Upscaling

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Up-scaling Deepening SHG movement Issues
Challenges
APMAS
Presentation by CS Reddy, creddy_at_apmas.org 31st
October 2008, NABARD - CMF Workshop
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About APMAS

• Vision
• Sustainable Women Self Help Movement in India
• A public society began work in July 2001
• A national level Resource Institution for
  strengthening SHGs SHG Federations
• Areas of work include capacity building, rating,
  livelihood promotion and research advocacy.
• Services provided for a fee.
• Focus on SHPIs and SHG Federations

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Evolution of SHG movement in India

• Phase I NGOs promote women SHGs as an
  alternative to mainstream financial institutions
  to reach un-reached segments of the society.
• Phase II NABARD takes the lead in partnering
  with NGOs, particularly MYRADA, to pilot the
  well-known SHG-bank linkage model.
• Phase III State Governments, particularly in the
  South, take a proactive role in the promotion of
  SHGs in a big way, by way of revolving loan funds
  and other support.
• Phase IV SHG-Bank linkage reaches the scale of
  over a million bank-linked SHGs.
• Phase V SHG federations emerge to sustain the
  SHG movement and to provide value-added services.
• Phase VI SHGs and SHG federations gained
  widespread recognition to be partners of various
  mainstream agencies such as financial
  institutions, corporate sector, and government.

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India SHG movement

• SHG model for poverty reduction women
  empowerment
• More than 50 lakh SHGs in the country
  Quality???
• More than 35 lakh have loan outstanding with
  banks
• SHG Bank linkage - loan outstanding approx.
  Rs.15,000 crores. Still problems to get bank
  loans in many states
• Savings of SHGs in banks approx. Rs.4,000 crore
• More than 100,000 SHG federations, nascent??

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India SHG movement

• Total SHGs in the country could be 1,00,00,000
  (future)
• Total SHG federations could be 400,000 (future)
• Promotional funds needed to achieve
  universalization of SHGs approx Rs.10,000 crores?
  GOI, NABARD, States
• National Council for strengthening SHG movement
  established National SHG fed.
• MFDEF Financial Inclusion fund to strengthen
  the SHG movement SHGs seen as a strategy for
  financial inclusion
• Capacities of the SHPIs?
• Supportive policy regulatory environment???

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SHG Bank linkage Impact (NCEAR Study)

• The bulk of SHGs, i.e. 80 per cent of SHGs have
  only women members.
• Distribution of the SHG members by caste
  indicates that SCs/STs and OBCs account for 22.3
  percent of total SHG members.
• The percentage of SHGs that only have SC/ST
  members is 21 per cent.
• More than 60 per cent of SHGs consist of members
  belonging to BPL families.
• Changes in net household income between pre-SHG
  and post-SHG registered a significant growth per
  year at 6.1 per cent.
• Across different income activities of households,
  livestock registered highest growth at 11.2 per
  cent.

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SHG Bank linkage Impact (NCEAR Study)

• The annual growth rate of per household
  consumption expenditure on food and non-food
  items recorded 5.1 per cent and 5.4 percent
  respectively.
• Per household annual expenditure on education and
  health recorded 5.6 per cent and 5.5 per cent
  growth respectively.
• Net change in the value of consumer durable
  assets per household was Rs. 4,329 between
  pre-SHG and post-SHG periods and the annual
  growth of assets recorded a high growth between
  the two periods at 9.9 per cent.
• The average level of savings (financial and
  physical savings) per households registered 14.2
  per cent annual growth between base level and
  2006.
• On an average, per household borrowed an amount
  of Rs. 14,640 in the post-SHG period compared to
  Rs. 5,384 in the pre-SHG situation. The average
  loan amount per household grew at an annual rate
  of 20.5 per cent between the pre-SHG and the
  post-SHG periods.

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SHG Bank linkage Impact (NCEAR Study)

• About 93 per cent of households reported that
  loans were taken in the post-SHG situation as
  compared to that of 46.5 per cent.
• On the issue of repayment of loan, the findings
  show 96.4 per cent of households reported
  regularity in repayments of loans.
• The share of households living below the poverty
  line reduced from 58.3 per cent in the pre-SHG
  period to 33 per cent in the post-SHG situation.
• About 92 per cent of households reported that the
  social empowerment of women had increased after
  attaining membership in SHGs over a period of
  time.
• More than 70 per cent of women respondents
  reported improvements or even significant
  improvements in their ability to face health
  related problems and financial crisis.
• More than 60 per cent of the households indicated
  that there is an increase in the ownership of
  productive assets in post-SHG situation as
  compared pre-SHGs situation.

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SHG Bank linkage Impact (NCEAR Study)

• In terms of control over money, about 21.3 per
  cent of the households reported a significant
  improvement in control over money with respect to
  buying of consumer durable assets.
• 27 per cent reported increased decision-making
  and control over expenditure on childrens
  education.
• The findings show 22.5 per cent of women SHG
  members in the households had taken decision in
  the post-SHG period as compared to 9.1 per cent
  in the pre-SHG period with respect to childrens
  education.
• Participation of public sphere show that 49.4 per
  cent of households had approached government
  officials to solve problems in the post-SHG
  period as compared to 13.5 per cent in the
  pre-SHG period.
• The findings of SHPI suggest that the average
  cost of promotion and maintenance per SHG
  incurred by a bank SHPI is lower than that by
  non-bank SHPIs.

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SHG FEDERATIONS IN INDIA
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GRADES APMAS Federation Rating Tool
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Emerging practices

• SHG federations by the virtue of their inherent
  strength and credibility are able to nurture some
  of the best practices in the process of their
  evolution.
• Facilitating bank linkage to SHGs
• Matured federations serving as a model for
  others.
• SHG federations effectively manage insurance,
  distribution of pensions
• SHG Federations are able to offer services to
  their members for a fee
• Responding to natural disasters
• Concerned about sustainability
• Mobilize funds to meet their cost, at least
  partially
• Performing roles such as SHG monitoring, social
  audit

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Is AP Model Replicable?

• Almost 15 years of sustained effort with highest
  levels of political will bureaucratic
  commitment
• It is estimated that Rs.25,000/SHG has been the
  investment made by GoAP over a 10 year period.
• Proactive role sustained effort of NABARD the
  Banks (thru SLBC) in the state to support SHG
  Bank linkage
• Almost 80 SHGs are bank linked. Majority of them
  got repeat loans from banks.
• Interest subsidy (only 3 pa to SHG) to promote
  timely repayment to banks.
• A very strong extensive support mechanism to
  facilitate bank linkage to ensure repayment
• In 2007-08, in AP alone Rs.5,880 crores bank loan
  to SHGs. In 2008-09 it is expected to be over
  10,000 crores.
• More than 50,000 SHGs got loans under Total
  Financial Inclusion to the extent of Rs.3 to 5
  lakh per SHG

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Major Issues in SHG movement

• SHG Bank linkage in most states its not
  happening
• Quality of SHGs will not improve unless they get
  a bank loan after they have functioned for 6-12
  months
• Promotional funds to promote quality SHGs?
• Capacity of the Govt./NGOs promoting SHGs?
• SGSY implementation not synchronized with SHG
  model
• Livelihood promotion support for matured SHGs????
• Women Empowerment? SHGs more engaged in credit
  mgt
• Many NGOs which traditionally promoted SHGs are
  transforming into MicroFinance Organizations
  (MFOs)

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Open for discussion Thanks

• For further details contact
• APMAS
• Plot No. 20, Rao Raju Colony
• Road No-2, Banjara Hills, Hyderabad
• Ph 91-40-23547952/27 Fax [phone]
• Web www.apmas.org www.shggateway.in
• email info_at_apmas.org