Self Help Groups
We believe that the full potential of our watershed work can only be realised if it is supplemented by a microfinance programme. This is essential if we are to ensure long-term livelihood security to the poor. We are also convinced that no microfinance programme can be successful until it is tied up with livelihood programmes such as agriculture, dairying, marketing etc. Thus, microfinance and livelihood programmes are complementary to each other and their simultaneous implementation is the key to poverty alleviation. Incomes raised through livelihood initiatives need to be saved. Of these women are the best custodians. These savings must be reinvested in livelihood options that in turn raise incomes, setting up a virtuous cycle.
Our microfinance programme is based on the Self Help Group-Bank Linkage (SBL) model. Over the last four years, we have formed about 900 women’s Self-Help Groups (SHGs) with around 14,000 members. Most members of these SHGs belong to marginalised sections, such as the poor, Adivasis, Dalits, landless and displaced people. Our SHGs offer their members a range of financial products including interest on savings, recurring deposits, fixed deposits, loans against fixed deposits, loans for genuine needs and emergencies (the veracity of each of which is judged by the members themselves), loans for cattle and well construction, cattle insurance, life insurance etc. So far SPS SHGs have saved a total of Rs. 20 million and provided loans worth Rs.100 million to their members. Individual loans range from Rs. 3,000 to Rs. 30,000.
But the central goal of our SBL model goes beyond finance. It is the empowerment of these disadvantaged women who learn to run their own series of nested institutions – SHGs, Cluster Development Associations (of 15-20 SHGs) and Federations (of around 200 SHGs).
The persistence of endemic poverty and hunger six decades after independence points to the glaring lack of good governance in rural areas. It is our vision that Federations of these women’s SHGs will emerge as a key building block for effective empowerment of the poor in the tribal drylands of India, giving these regions the necessary voice in the development process. The members of these Federations will also be able to provide effective and capable leadership to Panchayat Raj Institutions, which we see as the centerpiece of governance in rural India. The unique strength of our SHG programme is financial and procedural discipline and transparency. It is mandatory for each group to go through an external audit every year, conducted by reputed chartered accountants. Thus, running SHGs is a great learning experience and allows these women a space to become powerful articulators of their perceptions and interests. They carry forward this strength into the panchayat arena.
In this extremely important task of nation building through people’s empowerment, public sector banks have a critical role to play. India has the largest banking network in the world. SHG Federations and banks in remote rural areas are complementary entities, whose existence depends on each other. Today, when the very existence of some of these public sector banks is under threat, Federations of SHGs can be a massive support to them. The credit extended by banks to SHGs is their lifeline. The repayment rate of SHGs is unprecedented. Therefore, if public sector banks become partners of Federations on a large scale, the financial situation of banks can also improve.
SPS Core Team members Rangu Rao and Animesh Mondal lead the SHG team.