Sustainability of SHGs

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Sustainability of SHGs

• V.K.Padmavathi
• Chief Executive
• DHAN Kalanjiam Foundation

2
Sustainability

• Long term continuation of an institution.
• Owned, controlled and managed by People.
• Appropriate systems and processes.
• Scaling up for sustenance
• Established partnership with Mainstream
• Multiple products and services responding to
  needs
• Meeting its own costs.
• Fulfilling the developmental needs of the
  members.
• Identity

3
Dimensions of Sustainability

• Institutional
• - Shared purpose, structure, strategy, staff,
  systems, style and shared values
• Financial
• - Deepening and scaling up financial services
  (saving, credit and insurance)
• - Ability to mobilise resources for self growth
• Developmental
• -Achieving poverty reduction
• -Enhancing quality of life

4
Institutional Sustainability

• Transformation of Group to Institution.
• Building an Institutional value framework.
• Capacity Building in response to growing needs.
• Dynamic systems and processes
• Endo system for building sustainable ownership

5
Challenges

• Social mobilisation Does poverty matter?
• Drift from social cause to commercialization
• Are the members clientele or owners ?
• Multiple membership, clarity of promoters
• Does Win-Win equilibrium between banks and SHGs
  exist?
• SHGs grow. Does the capacity of governance grow
  accordingly?
• Political Mileage without considering
  sustainability.
• Growth without systems.
• Legal framework Is regulation external or
  internal?

6
Financial sustainabilty

• Savings Safety vs. liquidity
• Savings vs. loan ratio
• Credit vs. package of products
• How Efficient are the SHGs in leveraging external
  loan funds?
• Effective interest rate Are loans from SHGs
  really affordable?
• Gestation period for financial self sufficiency
• Increasing costs Vs Services
• Promotional costs vs. contexts
• Are subsidies boon or bane?
• Inadequacy in Financial literacy

7
Developmental Sustainability

• Reducing risks and vulnerabilities
• Deepening Livelihoods
• Deepening Civic interventions.
• Forward and Backward linkages.
• Reaching the left out poor.
• Ensuring poor getting entitlements.
• Nurturing Democratic practices
• Transforming into civil society.

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• Thanks