discussion, the
  output could not be qualitative.
• Very limited time for discussion in the plenary.
• The real issues still not being addressed.
• The answers are still not coming, can we have a
  clear follow up plan.
• Overall, a good effort a good workshop.

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Theme II Resource Mobilization for Federations

• Chairpersons
• Mr. Vijay Mahajan, MD of BASIX, Hyd
• Mr. Kishan Jindal, DGM, MCID, NABARD

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Kudumbhashree Kerala By Mr. Ramanunne, Kerala

• Started as an urban pilot with support unicef
  NABARD
• Implemented by Kerala State Poverty Eradication
  Mission, GoK.
• The model NHC ADS CDS (both in urban rural
  areas).
• The emphasis is on convergence with all the
  government departments and NGOs.
• Implementation through the local bodies.
• Emphasis on micro-enterprises (group
  enterprises).
• Coordination by the Kudumbhashree Head Office and
  through the District Mission Coordinators.
• Significant investments made in building the
  capacities of the ADS and CDS.
• Bookkeeping MIS systems established.

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Community Based OrganisationA 3 tier CBO

• Organizing the Poor

Rural
Total
Urban
Neighbourhood Groups (NHG) at Grass roots
118978
7915
111063
Area Development Society (ADS) at Ward Level
13039
623
13662
Community Development Society (CDS)At Local
Self-Government level
58
991
1049
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Working Group Recommendations on SHG Federations
financing by Mr. Sitaramchandra, NABARD

• WG constituted by GoAP with NABARD as convenor.
  Bankers, NGOs, Government, APMAS members.
• Guidelines already issued by SLBC.
• SHG as building block.
• SHG Federation primarily involved in financial
  activity.
• Model byelaws incorporate best practice.
• 2 years of track record for linkage.
• Legal compliance as per MACS act.
• Several performance benchmarks established.
• Several financing lending options proposed.
• Byelaws for small federations (Village or
  Cluster) large federations (mandal level)
  however, 2-tier structure.
• Based on the guidelines, GO is likely to be
  issued soon.

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Theme II Small Group Output

• Emphasis on accurate timely bookkeeping system
  standard books of accounts across the state.
• Transparency audit, MIS, monitoring
• Protecting members savings at SHG level is
  critical savings to stay at SHG, regular
  meetings, follow prudential norms, pay interest
  on savings, allocate surplus.
• Clear articulation of roles responsibilities of
  federation SHPI
• Sustainability user-charges, deepening,
  outreach, lower operational costs, ownership of
  members.
• Representatives of women Federations gave a
  detailed presentation on what they expect from
  promoters during various stages of SHG Federation
  evolution.
• Federations representations proposed a cost
  sharing arrangement between promoter and SHGs.

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Theme III Governance

• Chairpersons
• Mrs. Sudha Kothari, Chaitanya, Pune
• Mr. Narender Bedi, YIP, AP

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MAVIM Presentation Ms. MF. Thekkekara IAS,
Managing Director, Mumbai

• Women Development Corporation, Govt. Maharastra
• IFAD funded MRCP during 94-02.
• SHG Village Level Committee SH Cluster
  Federation.
• Collaboration with other govt. departments
  NGOs. Role of Bankers critical for financial
  flows.
• Achievements 122 cluster federations, 10,163
  SHGs and 1,18,735 members.
• Future plans are being developed to promote large
  number of SHG Federations.

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CASHE Project of CARE by Mr. Nagendra Acharya,
Project Manager, CARE Orissa

• Built on the pilot project CARE implemented
  during 92-96 in AP, Orissa, Bihar
• A DFID funded project in AP, Orissa West Bengal
  for a 7 yr period.
• 3-tier strategy intensive, extensive and
  advocacy.
• Working with 18 NGO partners reaching almost
  466,694 women.
• Partner NGOs facilitating member-owned
  member-managed organizations SHGs, cluster
  Federations.
• Several types of collaborations and partnerships
  in operation at State National level.
• Innovation fund for promoting development of new
  products and innovative methodologies.

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Governance APMAS presentation by LB Prakash,
APMAS

• Developed a quality assessment system called
  GRADES for assessing SHG Federations.
• Several assessments of SHG Federations conducted
  in Andhra Pradesh.
• Governance systems are two serious issues in
  assessed federations
• Limited board training
• Legal compliance
• Promoter role
• Systems are inadequate and not up-to-date

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In conclusion

• Diverse experiences have been shared.
• Issues related to governance, resource
  mobilization and process of promoting federations
  have been debated, to a limited extent.
• Women representatives have made significant
  contributions to develop greater clarity.
• Several questions raised in the paper have been
  addressed, still there are others to be answered.
• Governance related issues require more debate.
• May be a core group from the organizers of the
  National workshop need to take this forward.
• National Workshop report and a best practice
  document need to be brought out at the earliest.
• Thank You