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
99
The study also found that a considerable proportion of
SHG members were dependent on non-SHG loans for
consumption needs and an equally sizable proportion
availed non-SHG loans for farming needs at high rates
of interest.
4.8 STATUS AND ROLE OF
SHG FEDERATIONS
According to the estimates made by APMAS
12
as in
March 2013, there were 178,664 SHG federations in
the country. These included 171,511 primary federa-
tions (PLFs), 7,087 secondary federations (SLFs) and 66
tertiary federations (TLFs). Table 4.14 gives region-wise
data on various types of federations. It is estimated that
more than half (52 per cent) of the federations were in
the southern region. Federations were predominant in
Andhra Pradesh, Kerala, Tamil Nadu, Rajasthan and
West Bengal.
Government of India, state governments and their
projects implemented with external funding are the
major players in promoting SHG federations with
Andhra Pradesh in the lead. The number of government-
promoted SHG federations had increased from 93,773
in 2009 to 130,631 by 2013. With the impetus given by
the NRLM the total number of SHG federations in the
country is likely to reach 500,000 by 2018.
With regard to quality, self-management and sus-
tainability, there is still a long way to go as many SHG
federations are dependent on their promoters to meet
operational costs. In many states, SHG federations are
chanellizing various government schemes and benefits at
the risk of being co-opted by the government.
In order to mobilize savings SHG federations regis-
tered under MACS Act became quite common in Andhra
Pradesh. Many SHG federations have registered as societ-
ies, trusts, etc., which are not suitable for financial inter-
mediation, especially for mobilization of savings. Liberal
cooperative acts are seen as the more appropriate legal
form for financial intermediation, especially for SHG
federations.
SHG Federations, where promoted, faced difficulties
in leveraging loan funds from banks for financial inter-
mediation.
13
RBI included registered federations among
the agencies eligible to act as BCs
14
but banks have not
involved them in this role either. NABARD also does
not recognize MACS as financial intermediaries because
of doubts over their governance and management, their
limited assets and the past record of credit cooperatives.
However, due to the credibility of the promoting NGOs,
some MACS and other federations are getting loan
funds from banks through their parent organizations.
NABFINS is one institution that has come forward to
support self-reliant cooperatives which are functioning
as federations of SHGs. In Tamil Nadu bankers have is-
sued loans to panchayat-level Federations. It is likely that
the NRLM with its critical role for a federated SHG
structure could yet ensure a wider acceptance of federa-
tions in financial intermediation.
The RBI Circular on Priority Sector Lending—
Restructuring of SGSY as National Rural Livelihood
Mission (NRLM)—Aajeevika (RBI, 2013) indicates
that under NRLM a community investment fund (CIF)
will be provided to the SHGs in the intensive blocks,
routed through the village-level/cluster-level federations,
to be maintained in perpetuity by the federations. The
T
ABLE
4.14
Distribution of SHG Federations by Region (31 March 2013)
Region
NGO
Government
Total
PLF
SLF
TLF
Total
PLF
SLF
TLF
Total
PLF
SLF TLF
Total
Northern region
395
40
1
436 15,320
0
0 15,320
15,715
40
1
15,756
North-eastern region
300
4
0
304
1,205
0
0
1,205
1,505
4
0
1,509
Eastern region
27,970 2,757
2 30,729 17,180
453
39 17,672
45,150 3,210
41
48,401
Central region
3,611
149
0
3,760
3,459
0
0
3,459
7,070
149
0
7,219
Western region
1,073
4
0
1,077 10,539
315
0 10,854
11,612
319
0
11,931
Southern region
11,147
570
2 11,719 79,304 2,795
22 82,121
90,451 3,365
24
93,840
Union territories
8
0
0
8
0
0
0
0
8
0
0
8
44,504 3,524
5 48,033 127,007 3,563
61 130,631 171,511 7,087
66 178,664
