SHGs and INDIA

India brims with Self Help Groups (SHGs). The National Bank of Agriculture and Rural Development (NABARD) estimates that by March 2006 over 33 million women have been linked to banks for financial services through 2.2 million SHGs. 'Linkage' is defined bym NABARD as taking a loan from a bank, although banks in fact first become linked to SHGs by taking their deposits. Growth has been spectacular in the past couple of years: 'over 400 women per hour' according to the NABARD web-site. The hourly rate is actually more than this, with an increase in 2006 of 620,000 SHGs or over 9 million women SHG members.
Growth has been strongest in the southern region where SHG bank linkage first began, with three states (Andhra Pradesh, Tamil Nadu, and Karnataka) the top three in the country. The south accounts for 54% of SHGs (half of this in Andhra Pradesh alone) and 75% of bank credit. The rest of the country is beginning to catch up, at least in terms of SHG numbers, although the share of credit remains at one-fourth, both cumulative and current

SHGs for what?

Objectives in promoting SHGs differ. Is it ‘microfinance’? Is it ‘microfinance plus’? Is there a tension (even a trade-off?) between the two? Even with social objectives, ‘Self-Help’ has a financial base (depositing and managing savings, lending and borrowing) and the base has to be right, with effective and transparent management and the guidance to do this

SHGs for whom?

Women from different social and economic levels are joining SHGs, including the poor, and some very poor. This process continues as the numbers grow. However, the barriers to entry for the poor are high – not only do they have lower incomes (by definition), but their incomes are usually more variable. To reduce barriers for the poor means allowing more flexibility to cater to varying and seasonal cash flows, for example allowing varying deposit amounts and frequency, perhaps with a specified annual minimum.
The same principle applies to access to credit and repayment, again within specified minimum norms. (Though both will have to be matched by good record keeping). In this aspect, and in others too (accounting, decision making, social action) it is likely that the poorer the women (or some of the women) in an SHG, the more careful and sustained promotion and guidance needs to be.
THE SOCIAL ROLE OF SHGs

SHGs and politics

There are apparent synergies between SHGs and local politics since through membership of SHGs, or SHG clusters and federations, village women can gain experience of relevant processes (regular meetings, taking decisions, allocating money). They also become more ‘visible’ in the village, which is important for campaigning.
Social harmony
Indian society is split by a hierarchical caste system that has traditionally discriminated against those at the bottom – the Scheduled Castes – as well as those outside it, for example the Scheduled Tribes. Within broad caste categories too there are divisions.
Social justice
SHGs seem uniquely placed to support their members on issues of social justice affecting women. Nevertheless, we did not find that SHGs are dealing regularly with issues of social justice. Nor did many groups report such actions: 12% of sample SHGs (with some groups mobilising together on single issues) had taken up issues such as domestic and sexual violence, bigamy, and a few cases of dowry death, prevention of child marriage, support for separated women to remarry.
SHGs and community action
Women in SHGs can work together to address issues that affect not only their own members, but others in the larger community.