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Chapter 1
Title
Page No.
Introduction
1 - 14
Introduction, Inclusive Growth, Status of Women in India, Concept of Empowerment,
Microfinance, Self
Help Groups, Self-help groups and MicrofinanceHistory of Microfinance in India, Micro-Finance Institutional Structure in India, SHG Development in India: An Overview, Poverty in Karnataka. 2
Profile, Literature Review and Methodology
15 - 30
Indian Economy, Karnataka State, Profile of Bagalkot District, Profile of Jamakhandi Taluk; Overview of Literature, Methodology - Statement of the Problem, Conceptual Framework, Objectives, Hypotheses, Scope of the Study, Sample Frame, Indicators, Data Collection Techniques and Tools, Methods of Analysis, Study Area, Limitations of the Study.
3
Socio-Economic Profile
32 - 39
Family Profile – Education - Basic Amenities Occupational Structure - Income Level of households
i
4
Self-Help Groups [SHGs] Impact Assessment
40 - 60
A. Impact of SHGs on Economic Condition - Inception and Size of Groups, Motivation and Consistency of SHGs, Meetings, Member’s Awareness about Working of SHGs, Savings, Purpose of savings in SHGs, Average Bank Balance, Sources of Loan and its Utilization, Purpose of Loan, Repayment of Loan, Training Facility to the SHGs Members. B. Women Empowerment- Concept of Empowerment of Women, Comparison of Status. 5
Summary and Findings
61 - 68
Socio-Economic Background, Impact of SHGs on Women Empowerment; Findings, Recommendations and Ways Forward References
69 - 75
ii
Chapter – 1
Introduction You can tell the condition of a nation by looking at the status of its women. - Jawaharlal Nehru Introduction India's performance in recent years has been among the best in the world. The reforms initiated since the early 1990s have unshackled the economy. The long-term trend rate of growth has steadily increased from an average of 3.5 per cent a year between the1950s and 1970s, to above 9 per cent in 2006 and 2007. The
prowess
of
India's
IT
and
IT-enabled
services,
biotechnology,
pharmaceuticals, and various manufacturing segments is being recognized the world over. Its macro-fundamentals are sound and foreign exchange reserves are comfortable at around $250 billion (Arunachalam -2010). Growth may be higher in the last two decades but inclusive growth or equitable development has been missing. It is like running a train with engine only without connecting bogies and people to the engine (Dev, 2007). The income distribution has been unequal and only some sections of the population benefited more from higher growth and prosperity. The exclusion problems have not been seriously addressed by the government programmes and strategies. Exclusion continued in terms of low agriculture growth with increasing visibility in farmers' suicides, low quality employment growth, inadequate development of women and children, concentration of poverty and low human development both geographically and in terms of social categories, increase in rural-urban divides and regional disparities. The economic independence of the lower section is the key driver towards 1
eradicating this inequality and establishing an inclusive growth model. India's development agenda will need to be expanded to include not only the eradication of extreme poverty, but an inclusive growth strategy to address the legitimate concerns of this large segment of the population. Although the banking sector has made significant developments in many areas of their performance, there still exist large portions of the population which are yet to be brought under the umbrella of banking services. Financial inclusion efforts are essential to bring those portions of the population into the mainstream. This would enable banks to expand their market share but expand the overall market, in the process of tapping the Bottom of Pyramid (Boochra, A -2009). Nowadays poverty is a human condition that is more than mere material inadequacy. It is considered to be inadequacy of ‘capability’ and a condition of ‘disadvantage’. As an inadequacy of capability it is a condition of deprivation that results in making people incapable to fend and obtain their material as well as social entitlements needed for both subsistence and progress. The approach to poverty as a condition of ‘disadvantage’, identifies five types of disadvantages namely: ‘lack of assets’ covering material possessions (including resources), ‘physical weakness’ resulting from malnutrition and inadequate health care, ‘isolation’ resulting from information asymmetry – inability to access knowledge, ‘vulnerability’ due to social de facto absence of rights orchestrated structurally by centers of wealth and power and ultimately, ‘powerlessness’. In sum these modern approaches to the concept of poverty surely appear comprehensive consisting of “entitlements, empowerment, minority rights, protection of plural cultures and human development.” Anti-poverty policy prescriptions must visualize the condition of poverty and the poor in all dimensions and the process chosen and eventually implemented must accommodate all the sets of challenges. Lack of access to income opportunities or skill-based training opportunities keep many people shackled to poverty. Until and unless rural people are not brought into the mainstream for economic and social change, we will fail to bring change in rural 2
development. They need to be organized for the decision of their choices and voices. Prevalence of poverty is quite high among rural population. They need to be the main focus of any poverty alleviation program as they comprise a major section of the poor population. Among the poor, women are considered the most disadvantaged due to their limited access to economic opportunities and basic social services and the excessive burden of household chores on them.
Inclusive Growth People living in cities earn far more than those dwelling in rural areas. But that does not change the fact that over 600,000 villages in India are home to nearly 700 million people, the majority of whom live below poverty levels, are malnourished and merely survive. It is this population, very nearly forgotten by the power brokers, who need to be brought into the development scheme. They must be given the option of living and working on jobs in non-agricultural sectors, jobs that guarantee the basic subsistence for themselves and their families. Our planners becoming conscious of the need for inclusive development as the approach paper on the eleventh five year plan is titled "Towards faster and more inclusive growth". It reflects the need to make growth more inclusive in terms of benefits flowing through more employment and income to those sections of society which have been left out of the economic growth witnessed in recent years. No growth can be inclusive unless it takes adequate care of women and children. 'Inclusive growth' is a process, in which, economic growth, measured by a sustained expansion in GDP, contributes to an enlargement of the scale and scope of all four dimensions namely – opportunity, capability, access and security. Poverty alleviation with micro credit is now well recognized all over the world. The United Nations’ Millennium Declaration (2000), which spelt out the Millennium Development Goals (MDGs), poverty reduction – has assumed prominence in the international sphere. This has been supplemented by multilateral development agencies specially the World Bank where in its World 3
Development Report (WDR) it has evolved workable strategies for the time bound objectives enunciated in the Millennium Declaration (UNCDF-2005). This kind of wide and inclusive approach by the international community to understand poverty and poverty reduction is clearly sees the link between ‘poverty and mainstream processes’. Rural Finance Access survey, 87 percent of the poorest households surveyed (marginal farmers) do not have access to credit, the rich pay a relatively low rate (33 percent), the poor pay rates of 104 percent and get only 8 percent of the credit.
Status of Women in India Gender discrimination continues to be an enormous problem within Indian society. Traditional patriarchal norms have relegated women to secondary status within the household and workplace. This drastically affects women’s health, financial status, education, and political involvement. Women are an integral part of every economy. All round development and harmonious growth of a nation would be possible only when women are considered as equal partners in progress with men. The role of women in the India’s economic growth and development is inevitable. Women’s role in the fields like social, institutional, political and at family level has taken a pivotal role. According to Census 2011, India population is constituted by 48.52 per cent women population, due to this only there was a need for the women empowerment as these women has been exploited from ancient time till today. India has a unique diversified culture, basically male dominated nation. In India we find people from diversified backgrounds on the basis of various languages, religions, castes, traditions and male-female disparity from primeval period. Supportive to this we can also find the exploitation women in every walk of life in our history. We worship women in the form various goddesses but in reality never given equality to the women. In our society, women are identified as second citizen of the country. According to Ram Moha Lohiya,
4
‘among exploited groups, women are most exploited. Gender disparity has become a major problem for a country now; this has affected women life adversely. Women in India from the ancient time till today are subjected to inequality, ill health, infant mortality, illiteracy, injustice, family exploitation, blind beliefs, physical harassment etc. In the modern days government has provided many facilities to the women, by using it many women are shouldering responsibilities with men in various fields like – education, politics, medicine, art, music, dance, science and army etc. and proving that they are no less than men’s. To give an examples of the success stories of the women- Indian nightingale Sarojini Naidu, Campton Laxmi Sahegal, Humanitarian Nobel peace prize winner Mother Teresa, Well-known politician Indira Gandhi, Everest pick climber Bajendri Pal, First women sat lighter Kalpana Chawla and Sunita Williams, First IPS officer Kiran Bedi, First KSRTC bus driver in Karnataka Ningamma, Mother of education in modern India-Savitribai Phuley, Indira Gandhi Prize winner-Ila Bhatt and many more women have achieved remarkably in their respective fields. These are the indication to the male dominated society that the position of women has improved as compared to the ancient period.
Concept of Empowerment Empowerment is a multi-dimensional social process that helps people gain control over their own lives communities and in their society, by acting on issues that they define as important. Empowerment occurs within sociological psychological economic spheres and at various levels, such as individual, group and community. Empowering women puts the spotlight on education and employment, which are an essential element to sustainable development. Microfinance for the poor and women has received extensive recognition as a strategy for poverty reduction and for economic empowerment. The concept of empowerment is defined as the process by which women take control and ownership of their choices The core elements of empowerment have been defined 5
as agency (the ability to define one’s goals and act upon them), awareness of gendered power structures, self-esteem, and self-confidence (Kabeer, 2001). Empowerment can take place at a hierarchy of different levels– individual, household, community and societal – and is facilitated by providing encouraging factors (e.g. exposure to new activities, which can build capacities) and removing inhibiting factors (e.g. lack of resources and skills). In this connection Microfinance with Self Help Groups play an effective role for promoting women empowerment. Credit for empowerment is about organizing people, particularly around credit and building capacities to manage money. The focus is on getting the poor to mobilize their own funds, building their capacities and empowering them to leverage external credit. Perception women are that learning to manage money and rotate funds builds women’s capacities and confidence to intervene in local governance beyond the limited goals of ensuring access to credit. Further, it combines the goals of financial sustainability with that of creating community owned institutions. People need access to cash to cover the high cost of living in urban areas than rural areas. Self-help group approach is the key element in social mobilization. The microfinance project intervention in terms of formation and stabilization of SHGs by extending credit support and promotion of thrift to promote viable economic activities.
Microfinance In India with a large rural, agro-dependant population, microfinance has emerged as a viable means of economic up-liftment. Microfinance, originally developed as small loans for the poor, has expanded to an array of financial products such as savings, insurance, housing finance and remittance mechanisms in addition to credit. This phenomenon has also been called ‘financial inclusion’. Microfinance combined with livelihood opportunities and access to information services could work better to combat poverty. This next step of adding livelihood 6
development and services to financial inclusion is ‘inclusive growth’. Financial inclusion is integral to the inclusive growth process and sustainable development of the country (Mukherjee, P -2010). Microfinance in India comes in two broad flavours: the home-grown self-help groups (SHGs), and the Microfinance Institutions (MFIs) that are typically “replicators”. Indian microfinance covers several million borrowing clients, and is amongst the fastest growing globally (Bhura, P. K -2010). Microfinance is not a panacea which removes poverty in one go, nor is it a new form of money lending to exploit the poor (Mahajan, V -2010). While penetration into unbanked populations does indeed further the government’s objective of ‘financial inclusion’, access to finance, by itself, does not ensure alleviation or eradication of poverty (Parambi, R -2008). 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 strengthen collective self-help capacities of the poor, leading to their empowerment. The focus is on getting the poor to mobilize their own funds, building their capacities and empowering them to leverage external credit. In the early 1990s the National Bank for Agriculture and Rural Development (NABARD) started on a new nationwide microfinance initiative that links banks, NGOs and informal local self-help groups (SHGs). The Government of India had ushered in the new millennium by declaring the year 2001 as Women's Empowerment Year. A lot of programmes with fancy names: Swashakti and Stree Shakti for women's empowerment through micro-credit programmes.
History of Microfinance in India In India, institutional credit agencies (banks) made an entry in rural areas initially to provide an alternative to the rural money lenders who provided credit support, but not without exploiting the rural poor. There are 3 main factors that count to the bringing up of Microfinance as a Policy in India 7
• The first of these pivotal events was Indira Gandhi’s bank nationalization drive launched in 1969 which required commercial banks to open rural branches resulting in a 15.2 per cent increase in rural bank branches in India between 1973 and 1985. Today, India has over 32,000 rural branches of commercial banks and regional rural banks, 14,000 cooperative bank branches. • The second national policy that has had a significant impact on the evolution of India’s banking and financial system is the Integrated Rural Development Program (IRDP) introduced in 1978 and designed to be ‘a direct instrument for attacking India’s rural poverty.’ This program is interesting to this study because it was a large program whose main thrust was to alleviate poverty through the provision of loans and it was considered a failure • The last major event which impacted the financial and banking system in India was the liberalization of India’s financial system in the 1990s characterized by a series of structural adjustments and financial policy reforms initiated by the Reserve Bank of India (RBI). The systems and procedures of banking institutions was emphasizing on complicated qualifying requirements, tangible collateral, margin, etc., that resulted in a large section of the rural poor shying away from the formal banking sector. The banks too experienced that the rapid expansion of branch network was not contributing to an increasing volume of business to meet high transaction costs and risk provisioning, which even threatened the viability of banking institutions and sustainability of their operations. At the same time, it was not possible for them to allow a population of close to 300 million - even if poor - to remain outside the fold of its business. The search for an alternative mechanism for catering to the financial service needs of the poor was thus becoming imperative.
8
Micro-Finance Institutional Structure in India The different organizations in this field can be classified as "Mainstream" and "Alternative" Microfinance Institutions (MFI).
Mainstream Microfinance Institutions: NABARD, Small Industries Development Bank of India (SIDBI), Housing Development Finance Corporation (HDFC), Commercial Banks, Regional Rural Banks (RRBs), the credit co-operative societies etc. are some of the mainstream financial institutions involved in extending microfinance.
Alternative Microfinance Institutions: These are the institutions, which have come up to fill the gap between the demand and supply for microfinance. MFIs were recently defined by the Task Force as "those which provide thrift, credit and other financial services and products of very small amounts, mainly to the poor, in rural, semi-urban or urban areas for enabling them to raise their income level and improve living standards."
Self Help Groups Despite vast expansion of the formal credit system encompassing spheres of social and mass banking, the dependence of the poor on moneylenders still continues in many areas, especially for meeting their emergent needs. Under the circumstances, a non-formal agency for credit supply to the poor, in the form of Self Help Groups, emerged as a promising partner to the formal credit system. SHGs are part of micro credit. Nobel peace prize winner, Economics Professor from Chittagong University of Bangladesh Dr. Muhammad Yunus introduced concept of Self-help groups in the world for the first time. Over a period of time they were converted in to Grameen Bank and working for the empowerment of women.
9
The expansion of SELF-HELP GROUP is as below: S-Saving
E-earning
L-learning
F –friendship
H-Honestly E-Economy
L-Leadership
P-Production
G-Growth
O-Opportunities
U- Unity
R-Resources
P –Progress
In India, Self Help Groups represent a unique approach to financial intermediation. The approach combines access to low-cost financial services with a process of self-management and development for the women who are SHG members. NABARD defines it as a group of 20 or less people from a homogenous class who are willing to come together for addressing their common problems. They make regular savings and use the pooled savings to give interest-bearing loans to their members. The process helps them imbibe the essentials of financial intermediation including prioritization of needs, setting self-determined terms for repayment, and keeping books and records. It builds financial discipline and credit history that then encourages banks to lend to them in certain multiples of their own savings and without any demand for collateral security. The main objectives of these groups are- women empowerment in the selected area, to develop ability and self-confidence among the members, develop the habit of saving, give awareness about the financial matter, collective leadership, collective responsibility and promote self-employment. They elect one person as a president for the smooth functioning of the group. The uniqueness of these groups lies in the fact that to a large extent they are self-supporting self-governing organizations free from bureaucratization and politicization. The process empowers the poor and enables them to control direction of own development by identifying their felt needs. The SHG movement added a very significant dimension as it was to be linked with the microfinance. Microfinance (MF) has now been widely accepted as an effective intervention strategy for poverty alleviation, which is easily accessible to the poor, reduces transaction cost and where repayments are designed to fit cash flow for the borrowers. The focus is on getting the poor to mobilize their own funds, building 10
their capacities and empowering them to leverage external credit. Self-help group approach is the key element in social mobilization. The microfinance project intervention; in terms of formation and stabilization of SHGs by extending credit support and promotion of thrift to promote viable economic activities. SHG combines the goals of financial sustainability with that of creating community owned institutions. People in urban area needs more access to cash to cover the high cost of living than in rural areas. The microfinance project intervention in terms of formation and stabilization of SHGs contributes to extending credit support and promotion of thrift so as to promote viable economic activities. In this connection Micro-finance with Self Help Groups play an effective role for promoting women empowerment.
Self-help groups and Microfinance Self-help groups and microfinance are very closely linked, in that the former is used as a medium to generate and distribute financial capability so as to help deprived people to move up the income ladder. In fact self-help groups are one of the models of microfinance that is very popular in India. They come together for addressing their common problems. They are encouraged to make voluntary thrift on a regular basis pooled resources to make small interest bearing loans to their members. The process helps them imbibe the essentials of financial intermediation including prioritization of needs, setting terms and condition, and accounts keeping. This gradually builds financial discipline in all of them. They also learn to handle resources of a size that is much beyond individual capacities of any of them. The SHG members begin to appreciate that resources are limited and have a cost. Once the groups show this mature financial behaviour, banks are encouraged to make loans to the SHG in certain multiples of the accumulated savings of the SHG. The bank loans are given without any collateral and at market interest rates. The groups continue to decide the terms of loans to the members. Since the groups own accumulated savings are part and parcel of the aggregate loans made by the 11
groups
to
their
members,
peer
pressure
ensures
timely
repayment
(NABARAD -2005). In cases where groups have been given a reasonable operating shape by promotional agencies like non-government organizations, and an SHGs thus formed is stabilized, it is possible to introduce external funds. Ultimately the single most important quality of the self-help groups that help to sustain it as well as its activities and help its members to obtain capabilities is its voluntary nature (Satish, P - 2005).
SHG Development in India: An Overview While the term ‘self-help group’ or SHG can be used to describe a wide range of financial and non-financial associations, in India it has come to refer to a form of Accumulating Saving and Credit Association (ASCA) promoted by government agencies, NGOs or banks. These groups manage and lend their accumulated savings and externally leveraged funds to their members. SHGs have varied origins, mostly as part of integrated development programmes run by NGOs with donor support. The major programme involving financial intermediation by SHGs is the SHG-bank Linkage Programme. This Programme was launched in 1992 by National Bank for Agriculture and Rural Development (NABARD), the apex bank for rural development in India. By March 2002, the programme covered 7.8 million families with 90 per cent women members. Ontime repayment of loans was over 95 per cent for banks participating in the programme. It also involved 2,155 non-government organizations (NGOs) and other self-help promoting institutions. NABARD’s corporate mission is to make available microfinance services to 20 million poor households, or one-third of the poor in the country, by 2008. However, there is at present a high degree of concentration in the southern states, with just two states, Andhra Pradesh and Tamil Nadu accounting for more than 66 per cent of the SHGs linked to banks. The outreach of SHG-bank linkage may seem impressive, but in the context of the magnitude of poverty in India and the flow of funds for poverty alleviation, it 12
represents a very small intervention. Only about one-third of the SHG members are able to access loans out of external funds in the initial years. Thus of 4.5 million families covered by March 2001, only 1.5 million would have received a loan of an average of Rs. 3,000 at present. Disbursements under the povertyfocused self-employment programme Swarna Jayanti Swarozgar Yojana (SGSY), meant for families below the poverty line, were Rs. 642.34 crores during 2000-2001, as against Rs. 250.62 crores under bank linkage. Nowadays there is active participation from both government and non-governmental organization in women empowerment. Among various institutions Self-help groups are playing vital role. Many government programs have failed to empower the women, in this scenario the ‘strishakti’ program for the empowerment of the women. This program was started in Tamil Nadu for the first time on 18th October, 2000. This program also implemented in Karnataka in the same year. This program emphasizes on the formation of self-help groups, savings; motivation for self-employment, training for rural women, motivation for women development, provision of loan facility, protection of environment and enhance the social responsibility among the women. The details of self-help groups in India have been depicted in Table-1.1.
Table-1.1 Overview of Self-help groups in India S.
Years
No. of SHGs
1
2006-07
2
2007-08
3 4
Repayment
Savings
Loan
29,24,973
41,60,584
6570 39
3273.03
50,09,794
50,09,794
8849.26
4816.87
2008-09
61,21,147
63,21,147
12253.15
5861.12
2009-10
69,59,250
69,53,250
14453.30
6251.08
5
2010-11
74,62,300
70,16,300
14547.73
1667.34
6
2011-12
79,60,000
65,51,410
16534.77
3634.00
N
Source: NABARD Report 13
of Debt
Table 1.1 indicates that the number of SHGs are continuously increasing over the years, for instance it was 29, 24,973 in 2006-07 rose to 79,60,000 in 2011-12, increased about three time during this period. Whereas, the saving mobilized and loans advanced were fluctuating over the years and average repayment of loans were also fluctuating. At the end of August 2011, there were 1, 33,286 self-help groups exists in Karnataka, there were 19, 82,745 women members in these groups, among them 90,798 ST, 1, 54,478 SC and OBC 12, 44,328 members. The punch line of self-help is that ‘All for one and one for all’, If we Live together we will stand, if divided we will fall, these are the principles of cooperation under which the self-help groups works. Apart from NABARD, about half a dozen other apex bodies or wholesalers provide loans to financial intermediaries for on-lending to SHGs. These include the Small Industries Development Bank of India (SIDBI), Rashtriya Mahila Kosh (RMK), Housing and Urban Development Corporation (HUDCO), Housing Development Finance Corporation (HDFC) and Friends of Women’s World Banking (FWWB). Donors and banks, including Rabo bank, also provide grants and loans to microfinance institutions (MFIs) for on-lending to SHGs and federations of SHGs. The leading SHG-promoting NGOs constitute a mixed group that includes both pure SHG promoters as well as NGOs operating as MFIs. They have developed a variety of institutional arrangements, including cooperatives, to provide access to financial services to the poor, particularly women.
Poverty in Karnataka According to the Planning Commission of India, the poverty ratio based on Uniform Recall period is 27.5 per cent for the whole country, 28.3 per cent for rural areas and 27.5 per cent for urban areas. On the basis of poverty line relevant to Karnataka, 20.8 per cent of the rural population i.e. 75. 05 lakh persons (Poverty Line: Rs. 324. 17/-) and 32.6 per cent of the urban population; i.e. 63. 83 lakh persons (Rs. 599. 66/-) are below the poverty line. It can be observed that although 14
in absolute numbers there are less number of urban poor compared to the rural poor, the percentage of the urban population being poor is greater than the percentage of the rural population being poor.
This could imply two trends
namely, (a) greater income and wealth disparity in urban than in rural Karnataka and (b) possibility of a high migrant component in the urban poor of the state. In a socio-economic sense this can be visualized in the emergence of slums in the city amidst the flashy cosmopolitan wealth pie consequent to the boom in information technology as well as the service industry of which the state of Karnataka boasts. This ultimately indicates what Charles Sackrey opines to be, “-- the most offensive characteristics of a social order which claims to itself and to a world audience to have discovered the true path to material welfare.”
15
Chapter – 2
Profile, Literature Review and Methodology Indian Economy Home to about 1.21 billion people as of 2011, India constitutes approximately one sixth of the world’s total population. It is the world’s largest democracy and a key emerging market alongside China and Brazil. The picture of growing GDP and rising foreign investments shows an environment where wealth is increasing for the nation. Due to its large size and population of around 1000 million, India's GDP ranks among the top 15 economies of the world. However, around 300 million people or about 60 million households, are living below the poverty line. It is further estimated that of these households, only about 20 percent have access to credit from the formal sector. Additionally, the segment of the rural population above the poverty line but not rich enough to be of interest to the formal financial institutions also does not have good access to the formal financial intermediary services, including savings services. A group of micro-finance practitioners estimated the annualized credit usage of all poor families (rural and urban) at over Rs 45,000 crores, of which some 80 percent is met by informal sources. This figure has been extrapolated using the numbers of rural and urban poor households and their average annual credit usage (Rs 6000 and Rs 9000 pa respectively) assessed through various micro studies.
Karnataka State Karnataka (Kannada:
) is a state in the southern part of India. It has
created on November 1, 1956, with the passing of the States Reorganization Act. 16
Originally known as the State of Mysore, it was renamed Karnataka in 1973. Karnataka is bordered by the Arabian Sea to the west, Goa to the northwest, Maharashtra to the north, Andhra Pradesh to the east, Tamil Nadu to the southeast, and Kerala to the southwest. The state covers an area of 74,122 sq mtr (1, 91, 976 km), or 5.83 per cent of the total geographical area of India. It is the eighth largest Indian state by area, the ninth largest by population and comprises 30 districts. Kannada is the official and most widely spoken language. Though several etymologies have been suggested for the name Karnataka, the generally accepted one is that Karnataka is derived from the Kannada words karu and n d u, meaning elevated land. Karu nadu may also be read as Karu (black) and nadu (region), as a reference to the black cotton soil found in the Bayaluseeme region of Karnataka. The British used the word Carnatic (sometimes Karnatak) to describe both sides of peninsular India, south of the Krishna River. With an antiquity that dates to the Paleolithic, Karnataka has also been home to some of the most powerful empires of ancient and medieval India. The philosophers and musical bards patronized by these empires launched socioreligious and literary movements which have endured to the present day. Karnataka has contributed significantly to both forms of Indian classical music, the Carnatic (Karnataka Music) and Hindustani traditions. Writers in the Kannada language have received the most number of Jnanpith awards in India. Bangalore is the capital city of the state and is at the forefront of the rapid economic and technological development that India is experiencing. Karnataka has a rich heritage with its special geographical location, of natural resources like rivers, hills, valleys, plains, forests and other resources. The state is known for its tourist and industrial potential. Karnataka has also rich religious and artistic traditions. The state of Karnataka confined roughly within 110.35 North and 180.30 North latitudes and 750.5 East and 780.55 East longitudes. It is located in the western part of the Deccan peninsular region of India. The state is bounded by Maharashtra and Goa States in the North and Northwest; by Arabian Sea in the 17
West; by Kerala and Tamil Nadu States in the south and by the state of Andhra Pradesh in the East. The state extends to about 750 km from North to south about 400 km from East to West. Karnataka's total land area is 1, 91,791 sq. km. It accounts for 5.83 percent of the total area of the country (32, 87,240 sq. km) and ranks '8th' among major states of the country in terms of size. As per 2011 census, the state's population was 611.30 lakhs. Among different states Karnataka occupies 8th place with regard to population. The density of population was 319 persons per sq. km., which was lower than the all India density of 382 persons per sq. km. It ranks 13th in the country with regard to density of population. Among the existing 30 districts, Gulbarga district occupies the largest geographical area of the state with 8.46 percent of the state area and Bangalore district has the smallest area with only 1.14 percent of the state’s geographical area. Table - 2.1 Figures at a Glance, 2011 Census (India, Karnataka, Bagalkot District and Jamakhandi Taluk) Particulars No. of States/ Districts/Taluks/ Hoblies Area Total Population Decadal Growth Rate (1991-2001) Population Density Sex Ratio
Literacy
Units
India
Karnataka
Bagalkot
Jamkhandi
Number
28+7=35
30
09
03
Sq. Km. Persons
32,87,240 1,21,01,93,422
1,91,976 6,11,30,704
6575 1890826
1260 4,70,176
17.64
15.67
14.46
-
382
319
288
298
940
968
984
972
74.04 82.14 65.46
75.60 82.86 68.83
69.39 80.16 58.55
57.89 64.91 50.75
Percentage Per Sq.km. No. of Females per 1000 males Persons Males Females
Source: Provisional Census Report 2011 18
The figures at a glance like area, population, density, sex ratio and literacy rate of India, Karnataka State, Bagalkot District and Jamakhandi taluk are shown in Table 2.1. Karnataka State was formed on 1st November 1956 under the States Reorganization Act. About 69 percent of total population lives in rural areas in the state. The percentage of literacy in the state according to 2011 census was 75.60 percent, as against 67.04 percent in 2001 census. The sex ratio of population was 968 females for every 1000 males. The climate of the state varies with the seasons. The annual rainfall in the state varies roughly from 50 to 350 cm. About 60 percent of the land area in the state is under agriculture. At present agriculture is the main source of food for the population and fodder for the cattle.
Profile of Bagalkot District B g alkot district pronounced, sometimes spelled as B g alkote is an administrative district in the Indian state of Karnataka. The district headquarters is located in the town of Bagalkot. The district is located in northern Karnataka and borders Belgaum, Gadag, Koppal, Raichur and Bijapur. The new Bagalkot district was carved out of Bijapur in 1997. The bifurcated Bagalkot district consists of six taluks - Badami, Bagalkot, Bilagi, Hunugund, Jamakhandi and Mudhol. Historically, Bagalkot was the capital of the Chalukyan Empire of South India under Pulakesi-I, who conquered the district in 550 CE. Bagalkot's Badami taluk remained the seat of the throne of the Chalukyas from 550 CE - 753 CE, when Chalukya king Kirtivarman-II was overthrown by the Rashtrakutas. The 12th century social reformist Basavanna; known for his crusade against caste exploitation. Remnants of Chalukyan art and architecture are important tourist attractions in Bagalkot. Pattadakal has many UNESCO World Heritage temples built by Vikramaditya II, while Aihole, which lies on the banks of the Malaprabha river, is an important temple town with over 140 temples belonging to both the early and later Chalukya times. The cave temples of Badami Cave Temples and the Jain temples of Rashtrakutas at Lokapura and Bilgi are also famous. Cottage 19
industries occupy a predominant position in Bagalkot. The district is popular for its silk and handloom industries. Ghataprabha River, Malaprabha River and Krishna River flow through the district. Koodalasangama lies at the point of confluence of rivers Krishna and Malaprabha. Like most districts in India, Bagalkot is headed by a Deputy Commissioner, with various Tahalsidars heading individual taluks in the district. Bagalkot district is located in the south of Karnataka state. It is a surrounded with the Bijapur, Belgaum, Gadag, Koppal and Raichur districts. The district is roughly confined within 150-49o and 160-58o North latitudes and 740-59o and 76020 East longitude. Total geographical area of Bagalkot district is 6,597 sq. km. It accounts for 3.43 percent to the total area of the state (1, 91,791 sq. km.) and ranks 12th among the districts in term of size. As per 2011 census, the districts population was 18.92 lakhs; it was 3.09 percent of the state’s population. Among different districts Bagalkot district occupies fourteenth rank with regard to population. The density of population was 288 persons per sq. km., which was lesser than the states density of 319 per sq. km. The total population in rural area is 13.33 lakh, which means 70.45 percent and in urban area, 05.59 lakh, which means 29.55 percent. The district is divided in to 6 talukas namely; (1) Badami,
(2) Bagalkot,
(3) Bilagi,
(4) Hungund
(5) Jamakhandi,
(6) Mudhol
Bagalkot is a district headquarters. For administrative purpose district is divided in to two revenue sub-divisions namely Bagalkot and Jamakhandi. The district is having 18 hoblies, 623 villages with population and 4 villages without population and 12 towns. In the district there is 1 Municipal Corporation, 12 Municipalities and 12 town panchayats. All developmental activities in the district are undertaken by Zillah panchayat, 6 taluk Panchayats Samithi’s and 163 Gram panchayats. 20
There are three major rivers flowing through the district, viz., -Krishna, Malaprabha and Ghatprabha. There is one big irrigation projects in the district near Alamatti known as Alamatti Dam. The main food crops in the district are Paddy, Wheat and Jowar whereas Challis and Ground nut are the commercial crops. There are 82 Commercial Banks and 80 Grameen Banks in the district. Bagalkot is a commercial hub of the district and a center for various commercial activities. The district is endowed with good natural resources, healthy climate and irrigational facilities as also infrastructural facilities. This has resulted in diverse economic activities and provides tremendous scope for development.
Profile of Jamakhandi Taluk Jamakhandi is a town in the Bagalkot district of the state of Indian state of Karnataka. It is the taluk headquarters of Jamakhandi Taluk. It is at distance of 90 kilometer from district headquarters Bagalkot. It was capital of Maratha chieftains once upon a time. The place is known for handloom sarees and sugarcane. Jamakhandi is one of the six taluk in the Bagalkot district. It lies between 160-24o to 160-46o North latitudes and 740-59o to 760-29o East longitude. Total geographical area of the Jamakhandi Taluk is 1,168 sq. km. It accounts for 17.76 percent to the total area of the district (6, 575 sq. km.) and ranks 3rd among the taluks in term of size. As per 2011 census, the taluks population was 4.70 lakhs; it was 24.87 percent of the district’s population. Among different taluks Jamkhandi occupies first rank with regard to population. The density of population was 296 persons per sq. km., which was higher than the district’s density of 288 per sq. km. Jamkhandi is a taluk headquarters. The taluk is having 3 hoblies, 71 villages with population and 3 towns. In the taluk there are 3 Municipalities and 3 urban agglomerations. All developmental activities in the taluk are undertaken by taluk panchayat, and 32 Gram panchayats. The main food crops in the taluk are Maize, Jowar, Wheat and Bajara whereas Sugar cane and Cotton are the commercial crops. There are 22 Commercial Banks and 17 Grameen Banks in the taluk. 21
Jamkhandi is a commercial hub of the taluk and a center for various commercial activities. The taluk is endowed with good natural resources, healthy climate and irrigational facilities as also infrastructural facilities.
Literature Review Microfinance is equally important to both men and women. Women’s experience of poverty is different and more acute than that of men because of gender-based forms of exclusion. Women become poor through deterioration in the household’s access to resources. Women’s lives are governed by more complex social constraints and responsibilities than men’s and they are more concentrated in the non-monetized sector. The existence of the gender complexities in the handling of income affects the quality of family life, the quality of children’s nutrition and education, as well as household stability. Unless and until women do not have access to economic opportunities, poverty can not be reduced. Against this background following literature has been reviewed.
Hans Dieter Seibel and Harishkumar R. Dave (November 2002), conducted a study on “Commercial Aspects of Self Help Group Banking in India: A Study of Bank Transaction Costs”, in two southern states of Andhra Pradesh and Karnataka. The fundamental objective of the study is to find out whether it is commercially viable for banks to be involved in microfinance by being linked to SHGs, which would operate as a medium for disseminating financial products for the poor. The study has adopted the case study approach. The main findings are that group lending to SHGs are effective and SHG banking is a well performing system with direct as well as indirect commercial benefits to banks.
The
limitations of the study are it is statistically non-indicative, as it does not use any sampling methods. Secondly it is a bank centered rather than a SHG centered study and also ignores SHGs, which would have financial linkages with institutions that are not banks. The present study seeks to address these gaps. 22
Francis Sinha and the Impact Assessment Team (2003), conducted a study on “The Maturing of Indian Microfinance: A Longitudinal Study” in southern states. The main objective of the study was to design and carry out impact assessment of microfinance in India. The study adopted cluster sample method. The main findings of the study are microfinance provides a safe savings mechanism and options for micro credit, which compare favorably with formal bank loans in terms of accessibility and with alternative informal moneylenders in terms of cost.
Microfinance institutions are more people centered in their
approach providing opportunities for women leadership and member involvement in-group based decision-making activities. The limitation of the study is that it is conducted at a relatively macro level rather than at a micro level and the conclusions drawn cannot be generalized. Thus, the present study is aimed at a micro level taking into consideration rural poor especially in rural areas of Jamkhandi taluk.
S. Usha Nandhini, Dr. P David Jawahar and Mr. M Shivachandran (July 2004), carried out a study on “Microfinance: Analysis of Monthly Cash Flows of Self Help Groups” in Karnataka especially Mysore and Bangalore. The main objective of the study was to examine the repayment pattern of the SHGs. The random sample method was adopted to collect primary data and the data was also collected from books maintained by SHGs. The main findings of the study are the source of funds for repayment of positive groups is indigenous moneylenders. Certain positive groups show repayment ability only due to high internal rotation and savings. Some groups have negative repayment because of lack of commitment and poor understanding among the group. The limitation of the study are it has mainly concentrated on financial services especially repayment of loans by SHGs under Sanghamitra only, whereas the present study has a broader coverage.
23
EDA Rural Systems (September 2004) conducted a study for SIDBI Foundation for Micro credit on, “The Maturing of Indian Microfinance.” The main objective of this study is to find out the extent of reach of microfinance and the impact of microfinance on poverty reduction as well as women empowerment. The methodology consist a mix of quantitative and qualitative research methods spread over a relatively wide sample. The main findings of the study are groupbased micro savings and micro credit are dominant microfinance models in India and that the relevance of the financial products to the needs of the poor are more important than just cheap loans. But the study is macro in character and the extent of generality of the conclusions is suspect. Besides this methodological gap, the study is also not clear about the impact of microfinance on poverty and about the non-economic impact of microfinance on women empowerment, even with respect to their traditional gender roles, which are the chief aims of the ensuing study.
Piyush Tiwari and S. M. Fahad- developed a concept paper, “Microfinance Institutions in India.” The paper emphasizes the need to increase access to credit for the poor rather than merely giving soft loans, by examining several ‘innovative institutional mechanisms’ developed across the world meant to enhance such accessibility. It discusses the conceptual framework of microfinance institutions in India and also attempts to incorporate the lessons learnt from the experiences of such institutions across the world. The prognosis of the authors’ analysis is that microfinance positively contributes to poverty alleviation programmes. However the analysis is yet to be substantiated by empirical field data and is limited to income dimensions of poverty. Thus the present study is an attempt to empirically analyze SHGs and microfinance’s contribution to alleviation of both income centric and non-income centric forms of poverty. The above reviews, through light on many issues, involved in the microfinance and SHGs in various parts of the country.
24
Methodology This part deals with the techniques and the procedures used during the research study. This includes the selection of the study area, research design, nature and sources of data used, sampling technique and procedure, data collection techniques, reliability of the study, analysis and presentation of the data and the limitation of the study. Statement of the Problem Lack of access to income opportunities or skill-based training opportunities keep many people shackled to poverty. Until and unless rural people are not brought into the mainstream for economic and social change, we will fail to bring change in rural development. They need to be organized for the decision of their choices and voices. Prevalence of poverty is quite high among rural population. They need to be the main focus of any poverty alleviation program as they comprise a major section of the poor population. Among the poor, women are considered the most disadvantaged due to their limited access to economic opportunities and basic social services and the excessive burden of household chores on them. Economic and social issues are closely intertwined, one reinforcing the other. People’s access to credit is limited because both formal and informal credit institutions are geared to fund property owners. All formal credit institutions seek tangible collateral from loan and they are sidelined from institutional credit since they have no access to the inherited property. The village moneylenders are also interested more in earning high interest or acquiring the debtor’s property rather than financing people in need. In case of women, their access to institutional credit is further restricted by their confinement to household activities and lower level of awareness and educational attainment. The major problem in the current economic practice is the fact that a large proportion of women’s contributions to GDP and household maintenance activities are still not recognized in economic calculations. This makes women labor
25
contribution to social reproductions process and women themselves invisible in economics except as consumers. Women’s experience of poverty may be different and more acute than that of men because of gender based forms of exclusions. Rural poverty invariably associated with poor quality of housing, ill health, lack of access to a wider range of services including health, education. Poor people’s needs are – survival, security and quality of life.
Self-help group
approach is the key element in social mobilization. Against this background the present study has been carried out in Jamakhandi taluk of Bagalkot district in Karnataka state in India to assess the impact of SHGs a saving and income of the rural poor. • Is SHGs an impetus to save and thereby create capital for the poor? • What is the role of SHGs in household income? • Does women’s role as a member of SHGs translate into empowerment for them? Conceptual Framework The following concepts are used in present study Microfinance: It is the provision of broad range of financial services such as savings, loans, payment services, money transfers and insurance to poor and low income households, for their micro enterprises. Micro credit: It is typically the provision of very small loans that are repaid within short periods of time, based on financial capacity of the borrowers to pay back the credit. Self-Help Groups (SHG’s): It is the group of 10-20 members composed of people from the same area, friends and people from same peer groups. The group members meet regularly (weekly or monthly).
26
Saving: It is compulsory contribution by the members of group, which acts as a security for the loans. Financial Loans: The loan, which is used for the productive purposes like business, trade and those activities, which generate income. Consumption Loan: The loans, which are used for the day today expenses of the households like food, cloths and marriages.
Objectives The overall objective of the study is to assess the impact Self-help group’s membership on the standard of living of the women members and find out the role of micro-finance-SHGs as an alternative means for alleviation of poverty. The specific objectives of the study are: 1. To study the socio-economic position of SHG’s members in study area. 2. To study level of awareness among the members about the functioning of the SHGs. 3. To assess the saving habits leading to the financial inclusion of the members. 4. To assess the impact of SHGs membership on the economic conditions of the members as a means of supplementary income. 5. To study the role of SHGs on women empowerment with special reference to child care (education and health). 6. To suggest the policy implications on the improvement of the functioning of the SHGs. Hypotheses •
“Self-Help Groups has enabled the rural poor to generate saving and create capital”
•
“Self- Help Groups has made a positive impact on women empowerment” 27
Scope of the study The present study concentrates on rural poor especially in rural areas, which helps to find the problems of the poor, role of SHGs in their economic and social life (especially for women), their savings and credit facilities.
Sample Frame The study is based on stratified random sampling. In first strata the study covers two towns namely Banahatti and Jamakhandi and four villages – Algur, C’padasalgi, Hunnur and Sanal from Jamakhandi taluk of Bagalkot district in Karnataka state; second strata total of 24 SHGs have been covered (4 each from six areas), on random sample basis. In the third strata 5 members from each SHG have been selected on simple random sampling method for the final field survey. The total sample size is 120. The details of sampling are shown in Table 2.2. Table - 2.2 Sampling Details Sl Particulars
SHGs
Members
Total Sample
Urban Area 1
Banahatti
4
5
20
2
Jamkhandi
4
5
20
Rural Area 1
Algur
4
5
20
2
C’padasalgi
4
5
20
3
Hunnur
4
5
20
4
Sanal
4
5
20
Total
24
120
Source: Primary survey Various names of the SHG’s from the study area are given in Table 2.3. From urban area 8 SHG, s with 5 members each making the total sample of urban area 40 and from rural areas 16 SHG, s with 5 members each making the total sample 80. Total 24 SHG’s and 120 members. 28
Table - 2.3 Name of the SHG’s and Sampling Details Sl Particulars Urban Area 1(C-1) Banahatti 1.1 Bibi Fatima Nirantar Ulitay Sangh 1.2 Bhagya Jyoti Swa Sahaya Sangha 1.3 Gayatri Swa Sahaya Sangha 1.4 Jnyana Ratna Mahila Sangh 2(C-2) Jamkhandi 2.1 Akkamahadevi Mahila Sangh 2.2 Bhimambika Mahila Sangh 2.3 Sakubai Mahila Sangh 2.4 Vanita Mahila Sangh Rural Area 1(V-1) Algur 1.1 Akkamahadevi Mahila Sangh 1.2 Durgadevi Mahila Sangh 1.3 Kaveri Mahila Sangh 1.4 Padmashree Mahila Sangh 2(V-2) C’padasalgi 2.1 Bhuvaneswari Mahila Sangh 2.2 Gramdevate Mahila Sangh 2.3 Padmavati Mahila Sangh 2.4 Siddalingeswar Mahila Sangh 3(V-3) Hunnur 3.1 Bhagyasree Swa- sahay Sangha 3.2 Daneswari Swa-sahay Sangha 3.3 Stree Shakti Sangha 3.4 Shreedevi Swa-sahay Sangha 4(V-4) Sanal 4.1 Laxmi Swa- sahay Sangha 4.2 Mahalaxmi Swa- sahay Sangha 4.3 Marasidda Swa- sahay Sangha 4.4 Renukadevi Swa- sahay Sangha Total
Source: Primary survey 29
Members 20 5 5 5 5 20 5 5 5 5 20 5 5 5 5 20 5 5 5 5 20 5 5 5 5 20 5 5 5 5 120
Indicators Savings: The Groups Register, Individual members passbook and bank account of group. Income: Productive expenditure, Creation of business asset, consumption expenditure, costly family functions and debt repayment.
Data collection techniques and tools 1. Primary Data The primary data were gathered by applying the following research techniques: • Household Survey: A semi-structured interview schedule was prepared to take interview with the SHG members. Besides interview, the researcher let her respondents open up their experience and express themselves in their own terms and at their own pace. • Focus Group Discussion: To know the people’s perception regarding the SHG’s functioning, Focus Group Discussion was conducted among the group members. It helped to find out the detailed information regarding the groups. • Observation: Observation with the use of checklists to study how the people are getting benefit from the groups. Researcher was very careful in observing the participation of group members in different activities i.e. their participation in group meetings, decision making capacity. • Key Informant Interview: Checklist was also prepared to take information from the key informants who have detail knowledge about the group. Key informants were sampled purposively on the basis of their information.
30
2. Secondary Data The secondary data were collected from different published and unpublished sources. The sources like District Statistical Office, Bagalkot and Taluk Panchayat Office, Jamakhandi. Other different published articles, documents, books etc. were also used to obtain the necessary information.
Methods of Analysis The data analysis has been done by using simple statistical tools and modern computer packages. The data processing is done by using SPSS package and statistical techniques like cross tabulations, mean, are used so as to draw viable conclusions.
Study Area The study area has been selecting by taking in to consideration various factors like number of SHGs, Number of SHG members and number of MFIs operating in the area. Thus, the study is confined to two urban agglomerations namely Banahatti, Jamakhandi and four rural villages namely Algur, Chikkapadasalgi, Hunnur and Sanal from Jamakhandi taluk of Bagalkot district in Karnataka state of India.
Limitations of the Study The limitations of the study are: • As a micro level study the conclusions drawn may not be generalized. • The study is confined only to the two urban agglomeration and four rural villages from Jamakhandi taluk of Bagalkot district in Karnataka state. • The information collected is based on the memory of the members of the SHGs.
31
Chapter – 3
Socio-Economic Profile Microfinance plays a vital role in providing finance to the poor and needy people. SHGs are the major force for generating the finance. Women, constitute the majority of the SHGs where in they generate some saving, which is used for granting the loan. Many of the poor are facing the problem of finance as they have limited asset to support their loan through the banks. Thus, the concept of SHGs helps the poor and women to generate their own resources; so as to support their day to day needs. The socio- economic profile of the respondents helps us to understand the background the people involved in the microfinance. In a country like India even today the society is divided on the basis of caste, this is one of the indicators for many government programs. Thus, the caste of the respondents gives clear idea about respondents in the study area. The religion of the respondents helps us to tress the origin of the respondents.
Family Profile In the study areas 62 per cent of the respondents are belonging to other backward classes (OBC) remaining members are from Scheduled caste and scheduled tribe. Majority of them are belongs to nuclear family (52 per cent). The age-wise distribution reveals that the SHG composition is dominated by middle age group of 26 to 35 followed by below 25 age groups (Table 3.1). The sample SHGs consists of married women’s (71 per cent) and widowed (11.0 percent). This shows that the SHGs are providing safety net to married as well as widowed women to overcome their family financial problems by empowering them.
32
Table - 3.1 Family profile in the Study area Urban Area Family Profile
SC Caste
Religion
Type
Algur
No
%
No
%
No % No
4
20
5
25
4
20
C’padasalgi Hunnur
Sanal
%
No
% No %
5
25
6
30
Total No
%
5
25
29
24
ST
3
15
3
15
0
0
5
25
2
10
3
15
16
13
OBC
13
65
12
60
16
80
10
50
12
60
12
60
75
63
Total
20
100
20
100
20 100 20
100
20
100 20 100 120 100
Hindu
15
75
15
75
17
85
16
80
15
75
17
85
95
79
Muslim
5
25
5
25
3
15
4
20
5
25
3
15
25
21
100
20
100
20 100 20
100
20
100 20 100 120 100
Total
20
Nuclear
12
60
11
55
12
60
11
55
9
45
8
40
63
52
Joint
8
40
9
45
8
40
9
45
11
55
12
60
57
48
100 20 100 120 100
of
Family
Rural Area
Banahatti Jamkhandi
Total
20
100
20
100
20 100 20
100
20
46
3
15
3
15
2
10
2
10
2
10
2
10
14
12
Total
20
100
20
100
20 100 20
100
20
100 20 100 120 100
Married
16
80
15
75
13
65
11
55
16
80
14
70
85
71
Marriage
Unmarried
3
15
2
10
4
20
7
35
2
10
4
20
22
18
Status
Widow
1
5
3
15
3
15
2
10
2
10
2
10
13
11
Total
20
100
20
100
20 100 20
100
20
100 20 100 120 100
Age
of
Source: Primary survey Chart - 3.1 Caste-wise Distributions of Respondents
33
Education Education is a prime determinant of quality of life in the poverty alleviation efforts. Women empowerment is one of those efforts, which can be achieved through formation of SHGs. Table - 3.2 Educational Status of the Sample Members Urban Area Education
Rural Area
Banahatti Jamkhandi No
%
No
Algur
C’padasalgi
Hunnur
Sanal
Total
%
No
%
No
%
No
%
No
%
No
%
Illiterate
1
5
1
5
6
30
4
20
2
10
7
35
21
18
Primary (1 - 4 Std)
2
10
2
10
5
25
3
15
4
20
5
25
21
18
Middle Class (5 - 7)
3
15
3
15
6
30
8
40
7
35
4
20
31
26
High School
9
45
8
40
2
10
2
10
4
20
3
15
28
23
PUC
4
20
2
10
1
5
3
15
2
10
1
5
13
11
Graduate and PG
1
5
4
20
0
0
0
0
1
5
0
0
6
5
Total
20
100
20
100
20
100
20
100
20
100 20 100 120 100
Source: Primary survey
The education status of the members of the SHGs in the study area indicates that 18 per cent of them are illiterate and majority of them are representatives of Algur and Sanal. Surprisingly about 5 percent of the members are studied up to PUC and above. The literacy level is more among the urban area SHG members, compared to rural area. However, the education status is diverse among the groups (Table 3.2 & Chart-3.2).
34
Chart - 3.2 Education levels of the samples
Educational Profile
Respondents
10 8 6 4 2 0 Banahatti
Illiterate
Jamakhandi
Primary
Algur
Chikkapadasalgi
Middle Class
High School
Hunnur
PUC
Sanal
Graduate & PG
Basic Amenities Access to basic amenities by the member households in the sample area reveals that majority of them are in better-off condition. For instance, about 93 per cent of the households own a pucca house and remaining 7 per cent of them are living in kachcha houses. Similarly, access to electricity is another major element about 60 per cent of them have own metered connections and nearly ¼ of them are depending on subsidized schemes such as Bagya joti and Kutir Joti.
35
Table - 3.3 Distribution of respondents by access to basic amenities Urban Area Particulars
Housing Facility
Electricity
Drinking Water Facility
Rural Area
Banahatti Jamkhandi
Algur
C’padasalgi
Hunnur
Sanal %
Total
No
%
No
%
No
%
No
%
No
%
No
Pucca
16
80
17
85
20
100
20
100
18
90
20 100 111 93
Kachcha
4
20
3
15
0
0
0
0
2
10
0
0
No
9
%
7
Total
20
100
20
100
20
100
20
100
20
100
20 100 120 100
Bhagya Joti
3
15
2
10
5
25
7
35
5
25
9
45
31
26
Kutir joti
2
10
1
5
6
30
4
20
3
15
3
15
19
16
Owned
15
75
17
85
9
45
11
55
12
60
8
40
72
60
Total
20
100
20
100
20
100
20
100
20
100
20 100 120 100
Public Taps
14
70
12
60
20
100
17
85
13
65
15
75
91
76
Hand Pump
4
20
3
15
0
0
3
15
5
25
5
25
20
17
Tank
2
10
5
25
0
0
0
0
2
10
0
0
9
8
Total
20
100
20
100
20
100
20
100
20
100
20 100 120 100
Gas
7
35
11
55
2
10
4
20
5
25
3
15
32
Cooking
Kerosene
4
20
4
20
4
20
5
25
6
30
5
25
28
23
device
Fire wood
9
45
5
25
14
70
11
55
9
45
12
60
60
50
20 100 120 100
Toilet Facility
27
Total
20
100
20
100
20
100
20
100
20
100
Yes
5
25
13
65
1
5
4
20
6
30
0
No
15
75
7
35
19
95
16
80
14
70
20 100
Total
20
100
20
100
20
100
20
100
20
100
20 100 120 100
0
29
24
91
76
Source: Primary survey
Drinking water is yet another major element, which has been, used as a major indicator of poverty alleviation. One of the major indicators used in the millennium development goals to eradicate poverty by 2015 is access to safe water and sanitation. 76 percent of the member depended on public tap, 50percent of the member depends on firewood cooking devise and 76 percent of them don’t have access to toilet facilities, open lavatory is quite common in rural areas, whereas the Jamakahndi city is an exception to all these problems as 65 percent of the SHG members has toilet facility and 55 percent members are using gas connection as cooking devise. In this context, access to drinking water and toilet facilities show 36
pathetic result (Table 3.3). Thus, the study represents the general trend of the rural area with very limited access to the basic amenities.
Occupational Structure Occupational structure determines the earning capacity of the household members. In turn, the income status will allow the people to save in a large proportion of their income for their future precautionary measures. In this context it is highly relevant to study the occupational structure of the sample members. In the study area 25 per cent of the members are housewives. But at the same time about 43 per cent of the members work as daily wage earners and self employed (25), petty business (8) respectively. Predominately the daily workers work in the agricultural related activities, as the study area is predominated by Sugarcane and Cotton cultivation. Most of the self employed are in handloom work, as this is the major activity for the most of the members in study area, followed by bidi making in urban area and dairy farming in rural area. Housewives are more in urban area, as compared to rural area. The women’s in rural area always works in agriculture field. Hunnur village has 55 percent of the members in self employed category, because the major occupation in the village is handloom weaving. This shows that the occupational structure is diverse in nature and depending on the skills of the members. This is clear in table 3.4 However, occupational structure does not reveal the real intensity of work culture or behavior as this is highly correlated to day-to-day affairs. In some cases being engaged in work as daily wage earner or self-employed is a restriction by the head of the household or their relatives. In these circumstances, occupational structure gives us clear picture about their earning capacities and participation in the micro-finance programmes.
37
Table - 3.4 Distribution of members by occupational structure
Occupation of the Members House wife
Urban Area Banahatti Jamkhandi Algur
Rural Area C’padasalgi Hunnur
Total
Sanal
No
%
No
%
No
%
No
%
No
%
No
%
No
%
10
50
8
40
3
15
4
20
2
10
3
15
30
25
Daily worker
3
15
4
20
13
65
12
60
5
25
14
70
51
43
Self employed
5
25
7
35
2
10
3
15
11
55
2
10
30
25
Petty Business
2
10
1
5
2
10
1
5
2
10
1
5
9
8
Total
20
100
20
100
20 100 20
100
20 100 20 100 120
100
Source: Primary survey
Income level of Households As noticed earlier, level of income is a major determinant factor for participation in the micro-finance. Generally, low-income needy people will participate to overcome their short-term financial problems by saving small portion of their income.
Therefore, level of income determines the level of
participation in the SHG’s. The table 3.5 gives the idea about income level of the respondents. Table - 3.5 Distribution of households by income Urban Area Income Range
Rural Area
Banahatti Jamkhandi Algur
C’padasalgi Hunnur
Sanal
Total
No
%
No
%
No
%
No
%
No
%
No
%
No
%
Less than 15000
10
50
6
30
12
60
13
65
7
35
14
70
62
52
15001 to 24000
3
15
6
30
5
25
5
25
9
45
4
20
32
27
24001 to 50000
4
20
3
15
2
10
1
5
2
10
2
10
14
12
More than 50000
3
15
5
25
1
5
1
5
2
10
0
0
12
10
Total
20
100
20
100
20 100 20
Source: Primary survey 38
100
20 100 20 100 120 100
In the study area, about 52 per cent of the respondents have below Rs. 15,000 income. The proportion of high-income category respondents was found in Jamkhandi (25) and Banahatti (15) respectively as they are urban areas. In Sanal and Algur, majority of the respondents are having income of less than Rs.15, 000 per annum 70 percent and 60 percent respectively and only about 10 per cent of the members are obtaining income above Rs.50, 000 (Chart 3.3). Chart - 3.3 Income levels of the respondents
Respondents
Income level of Respondents 16 14 12 10 8 6 4 2 0 Banahatti
Jamakhandi
Less than 15,000
Algur
Chikkapadasalagi
15,001 - 24,000
24,001 - 50,000
Hunnur
Sanal
More than 50,000
To summarize, the sample SHGs consists of married women’s (71 per cent) and widowed (11 percent). This shows that the SHGs are providing safety net to married as well as widowed women to overcome their family financial problems by empowering them. The education status is diverse among the groups and areas have poor accessibility to basic amenities. Occupational structure shows that majority of them are Daily workers, self employed and housewives. As the study area is predominated by agricultural activities and handloom weaving. But the income of households are concerned almost 80 percent of the households have income less than Rs. 24,000/- per annum. Thus socio-economic background gives us clear idea about the respondents. 39
Chapter – 4
Self-Help Groups [SHGs] Impact Assessment A. Impact of SHGs on Economic Condition Many scholars and researcher have recognized the importance Microfinance in women empowerment. The Self-Help Groups act as a network between microfinance and women empowerment. Thus, the study of SHGs in economic condition and women empowerment has vital implications in the analysis of the study.
Inception and Size of Groups The inception of SHGs has a vital bearing on saving and credit creation. Older the SHG higher is the saving and higher is the credit generation. Whereas the size of the SHS has appositive relation with the saving, higher the members larger are the saving and via-a versa. In the present study majority (33 per cent) of the SHGs started in 2007, and 25 per cent of them are started in 2006 and 2008 respectively. In Banahatti and C’padasalgi majority (50 per cent) of the SHGs started in 2007, in Sanal 50 percent of them started in 2006. Thus the performance old SHGs are better than newly established SHGs. This is clear from Table -4.1. The size of groups indicates that 58 per cent of them have 11 -15 members and 42 per cent have 16 – 20 members. The average size of SHG’s in study area is 14 members in each SHG’s. In Jamakhandi 80 percent of SHG’s has 11-15 members and C’padasalgi has 70 percent of SHG’s has 11-15 members. There is close relation between size of SHGs and its inception.
40
Table - 4.1 Inception and Size of Groups Urban Area Particulars
Date
Total
C’padasalgi
Hunnur
Sanal
No % No %
No
%
No
%
No
%
No
%
5
25
5
25
0
0
0
0
5
2005
0
0
0
0
5
25
0
0
0
0
0
0
5
4
of 2006
0
0
5
25
5
25
5
25
5
25
10
50
30
25
10
50
5
25
5
25
10
50
5
25
5
25
40
33
2008
5
25
5
25
5
25
5
25
5
25
5
25
30
25
Total
20 100 20
100
20 100 20
100
20 100 20 100 120 100
11--15
5
25
16
80
13
65
14
70
12
60
10
50
70
58
per 16-20
15
75
4
20
7
35
6
30
8
40
10
50
50
42
20 100 20
100
20 100 20
100
20 100 20 100 120 100
Members
SHGs
Algur
2004
Inception
in
Rural Area
Banahatti Jamkhandi
2007
Total
25
0
0
No
%
15
13
Source: Primary survey
Motivation and consistency of SHGs Getting attached to the SHGs needed kind of awareness and motivation, when they join the SHGs. The permanent membership also plays a vital role in sustainability of SHG’s; there is possibility of discontinuation of SHG members and various reasons are responsible for this. This is clear from Table 4.2. Majority of the members are motivated by friends, which includes neighbors’, this is because the members of the group come in contact with non members and give a positive feedback about the working of the SHGs, automatically non- member get motivated. Self-motivation is only 18 percent, whereas family members (23 percent) and NGO workers (22 percent) also plays a role in motivation. The consistency of members in group shows that, majority (40 per cent) of the SHG’s the membership has increased; this indicates that, the SHG’s has created a positive response towards the microfinance. The rural people realized that, to solve their day to day problem the SHG is the best alternative. 34 percent of the members have given response that, the membership has been stable and 26 percent of them 41
have discontinued after joining the SHGs. This is because of various reasons. The reasons given are irregular (29 percent), unable to pay the installment of the loan amount and quarrels with other members in the groups are 23 per cent respectively. 16 percent of the members have got married and discontinued the membership. Thus, we can conclude from above analysis that, other members of the group plays a vital role in motivating the membership. Most of the SHG’s has found increase and stability in the membership, which supports that, SHG, s, has the positive impact on rural poor.
Table - 4.2 Distribution of members by motivation and consistency Urban Area Particulars
Motivation
SHGs Group size
Reason of
Rural Area
Banahatti Jamkhandi
Algur
C’padasalgi Hunnur
Sanal
No
%
No
%
No
%
No
%
%
No
%
Self
4
20
5
25
3
15
5
25
2
10
3
15
22
18
Family member
4
20
3
15
5
25
4
20
5
25
6
30
27
23
Friends
7
35
6
30
8
40
8
40
9
45
7
35
45
38
NGO workers
5
25
6
30
4
20
3
15
4
20
4
20
26
22
Total
20
100
20
100
20 100 20
100
20 100 20
100 120 100
Increased
5
25
10
50
8
40
9
45
10
50
6
30
48
40
Stable
10
50
5
25
5
25
6
30
5
25
10
50
41
34
Decreased
5
25
5
25
7
35
5
25
5
25
4
20
31
26
Total
20
100
20
100
20 100 20
100
20 100 20
No Response
1
20
0
0
1
14
0
0
1
20
0
0
3
10
Uunable to pay
1
20
1
20
1
14
1
20
1
20
2
50
7
23
1
20
2
40
2
29
1
20
1
20
0
0
7
23
left Quarrel
No % No
Total
100 120 100
the
Got married
0
0
1
20
1
14
1
20
1
20
1
25
5
16
SHGs
Irregular
2
40
1
20
2
29
2
40
1
20
1
25
9
29
Total
5
100
5
100
7
100
5
100
5
100
4
100
31
100
Source: Primary survey
42
Meetings Meetings are held regularly, preferably every week; attendance is maintained and averages over 80 percent and repayments; sanctions for default on repayment and for deviant behavior (arriving late for meetings, etc.) are imposed and accepted. The following books are maintained either by a literate member of the group or by the NGO staff or preferably by someone from the village who is paid for such services. (Admission Book, Attendance Register, Minutes Book, Members Savings Ledger, Members Pass Book, Receipt Voucher, Payment Voucher, Cash Book, General Ledger, Loan Ledger, Stock Book.). Gender issues concerning women in private and public life are raised and discussed. They begin to interact with other groups, Government and private institutions. The below image shows how the group conduct the meeting Picture - 4.1 Meeting of Bibi Fatima Nirantar Ulitay Sangh
The meetings were held monthly, fortnightly and weekly. In case of 38 percent it is held monthly, 35 percent it is held fortnightly and 27 percent it is held weekly. In most of the case few member attend the meeting, because of family problems and group members’ calls for in most cases, sometime NGO workers also calls for meeting to discuss the performance of the group. Majority 43
(48 percent) of the decision in the group are taken by the consensus, 24 percent of the members opined that group representative takes the decision. In certain critical issues decisions are also made by voting. This is clear from Table – 4.3.
Table - 4.3 Distribution of members by conduct of Meeting Urban Area Particulars
Weekly Meetings
Members attend Meeting
Method of
C’padasalgi Hunnur
Sanal
Total
No
%
No
%
No
%
No
%
No
%
No
%
No
%
4
20
7
35
8
40
6
30
2
10
5
25
32
27
6
30
5
25
7
35
7
35
9
45
8
40
42
35
10
50
8
40
5
25
7
35
9
45
7
35
46
38
Total
20
100 20 100 20 100
20
100 20 100 20 100 120 100
All
3
15
7
35
8
5
25
6
30
40
9
45
38
32
Few
6
30
7
35
8
40
9
45
10
50
11
55
51
43
Most
11
55
8
40
6
30
4
20
2
10
0
0
31
26
Total
20
100 20 100 20 100
20
100 20 100 20 100 120 100
7
35
13
65
9
45
11
55
8
40
10
50
58
48
3
15
4
20
5
25
3
15
2
10
1
5
18
15
Both
10
50
7
35
4
20
4
20
10
50
9
45
44
37
Total
20
100 20 100 20 100
20
100 20 100 20 100 120 100
Consensus
7
35
8
40
9
45
10
50
11
55
12
60
57
48
Voting
2
10
3
15
4
20
5
25
2
10
3
15
19
16
3
15
2
10
4
20
2
10
1
5
3
15
15
13
8
40
7
35
3
15
3
15
6
30
2
10
29
24
20
100 20 100 20 100
20
100 20 100 20 100 120 100
Link Worker
Decision
Algur
Monthly
of NGO
Meetings
Banahatti Jamkhandi
Fortnightly
Group Memb Call
Rural Area
Representative
Making Total
Source: Primary survey
Member’s awareness about working of SHGs When a member joins the group, it is responsibility of each of them to get acquainted with working of SHG, which indicates high level of participation by the members. If majority of the members have fair enough idea about rules and 44
regulation, saving of the group, member loan taken and so forth, is the indication of active involvement by the members. The awareness level may be bad, good and very good. Those members have very good response, has high level of awareness. This is clear in Table 4.4. The awareness level about objective of the group is very high of 65 percent, followed by saving of the group 60 percent, cash in hand and the name of the bank having the account of the group is 50 percent respectively. 75 percent and 65 percent of the members from Banahatti and Jamkhandi area has the awareness about rules and regulations. This indicates that awareness about rules and regulation in urban area is more than that of rural area, because of exposure. The awareness level indicates the participation of the members in a group. Table - 4.4 Member’s awareness about working of SHGs Urban Area Particulars
Banahatti Jamkhandi B
Rural Area Algur
C’padasalgi
Hunnur
G VG B G VG B G VG B G VG B
Sanal
G VG B
G VG
Rules and regulations 15 10 75 10 25 65 15 35 50 10 40 50 15 35
50
20
40
40
Cash in hand
10 40 50 15 45 40 20 50 30 20 40 40 10 35
55
15
35
50
Bank balance
15 40 45 10 40 10 20 35 45 15 50 35 20 45
35
25
45
30
Savings of the group
20 45 35 25 45 30 15 50 35 25 30 45 20 50
30
10
30
60
Members taken loan
30 35 35 25 40 35 15 45 40 20 45 35 25 40
35
20
35
45
Members repaid loans 75 40 45 20 45 35 15 55 30 10 45 45 15 35
50
15
45
40
Name of the bank
10 30 60 10 35 55
5 50 45 20 40 40 10 35
55
10
40
50
Group Objective
15 20 65 20 25 55 15 35 50 25 50 25 20 40
40
5
30
65
Source: Primary survey Savings Regular savings and lending operations gather strengths for the operation and the sustainability of SHG’s. This provides the members of the SHG with an opportunity to acquire the skills to manage its resources. Savings provide women with a means of building up an asset base. Women themselves also often value the 45
opportunity to be seen to be making a greater contribution to household well being giving them greater confidence and sense of self-worth. Self-Help Group (SHG) is a small voluntary association of poor people, with the purpose of solving their common problems through self-help and mutual help. The SHG promotes small savings among its members. The SHGs comprise poor people who do not have access to formal financial institutions. Members of SHGs save equal amounts as decided in their groups. The meager savings of an individual may not be sufficient to meet her needs but all the savings of the groups members put together can be of great help to one or two members of the group. They act as the forum for the members to provide space and support to each other. The group decides on the rate of savings, timing and reasons for the loans, on the schedule of payments and repayments, and on the interest rates; it assesses when and whether the member needs a loan and whether member is able to use the loan effectively and to repay according to the schedule decided on. It is clear from the Table- 4.5 majority of the members (39 percent) have saved the amount of Rs. 5,001 – 10,000, followed with 29 percent in 2501- 5000 category and around 19 percent of them have saved less than Rs. 2,500. The area wise comparison indicates that in Algur majority of the members have saved amount above Rs. 10,000, because of Vermi-culture and dairy farming activities, people have more income to save. In Sanal 45 percent of them have saved amount varying in between Rs. 2501- 5000, because some of them are the daily workers and some them are getting support of family members; whereas in Hunnur 45 percent of them are saving the amount in between Rs.5001-10000, this contribution has made by their occupation handloom weaving. Thus the evidences are supporting that the saving has the positive relation with occupation of the member. But compared to urban area, rural area has generated more saving, because in urban area majority of the members are housewives, whereas in rural area majority of them are daily workers.
46
Table - 4.5 Distribution of members by cumulative savings Cumulative
Urban Area
Rural Area
Saving
Banahatti Jamkhandi Algur C’padasalgi
Hunnur Sanal
Total
Less than 2500
30
15
5
10
10
5
13
2501 – 5000
25
20
10
35
40
45
29
5001 – 10000
30
35
45
40
45
40
39
More than 10000
15
30
40
15
5
10
19
Total
100
100
100
100
100
100
100
Source: Primary survey
Purpose of savings in SHGs SHGs enhance the equality of status of women as participants, decisionmakers and beneficiaries in the democratic, economic, social and cultural spheres of life. The SHGs provide savings mechanism, which suits the needs of the members. It also provides a cost effective delivery mechanism for small credit to its members. The purpose for which the amount has been saved has importance to understand what the motive behind saving. The major purposes indicated by the members are education of the children (38 percent), marriage of the children (36 percent), asset building and health. Food security and celebration of festivals are the other purposes cited by members (Table-4.6 and Chart-4.1). In urban area education of the children is the major reason for the member, whereas in rural area marriage of the children is the major purposes for saving. This indicates that members want to educate their children, so that they should not the problem as the members are facing.
47
Table – 4.6 Distribution of members by purpose of savings Urban Area Particulars
Rural Area
Banahatti Jamkhandi Nos
%
Nos
%
Algur Nos
%
C’padasalgi
Hunnur
Nos
Nos
%
%
Sanal Nos
%
Total Nos
%
Food Security
1
5
1
5
1
5
1
5
2
10
0
0
6
5
Education
7
35
8
40
8
40
9
45
6
30
7
35
45
38
Health & Medical
1
5
2
10
1
5
2
10
2
10
2
10
10
8
Marriage
6
30
7
35
8
40
6
30
7
35
9
45
43
36
Festivals
2
10
1
5
0
0
1
5
0
0
0
0
4
3
Asset building
3
15
1
5
2
10
1
5
3
15
2
10
12
10
Total
20
100
20
100
20 100
20
100
20
100
20
100 120 100
Source: Primary survey
Chart - 4.1 Saving levels of the respondents
Saving 40 35 30 25 20 15 10 5 0
38
8
5 Food Security
36
Education
Health & Marrieage Medical Purpose of Saving
48
10 3 Festivals
Asset Building
Average Bank Balance The main objective of the SHGs is to generate saving and lend it to the needy people. This helps to generate their own fund among the members, also lend the same at concessional rate to the group members. The present average bank balance of the groups is Banahatti Rs 6, 131, followed Jamkhandi Rs. 6,050, Sanal Rs. 5,250 and C’padasalgi has Rs. 3,975.
Chart - 4.2 Average Bank Balance
Present Bank Balnce of the Members Sanal
5250
Hunnur
4820
Chikkapadasalgi
3975
Algur
5100
Jamkhandi
6050
Banahatti
6131
0
1000
2000
3000
4000
5000
6000
7000
Average amount of Saving
Sources of Loan and its Utilization Sanction of loans to SHGs by banks is based on the quantum of savings mobilized by the SHGs, but not for any specific purpose unlike in case of other schematic lending. The members borrow from SHGs and also from bank depending upon the need. The borrowings from SHGs are made on the basis of 49
two-member witness giving the surety of repayment on behalf of members. The member has to repay the loan within stipulated time period with interest laid down by the group. The group fixes the interest charged to the loan amount. From the bank the members can avail the individual loan on the recommendation of the group or group get loan sanctioned by bank under various schemes which can be distributed among the members. The sources of loan are two types SHG loan and bank loan. In study area 24 percent of the members have taken Rs. 2,501 – 5,000 and 21 percent of the members have taken Rs. 5,001 – 10,000. 18 percent of the members have not taken loan at all and 22 percent of them have taken the loan above Rs. 10,000. In urban areas like Banahatti and Jamkhandi 35 percent of the members have not borrowed the loan at all; whereas, in rural area almost 10 percent of them have not borrowed loan. This supports that the SHG’s have better impact on generating microfinance in rural area as compared to urban area. This is clear from Table-4.7.
Table - 4.7 Loan borrowed from bank and SHGs Loan
Urban Area Banahatti
Jamkhandi
Rural Area Algur
C’padasalgi
Hunnur Sanal
Total
No Loan
35
35
0
15
10
10
18
0-2500
15
20
20
10
15
15
16
2501-5000
10
15
30
25
35
30
24
5001-10000
20
10
20
25
25
25
21
10001-15000
5
0
15
15
10
15
10
15001-25000
10
10
10
5
5
0
7
> 25000
5
10
5
5
0
5
5
100
100
100
100
100
100
100
Total
Source: Primary survey
50
Purpose of loan Loan may be granted by the SHG for various purposes to its members. The bank does not decide the purpose for which the SHG gives loans to its members. The group will discuss and decide about the purpose for which loans are to be given to its individual members by the SHG. Out of 120 members 82.5 percent of them borrowed loan. The purpose of loan varies from member to member. The major purposes are taken in to consideration. Table - 4.8 and chart- 4.3 throws light on this. Majority (31 percent) of the members borrow loan for income generating activities like handloom weaving, dairy farming and vermin-culture. In Algur almost 50 percent of the members are borrowing the loan for income generating activity mostly dairy farming and vermi-culture. 17 percent of the members borrow the loan for the educating of their children. In Banahatti has 23 percent of them are borrowing the loan for education purpose. This clearly indicates that the amount borrowed is only to solve their problems of day today life. Table - 4.8 Distribution of members by purpose of loan borrowed
Urban Area Particulars
Rural Area
Banahatti Jamkhandi
Algur
C’padasalgi
Hunnur
Total
Sanal
No
%
No
%
No
%
No
%
No
%
No
%
No
%
Consumption
2
15
1
8
1
5
2
12
2
11
1
6
9
9
Income generation
3
23
2
15
10
50
6
35
4
22
6
33
31
31
Emergency
1
8
2
15
2
10
1
6
2
11
1
6
9
9
Marriage
1
8
1
8
2
10
3
18
3
17
3
17
13
13
Education
3
23
2
15
3
15
2
12
4
22
3
17
17
17
Health
2
15
2
15
1
5
1
6
2
11
2
11
10
10
others
1
8
3
23
1
5
2
12
1
6
2
11
10
10
Total
13
100
13
100
20 100 17
100
18
100 18 100 99
100
Source: Primary survey
51
Chart - 4.3 Purpose of loans
Purpose of Loan 35
Respondents
30 25 20
31
15 10 5
9
0
13
17
Marriage
Education
9
Consumption
Income Generation Activity
Emergency
10
10
Health
Misc
Purpose of Loan
Repayment of Loan Only one member of a group gets a loan at one time. The preference in getting loans is decided by the women themselves. The women availing loans have to pay interest 3 percent per month. Failure to pay loan installments, interest charges and savings on the day of meeting invites a fine of 1 percent per month. Only two members need to sign as guarantors.
If any member defaults in
repayment of loans in a group, the other members of the group are also denied further loans.
This activates the group to bring collective pressure on the
defaulter. Out of total samples 53 percent of them have borrowed the money from the SHGs and 29 percent of them have borrowed from the banks. The amount borrowed from the banks is higher as compared to the SHGs i.e. average amount borrowed from SHGs is Rs. 5,570/- and from bank it is Rs.34,485/- The average percentage of repayment under SHGs is 33 percent, where as it is 16 percent in 52
case of banks. This is clear from Table – 4.9. Thus repayment under SHG’s is good as compared to the banks. This is because of pressure of SHG’s for the repayment is more as compared to the banks.
Table - 4.9 Average loan amount and repayment from SHG and Bank Source of loan
Particulars
Urban Area
Rural Area
Banahatti Jamkhandi Algur C’padaslgi Hunnur Sanal
Loan amount SHG Repayment
Loan amount Bank Repayment
9,188
6,300
6,250
5,222
3,538
4,333
Total 5,570
(40)
(50)
(60)
(45)
(65)
(60)
(53)
2,957
2,500
2,166
3,555
1,615
2,583
2,479
(25)
(30)
(35)
(30)
(40)
(35)
(33)
26,400
53,333
62,500
8,125
40,000
(25)
(15)
(40)
(40)
(25)
3,480
11,666
25,000
2,250
13,600
(15)
(10)
(25)
(30)
(15)
25,000 34,485 (30)
(29)
10,000 11.382 (15)
(16)
Note: Figures in parenthesis indicate total members borrowed and repaid loan Source: Primary survey
To support the analysis of repayment by borrowers from SHG’s is good as compared to the SHGs is evident from Table – 4.10. Out of the total borrowers from the SHGs 61 percent of them have paid the amount regularly and 39 percent of them are defaulters. In comparison to this in case of banks 54 percent of them have the amount regularly and 46 percent of them are the defaulters. The percentage of defaulters varies from area to area. For instance, in Chikkapadasalgi only 25 percent of the members are defaulters for banks, in comparison to 33 percent in SHGs. This shows that recovery of the loan from the SHGs is good as compared to the banks.
53
Table - 4.10 Details about total loan, repayment and default rate Source of loan
Particulars
Loan
SHGs
Repayment
Defaulters
Loan
Bank
Repayment
Defaulters
Urban Area
Rural Area
Banahatti Jamkhandi Algur
C’padasalgi Hunnur
Sanal
Total
(40)8
(50)10
(60)12
(45)9
(65)13
(60)12
(53)64
{100}
{100}
{100}
{100}
{100}
{100}
{100}
(25)5
(30)6
(35)7
(30)6
(40)8
(35)7
(33)39
{63}
{60}
{58}
{67}
{62}
{54}
{61}
(15)3
(20)4
(25)5
(15)3
(25)5
(25)5
(20)25
{37}
{40}
{42}
{33}
{38}
{46}
{39}
(25) 5
(15)3
(40)8
(40)8
(25)5
(30)6
(29)35
{100}
{100}
{100}
{100}
{100}
{100}
{100}
(15)3
(10)2
(25)5
(30)6
(15)3
(15)3
(16)19
{60}
{67}
{63}
{75}
{60}
{50}
{54}
(10)2
(5)1
(15)3
(10)2
(10)2
(15)3
(13)16
{40}
{33}
{37}
{25}
{40}
{50}
{46}
Note: Figures in [ ] indicates percentage to total number of members. Figures in { } indicate percentage to total number of borrowers. Source: Primary survey
Training facility to the SHGs Members Skill generation is important component of the SHGs, as it helps the member to utilize the credit in a fruitful manner. The members don’t have any idea about the activities or the in which they have invest, training help them to solve this problem. The members received training in different areas like – Cookery, maintenance of account, tailoring and self – employment. The training details are clear in Table 4.11. In total 50 percent of the member got training in self business, because the study area has been predominated by handloom weaving, followed by tailoring and book keeping. This training activity varies from area to area. To get trained the SHGs members NGOs has played a vital role, as 63 percent of members got training from the SHGs. In Banahatti 38 percent of members got training from government officials, this positive contribution has 54
come because of the location of the area near to government offices. With regard to impact of training is concerned 45 percent of members have given the response that they are able to get skill out of training, followed by confidence building and knowledge of program. Thus, it concluded that the training has helped members for skill development. Table - 4.11 Distribution of members by training facilities provided Urban Area
Rural Area
Type of training Banahatti Jamkhandi No
%
No
%
Algur
No
%
Total
C’padasalgi Hunnur
No
%
No
%
Sanal
No
%
No
%
Cookery
1
8
3
21
0
0
0
0
0
0
0
0
4
5
Tailoring
2
15
3
21
5
33
2
18
4
27
3
25
19
24
Book Keeping
3
23
2
14
4
27
3
27
3
20
2
17
17
21
Self-Business
7
54
6
43
6
40
6
55
8
53
7
58
40
50
Total
13 100 14
100
15 100 11
100
15 100 12 100 80 100
64
8
53
7
64
10
67
8
67
50
63
47
33
4
33
30
38
Agencies of training NGOs
8
62
9
Govt. officials
5
38
5
36
7
4
36
5
Total
13 100 14
100
15 100 11
100
15 100 12 100 80 100
building
6
46
7
50
6
40
5
45
6
40
4
33
34
43
Skill development
6
46
6
43
7
47
5
45
6
40
6
50
36
45
Knowledge
1
8
1
2
13
1
3
20
2
17
10
13
Total
13 100 14
Impact of training Confidence
7 100
15 100 11
Source: Primary survey
55
9 100
15 100 12 100 80 100
Picture - 4.2 Animal Husbandry by SHGs Members
B. Women Empowerment The empowerment of women is one of the central issues in the process of development of countries all over the world. Tamil Nadu has a glorious tradition of recognizing the importance of empowering women over several centuries now. The contribution of writers and social reformers has been well documented. The Government of India has made Empowerment of Women as one of the principal objectives of the Ninth Five Year Plan (1997-2002) and also declared 2001 as the year of ‘Women’s Empowerment’. These issues of gender equality are discussed in World Conferences, National and International Conferences, etc. Our Constitution has conferred and guaranteed equality before law, universal adult franchise and equal opportunities for men and women as fundamental rights. The imperative of gender partnership in matters of development has been recognized. In order to give a fillip to empowerment of women and appropriate institutional mechanisms and interventions have been consciously built into the development design. Separate institutions for women and child development, departments at the Central and State levels, creation of the National Commission for Women and also State Commission for Women in several States are some of 56
the important developments for the betterment and prosperity of women. The launching of Rashtriya Mahila Kosh, Indira Mahila Yojana, Mahila Samridhi Yojana, reserving of one third of the number of seats in Panchayats and the local bodies are programmes launched with a view to improve and empower women socially, economically and in political frontiers.
Concept of Empowerment of Women Empowerment is a multi-faceted, multi-dimensional and multi-layered concept. Women's empowerment is a process in which women gain greater share of control over resources - material, human and intellectual like knowledge, information, ideas and financial resources like money - and access to money and control over decision-making in the home, community, society and nation, and to gain `power'. According to the Country Report of Government of India, "Empowerment means moving from a position of enforced powerlessness to one of power". A woman empowerment has got the momentum in recent past, the participation of women in all walks of life is essential. The SHGs has given women a ground where in they come together, save some money which helps them to solve their day to day expenses, member get training exposure through the SHGs. Thus, SHGs has made a positive impact on women empowerment. In this part we deals with impact of SHGs on women empowerment with special reference to childcare (health and Education) and comparison of the status with regard to improvements in their position. Table 4.12 indicates that as far as childcare is concerned, 39 percent of them have good response. The reasons for this as a tradition of our culture women are given more responsibility of childcare. This analysis supports the traditional beliefs. With regard to child education is concerned around 38 percent of the members opined that decision is taken by husband, 35 percent of opines that the other family members are taking the decisions and only 9 percent women members are taking the decisions. This shows 57
that in rural area men and other family members has got more power than the women. But the SHG’s are helpful in creating awareness, but not empowering women to take decision with regard to child education. There is a positive relation between childcare and child education. Both husband and wife have equally contributing for medical expenses. This indicates that, as far as the economic matters are concerned they have some power.
Table - 4.12 Distribution of members Empowerment Urban Area Particulars
Rural Area
Banahatti Jamkhandi Algur C'padasalgi Hunnur No
%
No %
No
%
No
%
Sanal No
%
Total
No
%
No
%
Very bad
2
10
3
15
1
5
1
5
2
10
3
15
12
10
Average
6
30
7
35
9
45
7
35
8
40
7
35
44
37
Child care
Good
8
40
9
45
7
35
8
40
9
45
6
30
47
39
Very good
4
20
1
5
3
15
4
20
1
5
4
20
17
14
Total
20
100
20
100 20 100 20
100 20 100 20 100 120 100
Child education Yourself
1
5
2
10
1
5
2
10
3
15
2
10
11
9
Family member
7
35
8
40
9
45
6
30
7
35
5
25
42
35
Husband
8
40
7
35
8
40
7
35
6
30
10
50
46
38
You & husband
4
20
3
15
2
10
5
25
4
20
3
15
21
18
Total
20
100
20
100 20 100 20
100 20 100 20 100 120 100
Payment for medical facilities No response
1
5
2
10
3
15
1
5
2
10
3
15
12
10
Yourself
8
40
7
35
6
30
10
50
6
30
8
40
45
38
Husband
7
35
6
30
8
40
7
35
9
45
8
40
45
38
Other member
4
20
5
25
3
15
2
10
3
15
1
5
18
14
Total
20
100
20
100
20 100 20
Source: Primary survey
58
100 20 100 20 100 120 100
Comparison of Status The SHGs membership has improved their status, as it gives exposure, generate saving, training which helps women to improve upon their status in the society. This is clear from Table - 4.13.Comparative picture given by the member before joining the SHGs and after becoming a member, shows that 43 percent of the members their socio-economic status has improved. This clearly indicates that the SHGs membership has improved the status of women and helped for empowerment. 41 percent of the members have indicated that they got good recognition in the community because of the SHGs membership. Almost 78 percent of the members are happy with the cooperation given by the other members in the group. Thus, from the analysis we can conclude that, SHGs membership has helped the members to improve upon the socio-economic status, recognition in community, which is the clear indication empowerment of women through SHGs.
Table - 4.13 Comparison of status
Urban Area Particulars Banahatti Nos
%
Rural Area Jamkhandi Algur Nos
%
Nos
%
C’padasalgi Hunnur
Sanal
Nos
Nos
%
Nos
%
Total %
Nos
%
How do you compare your socio economic status Very bad
1
5
2
10
1
5
0
0
0
0
1
5
5
42
Average
7
35
5
25
6
30
5
25
2
10
3
15
28
23
Good
8
40
8
40
7
35
9
45
11
55
8
40
51
43
Very good
4
20
5
25
6
30
6
30
7
35
8
40
36
32
Total
20
100
20
100
20
100
20
100
20
100
20
100
120 100
Recognition in the community Bad
1
5
1
5
0
0
1
5
0
0
1
5
4
3
Average
2
10
7
35
5
25
4
20
3
15
2
10
23
19
Good
9
45
8
40
9
45
10
50
7
35
6
30
49
41
Very good
8
40
4
20
6
30
5
25
10
50
11
55
44
37
Total 20 100 20 100 20 100 20 100 The co-operation and encouragement by other members Yes 14 70 15 75 16 80 17 85 No 6 30 5 25 4 20 3 15 Total 20 100 20 100 20 100 20 100
20
100
20
100
120 100
18 90 14 70 2 10 6 30 20 100 20 100
94 78 26 22 120 100
Source: Primary survey 59
To summarize, there is positive relation between the date of inception of SHGs and the membership. Majority of the members motivated to join SHGs by friends. Members have fair enough idea about the working of the SHGs and they are also participating in the process. Members got training in activities like self business and book keeping, which has helped them for skill development. The SHGs has not made the positive impact on the child care and education, the members found that their socio-economic status is improving, recognition in the community also improved. There is high level of cooperation among the SHG members. Thus, SHGs has created a positive impact on rural poor women and helped them in getting recognition in community. This proves our hypothesis “Self- Help Groups has made a positive impact on women empowerment”.
60
Chapter - 5
Summary and Findings Socio-economic Background Microfinance plays a vital role in providing finance to the poor and needy people. SHGs are the major force for generating the finance. Women, constitute the majority of the SHGs where in they generate some saving, which is used for granting the loan. In the study areas 63 per cent of the respondents are belonging to other backward classes (OBC) remaining members are from Scheduled caste and scheduled tribe. Most of them are belongs to nuclear family (52.5 per cent). The age-wise distribution reveals that the SHG composition is dominated by middle age group of 26 to 35 followed by below 25 age groups (Table 3.1). The sample SHGs consists of married women’s (70.8 per cent) and widowed (10.8 percent). This shows that the SHGs are providing safety net to married as well as widowed women to overcome their family financial problems by empowering them. The education status of the members of the SHGs in the study area indicates that only 18 per cent of them are illiterate and about 16 percent of the members are studied up to PUC and above. Access to basic amenities by the member households in the sample slums reveals that majority of them are in worse-off condition. In the study area 25 per cent of the members are housewives. But at the same time about 43 per cent of the members work as daily wage earners and self employed (25) respectively. In the study area; only 22 per cent of the respondents are from income above Rs. 24,000.
61
Impact of SHGs on Women Empowerment The inception of SHGs has a vital bearing on saving and credit creation. Older the SHG higher is the saving and higher is the performance. Whereas the size of the SHGs has appositive relation with the saving, higher the members larger are the saving and via-a versa. Thus, there is relation between size of SHGs and its inception. Majority of the members are motivated by friends, which includes neighbors. The awareness level about rules and regulation is very good; NGO worker to create the awareness among the members. The awareness level indicates the participation of the members in a group. The present average bank balance of the groups is Rs 5,221, whereas repayment is concerned it comparatively poor, 46 percent in case of SHG’s and 39 percent in case of banks. The total loan borrowed from the SHG’s is 53 percent higher than the banks whereas the repayment is far better 46 percent in case of SHG’s. Thus the comparative analysis of SHG loan and bank loan indicates that SHG’s are providing microfinance and recovery is also good. The members received training in different areas like–Self-business, tailoring and book keeping, tailoring and cookery. 50 percent of the member got training in self business, followed by tailoring, book keeping and tailoring. With regard to impact of training is concerned 45 percent of members have given the response that they are able to get skill out of training, followed by confidence building and knowledge of program. SHGs have made a positive impact on women empowerment. Childcare is concerned is concerned, 39 percent of them have good response. The reasons for this, as a tradition woman are given more responsibility of childcare. This analysis supports the traditional beliefs. With regard to child education is concerned around 38 percent of the members opined that decision is taken by husband, 35 percent of opines that the other family members are taking the decisions and only 9 percent women members are taking the decisions. This shows that in rural area men and 62
other family members has got more power than the women. But the SHG’s are helpful in creating awareness, but not empowering women to take decision with regard to child education. There is a positive relation between childcare and child education. In the study it is found that, both husband and wife equally contributing for medical expenses. This indicates that, as far as the economic matters are concerned they have some power. Comparative picture given by the member before joining the SHGs and after becoming a member, shows that 43 percent of the members their socio-economic status has improved. This clearly indicates that the SHGs membership has improved the status of women and helped for empowerment. 41 percent of the members have indicated that they got good recognition in the community because of the SHGs membership. Almost 78 percent of the members are happy with the cooperation given by the other members in the group. Thus, from the analysis we can conclude that, SHGs membership has helped the members to improve upon the socio-economic status, recognition in community, which is the clear indication empowerment of women through SHGs. To summarize, the sample SHGs consists of married women’s (71 per cent) and widowed (11 percent). This shows that the SHGs are providing safety net to married as well as widowed women to overcome their family financial problems by empowering them. The education status is diverse among the groups and areas have poor accessibility to basic amenities. Occupational structure shows that majority of them are Daily workers, self employed and housewives. As the study area is predominated by agricultural activities and handloom weaving. But the income of households are concerned almost 80 percent of the households have income less than Rs. 24,000/- per annum. Thus socio-economic background gives us clear idea about the respondents. There is positive relation between the date of inception of SHGs and the membership. Majority of the members motivated to join SHGs by friends. Members have fair enough idea about the working of the SHGs and they are also 63
participating in the process. Members got training in activities like self business and book keeping, which has helped them for skill development. The SHGs has not made the positive impact on the child care and education, the members found that their socio-economic status is improving, recognition in the community also improved. There is high level of cooperation among the SHG members. Thus, SHGs has created a positive impact on rural poor women and helped them in getting recognition in community. This proves our hypothesis “Self- Help Groups has made a positive impact on women empowerment”.
Findings • In the study areas 63 per cent of the respondents are belonging to other backward classes (OBC) remaining members are from Scheduled caste and scheduled tribe. Most of them are belongs to nuclear family (52.5 per cent). • The age-wise distribution reveals that the SHG composition is dominated by middle age group of 26 to 35 followed by below 25 age groups. The sample SHGs consists of married women’s (70.8 per cent) and widowed (10.8 percent). • The education indicates that only 18 per cent of them are illiterate and about 16 percent of the members are studied up to PUC and above. • Access to basic amenities by the member households in the sample area reveals that majority of them are in worse-off condition. • 25 per cent of the members are housewives. But at the same time about 43 per cent of the members work as daily wage earners and self employed (25) respectively, about 22 per cent of the income above Rs. 24,000. • The inception of SHGs has a vital bearing on saving and credit creation.
64
• Older the SHG higher is the saving and higher is the performance. • Majority of the members are motivated by friends, which includes neighbors. • The awareness level about rules and regulation is very good; NGO worker to create the awareness among the members. • The present average bank balance of the groups is Rs 5,221, Where as repayment is concerned it comparatively poor, 46 percent in case of SHG’s and 39 percent in case of banks. • The comparative analysis of SHG loan and bank loan indicates that SHG’s are providing microfinance and recovery is also good. • The members received training in different areas like – Self-business, book keeping, tailoring and cookery. 50 percent of the member got training in self business, followed by book keeping and tailoring. • Childcare is concerned is concerned, 39 percent of them have good response. • Child education is concerned around 38 percent of the members opined that decision is taken by husband, 35 percent of opines that the other family members are taking the decisions and only 9 percent women members are taking the decisions. • In rural area men and other family members has got more power than the women. • Both husband and wife equally contributing for medical expenses. • 43 percent of the members their socio-economic status has improved. This clearly indicates that the SHGs membership has improved the status of women and helped for empowerment. 65
• 41 percent of the members have indicated that they got good recognition in the community because of the SHGs membership.
• Almost 78 percent of the members are happy with the cooperation given by the other members in the group. • SHGs membership has helped the members to improve upon the socioeconomic status, recognition in community, which is the clear indication empowerment of women through SHGs. • SHGs has created a positive impact on rural poor women and helped them in getting recognition in community
Recommendations Before providing credit, professional skill and training should be given, if the borrowers are unskilled or semi-skilled. A consultation services should be provided to the borrowers to select the appropriate profitable enterprises. Sufficient amount of loan should be given to start up the selected enterprises at a lower interest rate. A strong monitoring and follow-up support and services should be given in executing the enterprises especially in the first few months. Microcredit should be given in kind not in cash. So that borrowers will be benefited by getting goods and services in fare prices. Monitor the enterprises taken by the borrowers at least once a week and prepare a progress report, provide suggestions regarding further improvement. Special care should be given to the ultra-hard core poor and destitute group of people. Poverty alleviation should be the sole target, not high profit. Given below is a set of more general recommendations for donor support towards SHG development. These are based upon the findings of the study.
66
• Before providing credit, professional skill and training should be given, if the borrowers are unskilled or semi-skilled. A consultation services should be provided to the borrowers to select the appropriate profitable enterprises. • Sufficient amount of loan should be given to start up the selected enterprises at a lower interest rate. A strong monitoring and follow-up support and services should be given in executing the enterprises especially in the first few months. • Micro-credit should be given in kind not in cash. So that borrowers will be benefited by getting goods and services in fare prices. • Monitor the enterprises taken by the borrowers at least once a week and prepare a progress report, provide suggestions regarding further improvement. • Special care should be given to the ultra-hard core poor and destitute group of people. • Poverty alleviation should be the sole target, not high profit.
India has the potential of becoming a leading economy and has the unique opportunity to make that growth inclusive, provided there is willingness on the part of all sections of society to put in hard and disciplined work, together with serious, sustained and purposeful planning.
Ways Forward Micro-enterprise development of the poor under SHG framework underlines the need for a deliberate policy frame in favor of assurance in terms of technology backup, product market and human resource development. However, in the context of economic liberalization, there are indications that the markets are turning out to be unfriendly to the poor. Hence, there is a need for the development of an 67
innovative and diversified micro-finance sector, which will make a real contribution to women empowerment. Even though, microfinance is helping for the women empowerment to some extent at present. But a focused approach is needed by the government to uplift the women to maximum extent.
68
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