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Emerging Trends in Financing the Poor Women through SHG-Bank Linkage Approach and Women Empowerment ________________________________________________________________________________________________

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National Seminar on “Emerging Trends in Management & Information Technology” (ETM&IT-2016) ISBN. 978-93-81692-07-2, Rourkela Institute of Management Studies, Rourkela, 20^th February, 2016

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Emerging Trends in Financing the Poor Women through SHG-Bank Linkage Approach and Women Empowerment

1Susanta Kumar Patro, ²Arun Kumar Panda

1Asst. Professor, Dept. of MBA, VITAM, Berhampur

2Reader, Dept. of Business Administration, Berhampur University, Berhampur

Abstract : Microfinance is emerging as a powerful instrument for poverty alleviation in the new economy. In India, Microfinance scene is dominated by Self Help Group (SHGs)-Bank Linkage Programme as a cost effective mechanism for providing financial services to the Poor.

This programme which has been successful not only in meeting financial needs of the rural poor women but also strengthen collective self help capacities of the poor, leading to their empowerment. Rapid progress in SHG formation has now turned into an empowerment movement among women across the country.

Empowerment provides a greater access to knowledge and resources, more autonomy in decision making, greater ability to plan lives, more control over the circumstances which influence lives, and freedom from customs, beliefs and practices. Empowerment is an active multidimensional process to enable women to realize their identity and power in all spheres of life. This paper highlights the progress of SHG-Bank linkage programme and examines the impact of micro finance with respect to socioeconomic empowerment of rural women. An effort is also made to suggest the ways to increase women empowerment.

Keywords: Self Help Group (SHG), Bank Linkage Model, Trend, Progress, Women Empowerment, Micro finance

INTRODUCTION

In India, where poverty still remains a major problem with around 400 million people forming about 45 per cent of the population living below poverty line. And the rural population is a major population segment in India.

According to the Census of India 2011, 72.22 percent of the total population is rural and about 200 million people do not have any access to formal credit. It has also been observed that the socio, economic and political status of women in rural areas is very low. But the development of the country cannot be total without the development of rural women which constitutes major chunk of the population. Concept of „Bharat Nirman‟, „Shining India‟, „Feel Good‟, „Rainbow‟, „Socio-Economic Development‟, „Main Stream‟, „National Building Process‟,‟ Grass Root Administration , „Good Governance‟, „Digital India‟ and ‟Start up India‟ is not possible without participation and empowerment of rural downtrodden women.

Further, the limitations of the formal and informal financial sectors in providing financial services to the poor women and failures of the government initiated anti-poverty programmes have led to emergence and extension of microfinance programme in the developing country like India.

Microfinance is a provision of small amounts of institutional loan to lower income people who could not access loans from formal sector. Self-Help Group (SHG) approach of microfinance promoting people‟s organizations and functioning as feeder-banks linking under served rural poor. Major objective of extending the loans is to alleviate poverty by creating jobs and incomes. While reducing poverty micro finance services are supposed to build asset base to their clients to manage and cope up with risks. Microfinance programmes are also expected to empower women clients by improving their decision making roles and self esteem, among others.

SHGs for women are informal groups of 10-20 women from homogenous group who come together for addressing common problems. The concept of Self Help Groups (SHGs) is proving to be a helpful platform for the empowerment of women. SHG is an organization of rural poor, particularly of women that deliver micro credit to undertake the entrepreneurial activity. Rapid progress in SHG formation leads to participation in income generating activities helps in the overall empowerment of women. Empowering women through education, ideas, consciousness, mobilization and participatory approach can enable them to take their own decisions, make them self-reliant and self-confident. It provides the benefit of economies of scale, collective learning, and democratic culture and provide platform for dialogue and Co-operation.

WOMEN EMPOWERMENT

Empowerment is a term that is widely used,

“Empowerment is a process and not therefore, something that can be given to people. It is the process of enabling or authorizing an individual to think, behave, independent in taking own decision and control work in an autonomous way. It can be viewed as a means of creating a social environment in which one can take decisions and make choice either individually or collectively for social transformation. It strengthens innate ability by way of acquiring knowledge power and experience.

STATUS OF SHG IN INDIA

The growth of self help groups in India is shown in the table1 given below.

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20 TABLE 1: NUMBER OF SHGS IN INDIA (2005-06

TO 2013-14)

Year Number of SHGs Growth Rate

2005-06 22,38,565 109.47

2006-07 41,60,584 30.66

2007-08 50,09,794 71.28

2008-09 61,21,147 22.2

2009-10 69,53,250 13.6

2010-11 74,61946 7.31

2011-12 79,60,309 6.67

2012-13 73,17,551 -8.07

2013-14 74,29,500 10.15

Source: Status of Microfinance (NABARD Report) 2005-06 to 2013-14

It is shown that how the number of SHGs are increased in the period 2005-06 to 2013-14. In 2004-05, 10, 68,697 SHGs were linked with the banks. In 2005-2006 the number of SHGs has been increased by 109.47 growth rate i.e. 22, 38,565. In the year 2006-07 growth rate was 30.66, in 2007-2008 growth rate was 71.28 in 2008-09 growth rate was 22.2 in 2009-10 Growth rate is 13.6 in 2010-11 Growth rate is 6.67 in 2011-12 Growth rate is declined to -8.07 and in 2013-14 Growth rate is 10.15.The variation is greater in growth rate.

The table 2 and 3 given below shows the progress of women SHGs during 2011-12 and 2012-13.

TABLE 2: PROGRESS OF WOMEN SHGS AS ON 2011-12

Particulars

Total SHG’s (Lakh)

Women SHG’s (Lakh)

% of Women SHG’s to Total

SHG’s

Total Amount

(Crore)

Women SHG’s Amount (crore)

% of Women SHG’s Amount to Total SHG’s

Savings Linked SHG‟s 79.60 62.98 79.12 6551.41 5104.32 77.91

Loan Disturbed 11.48 9.32 81.18 16534.76 14132.02 85.46

Loan Outstanding 43.54 36.49 83.80 36340.00 30465.28 83.83

Source: Status of Micro Finance 2011-12, NABARD

Particulars

SHG’s

(Crore)

Women SHG’s Amount

(crore)

% of Women SHG’s Amount to

Total SHG’s

Loan Disturbed 12.20 10.37 85.0 20585.36 17854.31 86.7

Source: Status of micro Finance 2012-13, NABARD Current Position of Women SHGs in India (2013-14) The SHG-bank linkage programme in India today is the largest microfinance programme in the world. The SHG- bank linkage programme is the flagship microfinance intervention mechanism of NABARD. The launching of its pilot phase in February 1992 could be considered as a landmark development in the annals of banking with poor.

This programme has become a well known instrument for bankers, developmental agencies and even for corporate houses. SHGs are not only limited to providing financial services but also they have turned out to be focal point for purveying various services to the poorest of the poor in many ways. With the help of this, SHG programme has become the common vehicle in the development process.

The NABARD launching of its pilot phase by linking 255 SHGs with banks in February 1992 could be considered as a landmark development in the annals of banking with poor. As of March 2013, the programme covered more than 7.42 million SHGs that was bank linked. The linkage

programme has managed to involve participation of diverse stakeholders consisting of 768 banks and partnered with over 4800 NGOs from different parts of India. As the programme is continuously expanding its outreach, which is very desirable feature, the expanding outreach has thrown up to save and access to credit.

The table 4 shows the current position of women SHGs in India. The details of total number of women SHGs shown saving linked, credit linked and loans outstanding for the last two years are given in the table. It may be seen that the total number of saving linked and credit linked SHGs, exclusive women SHGs with banks were 84.14 percent and 84.33 percent, respectively. Further the percentage of loans outstanding of exclusive women SHGs to loans outstanding of total SHGs which was 83.40 percent as on 31st march 2013 has increased to 84.21 percent as on 31st march 2014. It shows that majority SHGs are women groups their participation in saving and credit is increasing out of total number of SHGs.

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Particulars

SHG’s

(Crore)

Women SHG’s Amount (crore)

% of Women SHG’s Amount to Total SHG’s

Loan Disturbed 13.66 11.52 84.33 24017.35 21037.97 87.59

Source: Status of micro Finance 2013-14, NABARD All the above tables reveal the progress of women SHGs during the year 2011-12, 2012-13 and 2013-14. It indicates that SHGs during the year 2012- 13 has been slowed down as compared with the year 2011-12. But in the year 2013-14 the progress has been again restored and the number of SHGs increased over the previous year.

SHG AND ITS IMPACT ON WOMEN EMPOWERMENT

Micro-credit Programmes through SHG is indeed an effective weapon in the war against rural poverty. It has been advocated as new panacea for reduction of poverty among women. Its potential for economic empowerment of women has also been variously locked at. World Bank Resource Book mentioned, In India, Microfinance scene is dominated by Self Help Group (SHGs)-Bank Linkage Programme as a cost effective mechanism for providing financial services to the “Un- reached Poor” which has been successful not only in meeting financial needs of the rural poor women but also in strengthening collective self help capacities of the poor leading to their empowerment. The results of the study also show that microfinance programme has empowered women economically, socially, psychologically and politically. In a study (MYRADA, 2002) it is also found that the mature group participants are more empowered as compared to the young and middle age group participants. Rapid progress in SHG formation has now turned into an empowerment movement among the poor especially women across the country.

SUGGESTIVES MEASURES

It is realized that, microfinance through SHG is a means or an instrument for women empowerment, not an end itself. Though, development polices and performances have created a positive impact on the SHG in the society, they are facing many problems and difficulties in making groups and lending financial support from banks and financial institutions. In order to enforce effectiveness of micro credit for better sustainability and continuity, it is suggested that

a) Most of the members of the SHG are illiterate and innocent. Hence, efforts are to be given to educate them by establishing non-formal education centres in each area for providing basic education.

b) They have no knowledge about the SHG.

Therefore, there is a need to make occupational training an integral part of microfinance programme.

c) Comparatively higher interest rate charged by the micro finance institutions has again became a contentious issue.Therefore, the system should be developed and the apex financial institution should provide concessional loans to the retail level financial institutions to ensure that the poor people will get loans at low rate of interest.

d) The amount sanctioned under the scheme is often inadequate for economic viability of the group.

Therefore, it should be raised to a viable level.

e) Mostly the poor are vulnerable to financial shocks. To help the poor to cross the poverty line a provision of insurance under the microfinance programme is very essential. As per the general system of microfinance, they do not cover the insurance risk.

So, action should be initiated to provide provision of insurance under the microfinance programme.

CONCLUSION

It can be said that SHG is an effective instrument to empower women socially and economically which ultimately contributes in the overall development of the country like India wherein still large segment of women population are underprivileged, illiterate, exploited and deprived of basic rights of social and economic spectrum.

Women are very important segment in development at local to global levels. Economic independence and education of women will go a long way in attaining self reliance of women. Experience, awareness, education and competence, willingness, confidence, self motivation, encouragement from family and society contribute to empowerment of rural women. As a group- oriented model, SHGs in India is a mechanism for women's development to bring in individual and collective empowerment through improvement in both condition and position of women. Several factors and strategies have been provided by the SHGs that have made a positive contribution to the empowerment of women. As a result, the numbers of SHGs have been increasing day by day. Thus SHGs have been showing the way ahead to alleviate the poverty of India along with women empowerment.

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REFERENCES:

[1] Web site: www.nabard.org

[2] MYRADA (2002), Impact of Self Help Groups (Group Processes) on the Social/ Empowerment Status of Women Members in Southern India, Microcredit Innovations Department, National Bank for Agriculture and Rural Development, Mumbai.

[3] World Bank Resource Book

[4] Arjun Y., Pangannavar (2010) "Women SHG Programmes and Rural Poverty: A Micro Study"

Southern Economist, pp47-50

[5] Abdul Raheem, aphyasmeen and solthana kissan (2007), World empowerment of women thought self help group a view sakthi sugans Ltd, p. 48 [6] Chandra P., Parida and Anushree Sinha (2010)

"Performance and Sustainability of Self Help

Groups in India: A Gender Perspective" Asian Development Review, Vol.-27(1), pp80-103.

[7] Jayaraman R. (2005) "Performance Analysis of Fisherwomen SHGs in Tamilnadu" final report submitted to NABARD, pp1-63.

[8] Jayanthi.C “Empowering Women”. Yojana, June 2001.

[9] Jan Messner, Ramkrishna and Marie Luie Haberberger , Good Practices in SHG Book- Keeping, Micro Finance in India edited by K.G.

Karmakar, Sage Publications. P, 275.

[10] Sen, A.K. & Nussbaum M.C. (ed.), 1993:

Capability and Well-Being, in the Quality of Life.

[11] Sukhbir Singh, SHG-Bank Linkage Programme:

Progress and Prospects (MF in India, by K.G Karmakar Sage Publications, 2008, pp. 113-116.

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