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(ii) Quality and Sustainability of SHGs in
Bihar and Odisha
8
The study on quality and sustainability of SHGs in Bihar
and Odisha was undertaken by APMAS at the instance of
NABARD. The study objectives included:
(i) to ascertain the quality of SHGs including SGSY
groups promoted by various SHPIs, and their abil-
ity to effectively use their savings and excess credit
under SBLP;
(ii) to know the role of SHGs in helping entrepreneurial
members to better manage risks and shocks;
(iii) to assess socio-economic impact and to evaluate
factors preventing SHGs from reaching the optimal
quality.
The study covered 288 SHGs in 72 villages of eight
districts in the two states during November–December
2013. On the basis of the findings of the study, it was
concluded that SHGs in Bihar were relatively younger,
had much stronger group dynamics and were increasingly
becoming a part of the SHG federation system. This was
because of the role of government as the predominant
promoter under the Bihar Rural Livelihoods Promotion
Society (BRLPS)/ NRLM with its dedicated programme
of livelihoods promotion through SHGs. In Odisha on
the other hand, the SHG movement had already achieved
significant scale under Mission Shakti of Government of
Odisha. However, in the latter state, there was no in-
stitutional support and monitoring of the SHG system
due to lack of resources whereas in Bihar, resources and
monitoring support was available. As a result there were
comparatively higher NPAs under SBLP at around 18 per
cent in Odisha as compared to 6 per cent for bank-linked
SHGs in Bihar. This was also reflected in the quality of
SHGs, which was higher in Bihar, as indicated by the
grading exercise which placed with 56 per cent of SHGs
in A grade in Bihar as against only 24 per cent in Odisha.
The study suggested that as SHGs grew older their quality
deteriorated which was another factor responsible for the
differences in SHG quality in the two states.
Some of the other findings of the study included:
(i) There was an absence of lending from SHGs own
funds in about one-third of the SHGs. This was
because of (a) banks not allowing withdrawal of
SHG savings during the period of loans (b) con-
tinual deposit of savings in the bank to get larger
loans (c) SHGs deciding against internal lending in
view of possible default. Accordingly, large amount
of idle funds remained in SHG-SB accounts of an
average of Rs. 20,000.
(ii) Percentage of SHGs with loan outstanding to banks
in both Bihar and Odisha was low with about half
of the SHGs never having accessed credit.
(iii) Loan repayment rates from SHGs to banks were
a big concern with 37 per cent of SHGs having a
repayment rate of less than 50 per cent.
(iv) There was also a high incidence of default in case of
loans from internal funds in the SHGs studied.
SHG quality was also affected since both the SHGs
and federations were formed through a target-oriented
approach, resulting in compromises in the process of
group formation. As a result, SHG meetings were mostly
confined to collection of savings and loan instalments
and the disbursement of loans. The social agenda was
taken up in only some of the SHG meetings. Leadership
rotation was minimal and leaders in many SHGs were
themselves the book writers. Factors like frequency of
migration to nearby towns and the low literacy levels also
affected the quality of groups. SHG federations were not
in a position to provide multiple services due to scarcity
of funds.
Nevertheless, there was visible impact of SHGs at vari-
ous levels, with the impact higher in Odisha as compared
with Bihar. Dependency on moneylenders had decreased.
Besides, there were changes in SHG relationships with
village-level institutions, household-level impacts and
changes in inter-personal relations between SHG women
and other household members.
(iii) Urban SHGs in Andhra Pradesh: Quality and
Sustainability Issues
9
A study sponsored by the government of Andhra Pradesh
covered the SHG-based urban programme MEPMA,
which has facilitated 305,000 SHGs organized into 9104
Slum Level Federations (SLFs) and 189 Town Level
Federations (TLFs) in the 189 municipalities of Andhra
Pradesh. The study covered 2000 SHGs and 4000
