bu i ld i ng an i nc lu s i ve f i nanc i a l s e ctor i n i nd i a
95
has proposed a new approach to livelihood creation,
which would
5
:
(i) nurture and support livelihood development activi-
ties for the poor through SHGs;
(ii) enable second-tier, community-based entities to
facilitate and handhold SHGs and their members
to establish sustainable livelihoods;
(iii) facilitate collaboration with resource agencies for
end-to-end solutions;
(iv) encourage formation of livelihood groups from
among members, on the lines of JLGs;
(v) further promote the concept of JLGs to enable
individuals such as sharecroppers, oral lessees, etc.,
to avail bank loans.
While SHGs 2, which was launched by NABARD in
March 2012, had proposed product- and system-level
changes, its long-term policy level thrust was minimal.
SHG 2 was also silent on the role of SHG federations.
Basically, NABARD does not favour a role for SHG
federations as financial intermediaries. On the other
hand, it has been providing grants to federations to
promote SHGs. This appears to be a further articulation
of the intended role of SHG federations as envisaged
by NABARD, i.e., in the provision of non-financial
services and overall facilitation of livelihood promotion
opportunities through promotion of micro-enterprises,
etc., as part of a larger integrated thrust in convergence
with NRLM. This would involve a shift away from
the credit-driven approach of SBLP towards building
member-driven institutions of the poor for livelihood
development based upon SHGs.
4.7 FINDINGS OF SHG STUDIES
During the past year, a few studies on SHGs have been
undertaken. NABARD initiated studies on topics such
as voluntary savings, transaction costs, SHG federations
as livelihood support organizations, SHGs as agents
of social change and the quality of sustainability of
SHGs in Bihar and Orissa. In addition to the above,
IFMR-ACCESS-GIZ conducted in late 2013 a study on
SHG-Bank Linkage through the lens of responsible
finance. Besides, APMAS undertook a study of equality
and sustainability of urban SHGs in Andhra Pradesh.
The issue of SHG quality and sustainability has become
the leading concern in respect of SBLP.
6
Earlier in 2013,
ENABLE had conducted a study in eight states on the
quality and sustainability of SHGs. Other studies by
NABARD and GIZ are proposed in the future. The lat-
est round of studies confirmed the role of the SHGs in
bringing about wide-ranging change to the lives of their
members. They also highlight serious shortcomings in
the implementation and performance of the SBLP apart
various issues related to bank support for SBLP, inter-
nal SHG dynamics, variations in outcomes in rural and
urban settings, issues in graduation of SHG members to
through individual savings accounts and microenterprise
and the technical and business development support re-
quired sustained income generation through borrowing
from SHGs.
(i) SBLP through the Responsible Finance Lens
7
The study attempted to understand the intra-group
dynamics of groups in terms of financial transactions,
decision-making, cohesiveness, transparency and ac-
ceptance of technology and new policy. It aimed to
understand the financial and non-financial interactions
of external agencies as well. A total of 200 SHGs were
selected from three states—Bihar, MP and Karnataka.
The key finding of the study was that the sample SHGs
were on the right track of achieving the objective of
financial inclusion and empowerment through group
formation, savings, lending, borrowing and community
development. However, there was still a vast scope of
improvement across several quality parameters of the
SHGs. These parameters pertained to organizational
management and efficiency, capability and achievement
of group members and financial and social performance.
The study also found substantial state-wise differences in
group dynamics. Comparative analysis of the three states
revealed that SHGs in Karnataka fared better than the
other states. In spite of the scope for social and economic
empowerment in the sample SHGs, a primary concern
was their over-dependence on SHPIs. The study sug-
gested that before taking further steps towards financial
inclusion and introducing technology and other innova-
tions for effective functioning of SHGs, there was need
to emphasize self-reliance and assess the performance of
the current SHG model.
