Amid the hype the Sangh Parivar created on conversions during the last leg of 2014, one issue that got undermined was the virtual scrapping of the self-help group (SHG) scheme. Under normal circumstances, the statement, which ironically came from a woman, entrusted with the responsibility of women and child development, against a scheme aimed at women empowerment, would have earned a lot of flak from women’s organisations. The government seems to have decided to modify the Rashtriya Mahila Kosh (RMK), a scheme providing credit facilities to NGOs for further lending to SHGs.
The revamped RMK is being restructured as a bank, which will not provide loans to SHGs but shall aim to train individual women. The move is seen as another initiative of the Modi government to rename existing schemes. However, it has wider implications.
The idea of micro-finance and self-help groups (SHGs) was devised by Dr. Mohammad Yunus, who started lending to women in a remote village in Bangladesh during his tenure as professor of economics at Chittagong University in 1974. He observed that even a small amount given to the poor had a considerable impact on their livelihood.
Thereafter, he approached many banks for arranging funds for the poor but to no avail. Cash deprived as they were, the poor could not provide the collateral the banks demanded for securing loans. However, they somehow agreed to lend when Dr. Yunus offered himself as guarantor.
The activity continued for about a decade. Gradually, the number of beneficiaries increased and Grameen Bank was established in 1983. The idea spread like wild fire to other developing countries like India.
Even a developed country like the US followed suit and began seeing micro-finance as an effective means of eliminating poverty. In India, it all began when regional rural banks and cooperative banks failed to provide the much-needed financial inclusion to people living in remote areas.
A major section of the population could not even open bank accounts. Easy credit was something entirely unthinkable, as banks asked for security. The massive response to the Pradhan Mantri Jan Dhan Yojna is also a pointer to the lack of banking services the people in villages suffered from.
Statistically, more than 87 per cent of India’s poor do not have access to easy credit from banks. They take loans from money lenders, who charge interest ranging from 48 to 120 per cent per annum, which makes India one of the best places for micro-finance. In fact, the World Bank calls South Asia the “cradle of micro-finance” with India as a major player.
During the last three years, micro-finance institutions (MFIs) have raised `20 billion as equity and `240 billion as loan funds from banks. True, they also created some scams as in Andhra Pradesh. Nonetheless, a CRISIL report has predicted that the micro-finance sector is expected to grow at a compounded annual rate of 35 per cent with a net worth of Rs. 450 billion by March 2016. The predominant method of micro-credit in India is lending through SHGs. People, mostly women from same financial background affected by similar circumstances — experience, disadvantage or discrimination — join hands to support one another to change the existing circumstances.
They accumulate small savings, weekly or fortnightly, lend amongst themselves, discuss their problems while they meet and take steps to improve their financial, health and literacy conditions. The story of Shri Mahila Griha Udyog of Lijjat pappad fame is an excellent example of how SHGs help in transforming society. There are several cases of SHGs accumulating huge resources which are used even for technology transfer leading to employment and income generation. A study conducted by a group of researchers in 2008 showed a sea change in attitudinal and behavioural patterns of all SHG members in a village near Patna.
It also revealed that around 91 per cent of the members showed a significant change in their attitude towards socio-economic development, education and training, technology adoption, marketing and entrepreneurial qualities. They were found to be receptive to new ideas and adopted new methods of crop cultivation and irrigation after their long association with SHGs. Not only this, they were capable of resolving mutual disputes in an amicable manner without the intervention of panchayat.
Another study conducted on 214 SHGs in 108 villages in four different states concluded with similar results. Not only has the SHG model helped in empowering rural women, it has also helped in alleviating poverty.
Besides, they have also given a platform for women to actively participate in village activities, contest elections and address social evils like dowry, domestic violence against women, alcoholism, sexual harassment etc.
No doubt, SHGs have served as a harbinger of change. The hypothesis — “When a man wants a loan for a business, he goes alone, not with a
group; the idea of women having to take along 10 other women to seek a loan is degrading” — is baseless. After all, nothing prevents a woman from seeking a loan as an individual.
It seems the government has forgotten that SHG formation is not merely about lending and repaying. It is also about rising above societal limitations, promoting socio-economic development, communal harmony and eradicating social evils. The non-economic benefits of SHGs like improved self-esteem of women, increased decision-making power, expanded social and business networks are much more than the lending programme itself.
Besides, a collective and concerted voice is not only heard but is also more effective than a single frail voice, which no one will even take note of in a patriarchal society like ours. It is an established fact that a message has relatively less impact when communicated to an individual, compared to a group. Actually, the government should take effective steps to explore the full potential of SHGs. Studies suggest that SHG as an instrument of change is still in its nascent stage in India. Treating women on an equal pedestal with men in a male-dominated society, where they are not even allowed to step out of their house, is an entirely naïve approach. One can only hope that the government will take note of the unique treatment that a woman deserves while devising any policy to empower her.
The writer is a company secretary and director, communications, Deepalaya, and can be reached at jassi.rai@gmail.com