Economic Affairs Vol. 56 No.

2 June 2011 (Page 107-116)

A Study of SHG-Microfinance Initiative in Purbo Midnapore District of West Bengal

A Study of SHG-Microfinance Initiative in Purbo Midnapore District of West Bengal

Sudhin Kumar Bera

Assistant Professor, Department of Commerce, Raja Peary Mohan College Uttarpara, Hooghly, West Bengal, India Email: berasudhin@yahoo.in Receipt on 04-05-2011 Accepted 10-06-2011

Abstract Providing easy finance and micro credit has always been the primary objective of Micro Finance Linkages. Micro finance in the form of SHG Linkage model has been able to inspire hope in the lives of thousands of rural people, women in particular and enable them to contribute to their families well being through savings and borrowings. Microfinance influences the quality of life and is considered a powerful tool for positive socio economic changes in modern society. It is well known to us that West Bengal is one of the important states in the Eastern Region in respect of SHG-Bank linkage programme. During 2009-10, the number of SHG formed in W.B. under SGSY scheme was 35123, which are second highest among all the states of India. Further, the erstwhile district of Midnapore was divided into Purbo Midnapore and Paschim Midnapore on 1st January 2002. The present study is a modest attempt to analyze the performance of microfinance activities and to explain the socio-economic impact of microfinance on the SHG members of Purba Midnapore District based on primary data collected from two villages taking from two different blocks. The objective of the study is to identify and assess the socio economic condition of the member beneficiaries during pre and post SHG situation and to examine the utilization of microfinance services provided by the SHGs on income and employment levels of the beneficiaries. The study was conducted by canvassing structured questionnaire to 88 sample households taken from 20 SHGs through random sampling method and results are interpreted by tabular analysis. The study identified the remarkable improvement in the income level and employment generation by the member beneficiaries and found significant increase in savings of the member households. At the end, the study highlighted the issues concerning the functioning of SHG groups. Keywords: Microfinance, Beneficary

Introduction Financial inclusiveness and providing easy access to credit has always been the primary objective of Government of India. Several models have been tried to make this successful and Self-Help Group (SHG) movement is the most successful one. The success of SelfHelp Group movement was well recognized and it has proved to be a success in South Asian countries and particularly in south India. It has also provided a pathway for broader issues like empowerment and growth among various societies.
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A series of research studies conducted by NABARD during the early 1980s revealed that despite having a wide network of rural bank branches which took different programmes like poverty alleviation programmes, creation of job opportunities through bank credit etc., a very large number of the poorest of the poor still remain outside the scope of the formal banking system. It is found that the poor really needed the better access to the financial services and products rather than cheap subsidized credit. The urge for

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improving the access of the poor to the existing banking network has led to innovative / alternative credit systems such as Self Help Groups set up with the help of NGOs and banks. Microfinance services in India are provided mainly by two different models viz. SHG-bank linkage model and MFI- bank model. Out of these two models, SHG-bank linkage model has emerged as the more dominant model due to its adoption by formal financial institutions namely, Commercial Banks, Regional Rural Banks and Cooperative Banks. The MFI-bank model is also gaining importance due to its massive supports by various private sector and foreign funding agencies (Karmakar,K.G, 2010) This paper is designed as follows: Section II presents concept of microfinance and self-help groups, review of literatures, brief objectives of the study and data and methodology. Section III analyses status and performance of SHGss in West Bengal. In section IV, assessment of SHGs in the district of Purbo Midnapore is made. Finally, section V presents concluding observations.

Programme (IRDP) and the revamped programme named as Swarnajayanti Grameen Swarozagar Yojana (SGSY) laid emphasis on investment credit needs only. The rural poor did not receive the subsidized and low interest credit rather the same were channeled to the better-off sections of the rural people. Further, poor monitoring and follow-up by the bankers resulted in poor repayment of loan. Under the above circumstances, NABARD launched a pilot project named as Self-Help Group Bank Linkage programme in 1992. The major emphasis was given to disburse loans without collateral, 100 percent repayment norms and lending to groups instead of an individual alone who would also invest their savings and regulate their groups and group loans, thus reducing transaction costs for the borrowers and the banks. Thus, microfinance as a means of meeting the credit requirements of rural poor is not a new concept and was met both by formal as well as informal credit agencies. As the SHG-bank credit linkage programme is now a decade old, it is high time, to review and analyse the lessons learnt the SHG movement.

Concept of Microfinace Microfinance is defined as the provision of thrift, credit and other financial services such as money transfer and micro insurance products for the poor, to enable them to raise their income levels and improve living standards. It refers to the entire aspect of financial services such as savings, money transfers, insurance, production as well as investment credit and includes the need for improvement in skill and entrepreneurial development that would help them to overcome poverty. Micro finance programs have significant potential for contributing to economic and social empowerment to members of SHGs. Access to savings and credit can initiate or strengthen a series of interlinked and mutually reinforcing virtuoso spirals of empowerment (Niranjana Babu Reddy, 2010). Micro finance development has emerged as major strategy to combat the twin issues of poverty and unemployment that continue to pose a major threat to the polity and economy of both the developed and developing countries. So micro finance is a way of financing to poor for their business, to alleviate their poverty, empowering them, giving socio economic benefits of sustainable way.
The concepts of microfinance have existed long back since 1904, when the Co-operative Societies Act was passed for ensuring production credit loans to the farmers through Primary Credit Societies. The formation of long-term co-operative credit institutions to meet investment credit needs of the farmers started in 1928.With the various priority sector targets under social banking in1967 and after bank nationalization in 1969, microfinance concepts in banking institutions once again came to the forefront. However it is found that rural credit market was still dominated by the rural moneylenders and traders who offered loan at a high rate of interest even for consumptions purposes. The Integrated Rural Development

Concept of Self-Help Group (SHG) Theorists consider SHG as a homogeneous affinity group of poor villagers, voluntarily formed, with not less than five members. The group in its formulation does not have very strict guidelines and the decision as to the period of loan rests solely on the group members. Credit is given both for consumption and production purpose. The loan lending process would be channelized from NABARD, re-financed to banks and banks would further lend it to groups. It is assumed that groups thus formed would gradually become viable to meet credit needs of their members.
Thus a SHG basically comes together to: Save small amounts regularly Mutually agree to contribute to a common fund Meet their emergency needs Have collective decision making Resolve conflicts through collective leadership and mutual discussion Provide collateral-free loans on terms decided by the group at market rates

SHG is formed and groomed by a NGO or a bank branch or a government agency called a Self-Help Promoting Institution (SHPI). The members of the group are encouraged to collect regular thrift on a weekly or fortnightly or monthly basis and use the pooled resources to give interest bearing small loans to their members. A savings bank account is opened with a bank branch and regular thrift collection and loaning to members builds up financial discipline among the members.

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Review of Literature In India, the rural credit system has undergone radical changes in respect of focus, structure and approach. The changes may be considered under three headings. Changes during the first phase pursued developmental objectives of providing agricultural credit through cooperatives. Later, agricultural demands shifted and the government adopted multi-agency approach in catering to the needs of the rural sector. Regional rural banks were created and the proportion of rural credit increased from 29.2 percent in 1971 to 61.2 percent in 1981 and ended at 56.6 percent in 1991. The third phase began in 1990s and the government appointed the Narasimham committee to examine all aspects relating to structure, organization, function and procedures of the financial system. The recommendations included deregulation of interest rate policy, restructuring of rural credit delivery system, consolidation of the governments self-employment schemes and other such measures. The implementation of financial liberalization measures are regarded as the entry point for microfinance revolution.
Paul Mosley and David Hulme (1993) compared the changes in household income from each of thirteen MFIs in seven countries. The study found that all schemes had positive measured effects on income. Albert Park and Changqing Ren(2001) examined the impact of microfinance on household welfare by using data from 449 households in China. The study reported increase in consumptions by about 97 percent of the sample, indicating that credit access could help increase the ability of households to smooth consumption when incomes are variable. Zaman Hassan (2001) examined the extent to which microcredit reduces poverty and vulnerability through a case study of Bangladesh Rural Advancement committee (BRAC), in Bangladesh. The data collected from 1072 households found that there are several channels by which microcredit services can reduce vulnerability and also poverty. Saundariya Borbora and Ratul Mahanta (2001) assessed the role of SHGs in inculcating saving habits among the poor and the contributions of the program in the social and economic empowerment of the poor. 80 percent of the beneficiaries could also expand their income generating activities. Naila Kabeer (2005) examined the impact of microfinance and concluded that a variety of basic needs are being met and it also promotes improvements in standards of living. As far as womens empowerment is concerned, the evidence reported is positive and there are exceptions and variations in the nature and strength of impact by context and by organization. Sridhar Seetaraman (2005) assessed the socio-economic impact of SHGs through field level data. Study revealed that creation of income-generating activities through loans availed of from banks
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has made a significant impact on the overall economic status of the group members. Additional employment generated through the groups collective functioning has provided scope for increase in the household income. Franes Sinha (2005) examined the impact of microfinance services on clients dependence on informal sources of credit. The study found a lower incidence of borrowing from informal sources and the percentage of households borrowed at high interest rates is comparatively lower. The review of literature has highlighted the benefits of microfinance SHG linkages. However, it is noteworthy that each study is explained in a context and to arrive at a broad framework, more studies would be helpful. In this background, the present study is undertaken in Midnapur (East) district of West Bengal to examine and evaluate the microfinance interventions and the role of SHGs in the process of development. Accordingly, the following objectives were formulated for the study.

Objectives of the Study The objectives of the present study are as follows:
To identify and assess the socio economic conditions of members of SHGs from Midnapur (East) District To examine the utilization of microfinance services provided by the Self-Help groups on income and employment levels of the beneficiaries in the district. To study the functional issues related to SHGs.

To achieve the above objectives the study area selected is West Bengal, since there is a widespread movement of SHG and microfinance programs. West Bengal is one of the leading states in Eastern India. Further, field survey study is conducted in two villages taken from two different blocks of Midnapur (East) district of West Bengal to understand and evaluate the impact of microfinance services provided to the SHGs of the district.

Data and Methodology Collection of Data: The study is based on both secondary and primary data. Secondary data was collected from various publications of NABARD, Banks and other governmental and nongovernmental organizations, Microfinance institution reports and also from internet. Further, primary data are collected by conducting field survey in two villages taken from two different blocks of Purbo Midnapur District. The primary data are collected by canvassing specially designed questionnaire for the purpose of the study. The socio-economic impact of the study has been done on the basis of primary data collected.
Methodology: The structured questionnaire was circulated among

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the members of Self-Help groups of these two villages selected through random sampling method. Thereafter, tabular analysis is done to understand the socio economic impact of the study. The following questions were addressed in the analysis. How is the microcredit utilized by the beneficiaries? Whether borrowings were used for income generating purpose or not? How effective are the SHGs in their functioning?

Since the questionnaire elicited information on the various socioeconomic dimensions of the beneficiaries, simple statistics like percentages and bar diagrams, pie charts etc., are used to analyze the data.
Table 1: Statewise (Top Ten) Physical Progress of SHGs under SGSY State No. of SHGs Formed Total since 1.4.99 Andhra Pradesh Uttar Pradesh Tamil Nadu Madhya Pradesh West Bengal Maharastra Orissa Assam Rajasthan Bihar National Total 933693 409605 323218 291152 273738 240173 218265 208212 207475 154371 3708410 During 2009-10 21991 60088 30000 16202 35123 33424 20780 22327 2846 30696 320178

Status and Performance of SHGs in West Bengal From the above table it is evident that during the year 2009-10, number of SHG formed in West Bengal was 35123 which are second highest in India. The number was much higher than the groups formed in many of Southern States namely Andhra Pradesh (21991), Tamil Nadu (30000), Karnataka (7016), Kerala (1678) etc. Even the state of Maharastra lies below W.B. Thus, it can be concluded that in W.B., the process of forming SHG under SGSY scheme going on at a faster rate across the country. Further, in respect of quality of the groups formed it is found that more than 80 percent (80.51%) of the groups formed in W.B. passed Grade-I and the number of GradeI groups formed during 2009-10 was also second highest among all the top ten states under study.

No. of Grade I SHG Total since 1.4.99 768808 235305 255095 116090 220374 162247 135266 149857 38531 83261 2446485 During 2009-10 17761 32055 55513 12199 42235 26204 17793 23765 9176 25027 308380

No. of Women SHG Total since 1.4.99 846362 99553 313714 141577 229551 196720 176526 135123 116929 94655 2651422 During 2009-10 59528 13827 29904 9103 32178 30943 18879 13993 2843 19810 261635

No. of SHG taken up Economic Activities Total since 1.4.99 251302 134118 29886 50182 178017 77252 23335 107187 2320 55361 1026350 During 2009-10 84837 18832 506 7922 47304 12541 5841 19081 801 17378 237953

Source: Official Website, GOWB

Table 2: Physical Progress of SHGs in Three States in the Eastern Region State No. of SHGs Formed Total since 1.4.99 West Bengal Orissa Bihar National Total 273738 (7.38%) 218265 (5.88%) 154371 (4.16%) 3708410 During 2009-10 35123 (10.97%) 20780 (6.49%) 30696 (9.59%) 320178 No. of Grade I SHG Total since 1.4.99 220374 (9.0%) 135266 (5.53%) 83261 (3.40%) 2446485 During 2009-10 42235 (13.7%) 17793 (5.53%) 25027 (8.12%) 308380 No. of Women SHG Total since 1.4.99 22955 (8.66%) 176526 (6.66%) 94655 (3.57%) 2651422 During 2009-10 32178 (12.30%) 18879 (6.66%) 19810 (7.57%) 261635 No. of SHG taken up Economic Activities Total since 2009-10 178017 (17.34%) 23335 (2.27%) 55361 (5.39%) 1026350 During 2009-10 47304 (19.88%) 5841 (2.45%) 17378 (7.30%) 237953

Source: Official Website, GOWB

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Table 3 represents physical progress of SHGs in three important states of Eastern Region namely, West Bengal, Bihar and Orissa. It is interesting to note that out of the three states, position of West Bengal is significant in respect of number of SHGs formed, grade I groups, Number of women SHGs formed and Number of SHGs taken up economic activities. The percentage share of all the above aspects in respect of national total is highest in West Bengal. Thus, it can be concluded that in West Bengal, Self-Help Group formation and its progress of work is much better than the other two neighbouring states.
Table 3: District wise Physical Progress of SHGs in West Bengal District No. of SHGs Formed Total since 1.4.99 24Parganas(North) 24Parganas(South) Bankura Birbhum Burdwan Coochbehar Darjeeling Dinajpur(Dakshin) Dinajpur(Uttar) Hooghly Howrah Jalpaiguri Maldah Murshidabad Nadia Midnapur(Purbo) Midnapur(Paschim) Purulia Siliguri Total 15318 14016 14379 17075 16994 12544 2700 9746 10327 6816 6876 21444 15414 28899 12729 27800 17692 20150 2819 273738 During 2009-10 1856 1800 1470 2130 1752 2173 344 244 1677 1529 1559 1199 1346 5818 2333 3561 2162 1697 473 35123

Assessment of SHGs in the District of Purbo Midnapur The erstwhile district of Midnapore was divided into Purbo Midnapore and Paschim Midnapore on Ist January 2002. Purbo Midnapore district is located in the southern part of West Bengal surrounded by Rupnarayan and Hooghly rivers in the East, Paschim Midnapore district in the West and North and Bay of Bengal in the South. Its total area is 4151.64 sq.km predominantly under agriculture and partly under industries. It has four Sub-divisions namely Tamluk, Haldia, Contai and Egra. Its number of Blocks is 25, police stations 21 and 5 Municipalities.

No. of Grade I SHG Total since 1.4.99 11937 10044 9084 12806 13925 11463 1930 8855 6614 5249 5959 20109 12763 24089 9299 22236 14662 17311 2039 220374 During 2009-10 2640 1502 2910 2181 1540 1418 348 2061 1049 1201 1071 2304 3060 6453 2199 4427 2420 2974 477 42235

No. of Women SHG Total since 1.4.99 13443 11214 11704 11592 11384 12169 1169 8813 9041 4952 6017 20904 12460 24410 10450 23298 16742 17612 2177 229551 During 2009-10 1809 1438 1159 1815 1379 2173 318 242 1592 1458 1519 962 1163 5643 2202 3286 2162 1517 341 32178

No. of SHG taken up Economic Activities Total since 1.4.99 7605 7534 6901 10393 13247 9066 1873 7659 4857 3723 5747 18014 9625 17881 9273 17641 13591 11844 1543 178017 During 2009-10 4245 344 3757 2413 984 1418 329 7145 991 968 1071 1919 4312 6064 2089 3694 2342 2579 640 47304

Source: Official Website, GOWB Note: Figures in parentheses represents percentage of national total Table 2

Table 3 exhibits that there was a large inter-district variation in the growth and expansion of the SHGs formed under SGSY since its inception. However, it is found from the above table that in the district of purbo Midnapur, there was significant growth in respect of number of SHGs formed (10.16%), Number of SHGs passed grade I (10.09%), Number of women SHGs formed (10.15%), as well as number of SHGs taken up economic activities (9.91%). In fact, the position of Purbo Midnapur district was second highest, just after the district Murshidabad out of all the districts in West Bengal.

It is found that there are two types of SHGs formed in the study district. They are i) Direct beneficiaries of SGSY and ii) Beneficiaries of SHG formed by the co-operative society. However, due to time constraint we have collected information and discussed the detailed activities and performance of type-I group only. The Primary data were collected from 21 SHGs (out of these one group is defunct) and 88 individual beneficiaries under SGSY scheme. The survey was conducted in two villages namely Ururi village of Chandipur Block and Chaklalpur village of Haldia Block.

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We have selected the blocks with the advice of District Level Authorities. However, the implicit logic behind choosing these two villages is that, first of all, these two villages are very close to my native place and secondly, the SHGs in these villages are functioning for a longer period of time. Of the 21 SHGs, about 67 percent have been linked for more than five years, while the remaining 33 percent have obtained bank linkage in the last five years. Further, we found 8 groups formed under SGSY in Ururi village working since 2004 and 13 Groups formed under SGSY, (out of these one group is defunct) in Chaklalpur village, working since 2001. We selected 43 members from Ururi village and 45 members from chaklalpur village under random sampling method. So, altogether, we have 20 SHGs and 88 respondents. The economic and social impact of micro-finance and its impact on savings and borrowings are analyzed by canvassing specially designed questionnaire and results are interpreted through tabular analysis.

Table 5: Caste-wise SHG Members in the sample villages Caste Ururi Sample reported General SC ST Total 36 7 43 % 83.72 16.28 100 Villages Chaklalpur Sample reported 40 5 45 % 88.89 11.11 100

Source: Field Survey data

Demographic Interpretation
Table 4: Percentage distribution of Education Level Education Level Ururi Sample reported Illiterate Primary Middle Secondary H.S Graduate & above Total 1 26 8 7 1 43 % 2.33 60.46 18.60 16.28 2.33 Villages Chaklalpur Sample reported 2 31 4 7 1 45 % 4.44 68.89 8.89 15.56 2.22 Total Sample reported 3 57 12 14 2 88 % 3.41 64.77 13.64 15.91 2.27

The literature study revealed that in most of the places across the country, mainly backward classes of people formed groups to have access to the micro-finance so as to uplift their financial conditions. However, we find that in both the two villages under study, percentage of general-caste SHG members is highest. The concept of empowerment of poor rural women across the country has inspired not only the backward classes of people but this has insisted general caste people too. Formation of group has united all categories of people to come closer. In fact, people from all sections have evinced interest in joining SHGs for availing benefits. This indeed a great achievement so far concept of Self Help Group and microfinance is concerned.
Table 6: Reason for Joining SHG Sl. No. 1. 2. 3. 4. 5. Reason for Joining To get loan To get loan and save To get help to start business To get training To get self-confidence & dignity Total Source: Field Survey data No. of Respondents 54 25 4 2 3 88

100

100

100

Source: Field Survey data

Table 4 represents education level of the beneficiaries. It is observed that in two villages, majority of them completed primary, middle, and secondary level of education. Out of the samples reported, only 2.27 percent have completed higher secondary and none have completed graduate courses. The rate of illiteracy is very low. This in fact, helped the members to understand and evaluate the rules and regulations of the groups.

The above table clearly describes the major reason for joining the SHG was to get loan. In addition, they want to save too. In fact, the concept of Self-Help Group has forced the members to save in order to obtain loan for meeting various economic activities. The number of respondents joined the group for obtaining loan together with the members having intention to save become 79 out of total respondents of 88. However, to our surprise, we found 3 members who opined for joining SHG to get self- confidence and some sort of dignity from the society and found 2 members who were looking for training. This demonstrates the sign of empowerment of rural women.

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Table 7: Source of Inspiration for Joining SHG Sl. No. 1. 2. 3. Source Gram Panchayat (G.P) Neighbours & Group members Others Total Source: Field Survey data No. of Respondents 59 23 6 88

Table 7 shows that most of the members got the information about formation of group and its nomenclature from Gram Panchayet. The information of SGSY first came to their knowledge through G.P. The information of group formation is then circulated through their family members and friends. This in fact establishes sound Panchayet Raj System of West Bengal.

Economic Impact
Table 8: Percentage Distribution of Occupation of Households Occupation Ururi Sample Reported Agriculture & Allied Self-Employed Other Labour Service Total 12 21 9 1 43 % 27.90 48.84 20.94 2.32 100.00 Chaklalpur Sample Reported 18 16 10 1 45 % 40.00 35.56 22.23 2.22 100.00 Total Sample Reported 30 37 19 2 88 % 34.09 42.05 21.59 2.27 100.00

Table 9 depicts the various income categories of the members before and after joining the SHG. The comparison clearly shows that the levels of income have changed during post-SHG situation. The number of members having monthly income below Rs 1000 has been reduced from 51.14% to 18.18% revealing the fact that their monthly income has been improved after joining the SHG. Similarly, percentage of members having monthly income ranging Rs. 1001-Rs.1500 has also been improved during post-SHG stage. It is found that before joining SHG the percentage of members having monthly income Rs 1001-1500 was 32.95 and the said percentage becomes 52.28 after joining SHG. Likewise, the other income levels have also been increased during post-SHG situation. While interviewing, the members answered that after joining SHG they have been able to explore more avenues for their earning. In fact, almost all members opined that their income level has been improved after joining the SHG. Thus, it can be said that formation of group has indeed helped the rural poor households to improve their level of income.
Table 10: Monthly Savings of the Respondents Before and After Joining SHG Monthly savings No Savings Upto Rs.50 Rs.51-Rs.100 Rs.101-Rs.200 Above Rs.200 Total Source: Field Survey data Before Joining SHG No. 62 12 8 4 2 88 % 70.45 13.64 9.89 4.55 2.27 100.00 After Joining SHG No. nil 48 22 11 7 88 % 54.55 25.00 12.50 7.95 100.00

Source: Field Survey data

Table 8 depicts the various occupations of the beneficiaries. It is found that 34.09 percent of the samples are engaged in agriculture and allied activities like fishing, cattling, dairy, poultry farming etc,. Forty-two percent are self-employed and 21.59 percent are doing other type of labour. When sources of income of beneficiaries are analysed, we found substantial increase in household incomes from livestock and self-employment in non-farm activities. In fact, there was a shift of activities from agriculture to allied farming.
Table 9: Monthly Household Income Before and After Joining SHG Monthly Income Upto Rs.1000 Rs.1001-1500 RS.1501-3000 Rs.3001-5000 Above Rs.5000 Total Before Joining SHG No. 45 29 8 4 2 88 % 51.14 32.95 9.09 4.55 2.27 100.00 After Joining SHG No. 16 46 17 7 2 88 % 18.18 52.28 19.32 7.95 2.27 100.00

The basic aim of SHG is to develop thrift among the marginalized sections of the society. Thrift, particularly among rural women, reduces dependency on non-institutional sources and develops self-reliance. Hence, an attempt has been made to collect information about savings of members.

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It is found that in both the villages the benchmark amount of monthly saving of members was Rs. 30 p.m. However, some of the sample respondents saved Rs 50 p.m and even a few saved Rs.100 p.m. Table 10 shows that whereas 70.45 percent of sample respondents had no savings before participation in SHGs, the same percentage become nil after forming SHG, which explained that they have been able to save at least some amount after joining SHG. Further, percentage of respondents, saved upto Rs 50 p.m. has also been increased from 13.64 percent to 54.55 percent during post- SHG period. The field study further revealed that in order to build more fund of the group , the group lend their own fund (savings) to the members (and sometimes other households of the village) @ 2% p.m. which in their opinion much less than the rate offered by rural moneylender. Thus, it can be said that SHG helped the poor rural households particularly the rural women to save and consequently helped them to build self-reliance in the family as well as in the society.
Table 11: Average Loan Amount per Member Household during 2010-11 Particulars Pre-SGSY Post-SGSY Ururi Missing 5972 Loan Amount (Rs) Chaklalpur Missing 5889 Combined Missing 5926

Table 12: Income and employment generation of sample respondents Income and Employment generation Increase Not-increase Total Source: Field Survey Data Number of Respondents 76 12 88 Percentage 86.36 13.64 100

Source: Field Survey Data

The information presented in this section shows that average loan amount per member before-SGSY is missing, as the members interviewed could not give the amount of borrowings they had in Pre-SGSY situation. However, a majority of members about 76 percent told that they had started borrowings in Post-SHG situation. This established the credit widening of the programme. Further, we find there was a shift in the composition of activities due to SGSY. The members interviewed, answered that, while in Pre-SHG situation loan was taken mainly for consumption and cultivation the same was taken mainly for business and allied activities in post-SHG situation. They admitted that due to increase in income in post-SHG situation, their need for loan for consumption purpose had substantially reduced. While examining sources of borrowings we find that rural moneylender was the most important source in the pre-SHG period. About 65 percent of the households obtained loans through moneylenders before becoming SHG members. Apart from moneylenders, other sources were friends, relatives, bank, and co-operative societies. Interestingly, we find that loan from moneylenders were reported to be taken by only 4.5 percent of the households after joining SHGs. The repayments of loans were also observed to be satisfactory. There was 95 percent recovery of loans by the groups in the sample villages.

Table 12 shows that out of 88 respondents, 86.36 percent of respondents felt that Self-Help Groups are helpful to improve the income level and has caused increase in employment generation of the sample respondents. In fact, we have computed this percentage on the basis of increase in the number of working days they had reported to us. Further, we felt that the number of respondents gave negative views, were in fact, recently joined in the group and were not actively utilized the loan they had taken at that moment. Social Empowerment: It is found that beside economic improvement the social outlook of rural women has undergone a radical change. The involvement in the group significantly contributed in improving the self-confidence of the members. About 95 percent of beneficiaries believed that, they receive recognition in respect of various decision making process in the family. The members were more assertive in confronting social evils and problem situation. As a result, there was a fall in the incidence of family violence. Further, female SHG members were asked about various aspects of their public participation, like attending village meetings, fight against drug, attending health care forum etc. Significant improvement was observed in post-SHG situation. In fact, some degree of transformation of social outlook is observed. Problem faced by the members: While asking about the problems faced, if any, 67 percent members pointed that they need more information for exploring profitable avenues. Training for marketing and technical skills is lacking. It as found that in most of the SHGs, the members had taken up individual income-generating activities. Only a few had taken up group activities successfully. From their conversation, it seems that lack of coordination among the group
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members is responsible for it. Further, SHGs are not satisfied with the activities of bank officials in respect of clarifying various issues like project repayment term, interest on project loan etc. Knowledge in financial management and bookkeeping is found to be inadequate and weak. Governance of SHGs: It has been seen that SHG leaders are nominated instead of being elected in all the groups in the sample. The group meetings are held regularly at least twice in a month. The percentage of members attending the meetings is nearly 90 percent and is participated in the discussions. Interestingly, 95 percent of the group members reported that the rules and regulations of the group are accessible to them. So far keeping of records are concerned, it was found that although the books are maintained properly in most of the cases, the other types of documents e.g., bank statement etc., are not filed up properly.

income. Thus, it is plausible to conclude that SHGs definitely helped in improving the purchasing power of the rural households. Sixth, we find there was a shift in the purpose of loan taken. While previously the loan was taken mainly for consumption and cultivation, the same is taken mainly for business and allied activities in post-SHG situation. It is found that due to increase in income of the members in the post-SHG situation, their need for loan for consumption purpose had substantially reduced. Seventh, the study revealed that, formation of group has helped credit widening of the programme. It is found that majority of members started borrowings after joining the group. Eighth, it is found that beside economic improvement the social outlook of rural women has undergone a radical change. The involvement in the group significantly contributed in improving the self-confidence of the members. The members were more assertive in confronting social evils and problem situation. As a result there was a fall in the incidence of family violence. In fact, some degree of transformation of social outlook is observed. Finally, the study revealed that training for marketing and technical skills hindrance to make the ventures undertaken by the sample respondents more profitable one. Efforts are absent from the group members to carry out group-activities successfully. Thus, it can be concluded that SHG-Bank linkages is a successful step in providing access to finance to the rural needy people of purbo Midnapore district subject to some difficulties faced by the members as highlighted above. The process has enabled a large number of people to exercise various options to challenge poverty. The programme, indeed, helped in improving the household conditions of the beneficiaries. However, on observation the following issues were identified. Regional Imbalances Various reports show that there has been a concentration of SHGs in southern states. The share of cumulative SHGs linked in southern states has been at about 60 percent of the total SHG-credit linked in the country. In order to correct this anomaly, NABARD had taken up intensification of SHG-bank linkage programme in 13 identified priority states, which account for 70 percent of the rural poor population. We find that there is wide inter-district variation in respect of promotion of SHGs in West Bengal (Table 3.3). In some of the districts, namely Howrah, Hooghly, Nadia, Dinajpur (Uttar & Daksin), Darjeeling Coochbehar etc, the rate of promotion of SHGs is very low. It is suggested that the State Government should also take up intensification of SHGbank linkage programme in those districts where the situation strongly demand for it. Sustainability of SHGs: Availability of large-scale finance to meet the demand for growing microfinance clients is an area for concern. Add to this, availability of quality manpower in banks, NGOs, government and other support levels is a critical issue in
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Conclusion The major conclusions that emerge from our study can be succinctly outlined as follows.
First, there have been significant growth and expansion of SelfHelp Group Bank linkage across the different regions of the country over the years. It was found that the growth of Eastern Region was second highest, just after Southern region in respect of the number of SHG linked as well as percentage share. Further, it was found that among the states of Eastern region, West Bengal ranked first. Second, we find a large inter-district variation in the growth of number of SHGs formed in West Bengal. However, the growth of SHG in Purbo Midnapur district is significant. In fact, in respect of number of SHGs formed under SGSY, Purbo Midnapur district is second highest, just after the district Murshidabad. Third, the analysis of annual household income of sampled respondents for both pre-SHG and post-SHG situation revealed that there was substantial increase in the annual income of the households in post-SHG stage. Further, when sources of income of SHGs are analysed, we find substantial increase in household income from livestock and self-employment in non-farm activities. In fact, we find there was a shift in the composition of activities due to SGSY i.e., from agriculture to allied farming. Fourth, we find that a significant number of members started savings only after joining the groups and the rests have been able to increase their savings in the post-SHG situation. In fact, a majority of members having no savings in pre-SHG era were turned to be having substantial amount of savings in the post-SHG stage. The study found that apart from savings in SHG the other major saving instruments used by the households are LIC, post offices savings and savings in co-operative societies. Fifth, it is found that the annual household expenditure of majority of members have been increased due to increase in their annual
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Sudhin Kumar Bera

sustainability. Proper nurturing and training provided to SHGs also important for their survival. Further, availability of need based services e.g., maintenance of records, conflict resolution etc., also required for smooth operation of the group. Post-linkage follow-up: Continuous monitoring by banks is needed to maintain the quality of groups. Number of groups per branch is increasing rapidly. Therefore, post linkage monitoring of groups is a critical requirement. Business development services: Apart from financial intermediation, provision for right guidance as to profitable ventures, marketing, input supply, knowledge in management, human resource development etc., is the need of the hour. Various government agencies, NGOs and voluntary agencies are to come forward to provide these services so that the members could take up remunerative economic activities and indeed improve their quality of life. Supervision and Regulation: The rapid expansion of this programme and the large numbers give rise to concerns about the continued stability and integrity of the movement. The Reserve Bank of India should look into the supervision and regulation aspects of the sector in the interests of millions of the poor who access financial services through this mode.

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a. Economic Review (Various issues) b. Statistical Abstracts (for different years) c. Official Website,( Bangler Mukh) 8. Karmakar. K. G.. 1999. Rural Credit and Self Help Groups, Sage Publication, New Delhi. .. (eds) (2008), Microfinance in India, SAGE Publications Asia-Pacific Pte Ltd. 9. Kaladhar, K. 1997. Microfinance in India: design, Structure and governance, Economic and Political Weekly, pp 26872706. 10. Lutfun, N., Khan Osmani 1998. Impact of credit on the Relative Well-being of Woman: Evidence from the Grameen Bank, IDS Bulletin; 29(4):31-38. 11. National Bank for Agriculture and Rural Development (NABARD) a) Various issues of annual reports. b) NABARD and Microfinance, Report of the Working Group on Non-Government Organisation and Self Help Groups, Mumbai, (1999-2000), 12. Naila, Kabeer, 2005. Is Microfinance is a Magic Bullet for Womens Empowerment? Analysis of Findings from South Asia, Economic and Political Weekly; 29th October; 4709-4719. 13. Neils Heermes and Robert Lensink, 2007. Impact of Micro Finance A Critical Survey, Economic and Political Weekly, 14. Sharma, K.C. 2001. Micro finance through self-help groups, Indian Journal of Agricultural Economics, 56(3):460-463. 15. Saundariya Borbora and Rahul Mahantha, 2001. Microfinance through SHGs and its impact: A Case of Rashtriya Gramin Vikas Nidhi Credit and Savings Program in Assam, Indian Journal of Agriculture Economic; 56(3):449-452. 16. Sridhar Seetharaman, 1998. Quick Study on Performance of SHGs and Dwcra Implemented by NGOs and Government, NIRD, Hyderabad. 17. Sa-Dhan, 2008. The Bharat Microfinance Report Quick DATA, 2008 18. Zaman, Hassan, 2000. Assessing the Poverty and Vulnerability Impact of Micro credit in Bangladesh: A Case Study of BRAC, Working paper no-2145, World Bank; available at: Website: www.worldbank.org/hmt/dec/Publication/Working papers/wps2000series/wps2145/wps2145.pdf

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