Self Help Groups (Microfinance)

Part of Deepak Foundation's Annual Report, 2001-2002

DCT's intervention in Microfinance dates back to 1994 when the first Self Help Group of women was formed. The policy environment, when we first started forming Self Help Groups (SHG) and today is markedly different. The impact of Microfinance as an intervention to increase the empowerment of poor women is recognized the world over. With NABARD taking the lead in promoting the concepts of Microfinance and Self Help Groups, the formal sector financial institutions today do see poor illiterate women and men as bankable and credit worthy. Thus today the situation is very different after the recognition and acceptance of the concept of Self Help Groups. The Self Help Group acts not only to reduce the transaction costs but it also is a source of peer pressure that helps in the collection of loan repayments. DCT has endeavoured for the last seven years to form Self Help Groups of women and in recent years of adolescent boys and girls as well as those of men. DCT has found it an effective strategy to increase the capacity of women and to increase their empowerment. DCT has also integrated this intervention with its other programs i.e. Sexual Health, Adolescent Development and Capacity Building of Women. For instance widows who are designated as HRB (High Risk Behaviour) are organized into Self Help Groups and encouraged to take loans and find alternate sources of livelihood. Adolescents who have undergone training under the UNFPA-GOI project for increasing their livelihood and life skills have also been organized into Self Help Groups, some of whose members have gone on to take loans related to the livelihood skill that they have acquired. Consequently the formation of Self Help Groups is very central to all of DCT's interventions. That these groups fulfill a felt need of the community for easy access to credit is demonstrated by the phenomenal growth in the number of SHGs in the past three years.

The total number of new groups formed in 2001 was 72, which brings the total number of SHGs to 146 comprising of a total membership of 2646. Among the 72 new SHGs that were formed, 44 are women's groups; 4 are men's groups; 17 are adolescent boy's groups and 6 are adolescent girls groups and 1 is a children's group. This brings the total number of Self Help Groups formed by DCT to 146. The total amount of savings done by all these groups in the year was Rs. 10,24,266. The total amount of loans disbursed (both NABARD and Internal) amounted to Rs. 16,57,650. Of this amount Rs.4, 17,500 are loans under the NABARD Self Help Group linkage scheme from the Bank of Baroda, Nandesari and the State Bank of India, Nandesari.

Details of SHGs formed by DCT

	Grps	Persons
Women's	112	2060
Men's	15	254
Adol. Boys	8	144
Adol. Girls	10	168
Children	1	20
Total	146	2646

The total number of persons who availed of these loans is 590, thus the average loan size is about Rs. 3,200. The largest amount, about 20% of the loan amount has been utilized for health purposes and the about 18% for house construction. The total amount of loan recovery this year has been Rs. 9,77,594. In the past year the total number of SHG meetings undertaken were 659. There is a major focus on training and it is an on-going process to build the capacities of the women to manage their groups themselves. We find that a lot of our time and effort goes into this process. The women in the community are largely illiterate and training them to maintain group accounts and become self-sufficient is a daunting task.

The last year has seen the formation of nearly 50% of our total number of Self Help Groups. This has raised many challenges for us. This intervention is largely non-funded (but for a small NABARD grant of Rs. 1.72 lakhs for a period of three years) and we have been managing the costs from internally generated funds. Thus there was a limit imposed on the number of staff we could hire. We have discovered that a large amount of staff inputs need to be given to these groups till they reach a stage of self-sufficiency and we found that we have a shortage of staff to deal such a large number of groups. That this program deals with the money of the community and that they have placed their trust in us makes it imperative that we have a very high degree of monitoring in this project. Our main challenge for the coming year is to find ways to increase the staff so that training inputs can be provided on an on-going basis to all the SHGs and to ensure that a very high degree of monitoring of the accounting process can be done. Trying to run the program on a skeletal staff (as we have been doing) is no longer going to be possible and we hope we are successful in our efforts to increase funding available for the management of these groups.