ROLE OF SELF HELP GROUPS IN WOMENS EMPOWERMENT (With reference to Pallikonda Block Vellore District Tamil Nadu)

Abstract In India, the organization of self-help groups, especially for microfinance and micro enterprise development programmes constitute a widely accepted development strategy for poverty reduction. This strategy is equally shared by government, commercial banks and civil society. The authors argue that, thus far, SHGs have shown a limited effectiveness in terms of their impact on rural poverty and their long-term sustainability. Due to the lack of proper understanding of their potential, the implementers have followed a minimalist approach that has restricted the scope of functioning of SHGs to promoting enterprises that are stereotypically considered feminine. The universal fascination with SHGs has also resulted in obscuring the potential roles of alternative institutions like co-operatives, private sectors, etc. in poverty removal. The possessiveness of some of the implementers has resulted in the development of SHGs as stand alone organizations without having any meaningful interaction with other schemes or community based organizations like watershed user groups, village panchayats, etc. As a result of this, the SHG members have not been able to access substantial development funds, which could otherwise have been available to them. This study advocates that for SHGs to have a marked and sustained impact on poverty it is necessary for them to adopt a more encompassing approach with various community-based organizations & programmes by laying far greater focus on processes, capacity building, convergence with various on-going programmes, etc. Introduction In contrast to the Grameen model of Bangladesh, the SHG based microfinance in India encourages SHG members to manage groups financial affairs like savings & loan recovery and funds are deposited in a local commercial bank in the name of the SHG. Members savings are initially used to issue small loans to needy members. After gaining some experience of credit handling, SHG is issued bigger amount of loan by a commercial bank and members are free to decide the end use of this loan, its purpose, repayment installment, etc. without any interference of the promoting NGO or the bank since SHG is responsible to the bank for repayment of the loan. NABARD has offered a basic framework to the

nationalized commercial banks for this purpose which prohibits insistence on collateral and any direct subsidy. Since the SHG model is now well known, its basic principles, phasing, etc. will not be discussed in this article. Women managed self-help groups have shown remarkable growth during the last decade in India. SHGs have proved to be very versatile and their members have successfully taken up both economic and community related interventions. SHGs provide poor women an opportunity to take decisions involving themselves, their groups and their lives. Savings and credit is normally used as an entry point for formation of SHGs since it gives the members a chance to participate in decision-making and satisfies their shortterm credit needs. Realizing that they can be a promising tool in capacity building of rural poor especially women, central and state governments have vigorously supported the SHG-centric models of development in India. Besides Swa-Shakti Project of Department of Women & Child Development (DWCD) which was launched in 1998, many other agencies have taken up programmes for supporting womens SHG movement. NABARD has launched a major initiative for accelerating credit linkage to SHGs and over 3,25,000 SHGs are now accessing bank credit. Rashtriya Mahila Kosh (RMK, an autonomous organisation promoted by DWCD), Swarnjayanti Gram Swa-rozgar Yojana (SGSY) and Watershed Development Projects of Ministry of Rural Development, Mahila Samakhya of Department of Education, Women in Agriculture, Swayamsiddha of DWCD, Jeevika Project of Government of Gujarat, Stree Shakti, Mission Shakti, SHG Missions in some other states are supporting formation and strengthening of SHGs in a big way. After success of the initial pilot, this strategy was extended to every commercial and Regional Rural Bank. Some second-tier micro-finance institutions (MFIs) like RMK, Friends of Women World Banking (FWWB), Basix, Sanghmitra Rural Financial Services and SIDBI Micro-credit Foundation, etc. have emerged in the last decade. It is estimated that around 2.5 to 3 million borrowers, mostly women, are linked with this mechanism in India. A shift in the conventional SHG-based approach was made through the Swa-Shakti Project, which started emphasizing the role of these institutions in tackling other forms of poverty which arise due to lack of confidence among the rural poor, illiteracy, poor health, inadequate access to various community

institutions and government programmes, non-participation of poor women in decision making processes within the family and community, domestic violence, etc. It was perceived that women managed SHGs could be an affective tool for bringing about womens empowerment. This approach is now increasingly being recognized in designs of recent programmes like Hariyali, Shakti Samanvaya Yojana, etc. The SHG model, as of today, has become the preferred one for a variety of development programmes and especially for micro-credit and poverty reduction. They are simultaneously being perceived as powerful vehicles for promotion of women led micro-enterprises and thereby, for reduction of rural poverty. This paper seeks to examine the nature of impact that SHGs are having on poverty reduction, and also the key factors that can contribute to their improved functioning. An internal evaluation commissioned by the Rural Development Department pointed out that very few SHGs in the field are likely to survive after withdrawal of the implementing agencies[1]. This finding led to the present study on the sustainability of some of the SHGs formed in Patan district where a variety of SHG based programmes are being simultaneously implemented. After briefly reviewing the literature on related issues, it reviews the key programmes which are being implemented in Patan district and then analyses few self-help groups. In the second part, it analyses some of the alternative structures having potential for the poor.

Women Entrepreneurship in India Women have a unique position in the society. Real Development cannot take place if it bypasses women, who not only represent one half of a countrys population but also the kernels around which societal revolution take place. Entrepreneurship enhances financial dependence and self esteem of women. Around 50 per cent of Indias population is women, yet business spheres such as trade, commerce and industry is still considered a male preserve. Entrepreneurial work has also been predominantly a mans world in India. Among the states, Padala 103 Gujarat, Maharashtra and Karnataka have more women entrepreneurs. Indian women are in no way inferior to men in all walks of life and they can be good entrepreneurs as men in the country. Therefore, it is essential to exploit the potential of Indian women. Womens participation in trade, industry and commerce, requiring entrepreneurship is still poor, mainly because of the problems associated with their gender roles. Therefore, promotion of entrepreneurship and economic empowerment of women poses a challenge to the government, funding agencies and non-

government organizations. It is important for these people to work on the limitations faced by the women and to plan supporting systems to enhance the women entrepreneurship in India.

Concept of Self-Help Groups Self-help group is a method of organising the poor people and the marginalized to come together to solve their individual problem. The SHG method is used by the government, NGOs and others worldwide. Take the example of the Grameen Bank of Bangladesh, it is a people bank formed by the poor to provide easy loans for themselves. The poor collect their savings and save it in their own banks. In return they receive easy access to loans with a small rate of interest to start their micro unit enterprise. Thousands of the poor and the marginalized population in Bangladesh are building their lives, their families and their society through Self help groups. The 9th five year plan of the government of India had given due recognition on the importance and the relevance of the Self-help group method to implement developmental schemes at the grassroots level. Statement of Research Problem Economic development of a country means a process by which per capita income of that country moves upward over a period of time. Like many other countries of the world. India has been endowed with rich natural and human resources which need proper utilization by adopting modern technology for growth and development of the economy. Therefore, entrepreneurship is essential for proper use of renewable and non-renewable natural resources and to provide employment to the unemployed youth. Many women entrepreneurs are playing a vital role in this direction through creation of utilities and generation of employment. Further, there has been a lot of progress in the growth and development of SHGs in India in general and study area in particular, and it is very essential to know the growth of entrepreneurial activities of women, its impact on women entrepreneurs and problems faced by them during entrepreneurial activities.

Need and Significance of the Study India is a rich country inhabited by a large number of poor people. Indias Five Year Plans have focused on increasing the Gross Domestic Product (GDP) and eradicating the poverty by providing more employment opportunity is to the unemployed men and women. The growth rate in the GDP at factor cost was 9.6% during 2006-07 and it is expected to grow at 6% plus during 2009-10. According to NSSO report, the unemployment in India among work force was 7.49 million in 1992-93 and the same has increased to 11.24 million in 2004-05. The people below the poverty line in India are around 20% of total population. All the above factors are equally applicable to the study area. Sangli d, which is one of the comical districts of North Karnataka. Women participation in environmental activities abroad is growing rapidly. According to Suriyamurthi et al. (2009). [Twenty-five] percent of businesses in China, 40 percent of all business in Hungary, 38 percent of business in Poland, 32 percent of business in Mexico, 25 percent of business in France are established by women entrepreneurs, 38 percent of businesses in USA are established by women and employed 27.5 million. They generate annual sales of $ 3.6 trillion. In addition, 23 percent of private firms is Japan, 1/3 of new business since 1990 in Germany and 1/3 of new business in Europe and 25 percent of self employed sector in UK were established by women entrepreneurs. The growth and development of SHGs in India in general and study area in particular has been tremendous. The number of SHGs financed by banks in India has increased from 32,995 in 1992-93 to 2,476.492 in 2006-07. The loan sanctioned and disbursed to these SHGs went up from Rs. 571 million in 1992-93 to Rs. 135,119 million in 2006-07 (Annual Reports NABARD 1992-93, 2006-07). The number of households benefited under SHG program is more than 32.98 million. Lot of progress in SHG movement took place in Sangli miraj and kupwad corporation area in terms of their numbers and members. However, the poverty, unemployment, illiteracy, low industrialization, male dominance, etc., still exist in the study area. Besides, it is also clear from the review of earlier literature that there has been no study on this area. Hence, the need of the study.

Objectives of the Study The main objectives are: 1. To study the demographic factors of the sample respondents. 2. To analyze women empowerment through SHGs.

Methodology The present study is based on the both primary as well as secondary data. To collect the primary data, questionnaires are prepared and presented personally to 125 women members of SHGs. The sample members are selected from 15 SHGs from in and around the Sangli Miraj and Kupwad corporation area. Dist - Sangli. The collected data are analyzed by classifying and tabulating. The percentage tool is used to examine women empowerment through SHGs. The secondary data were collected from newspapers, books and journals, etc.

Scope of the Study The present study covers demographic aspects of sample respondents and the empowerment of women in the study area.

Review of Literature Few studies are available on SHG and micro-finance and women empowerment. The researcher has tried to review the following: Osman (2000) in his article remarked that micro-finance schemes alone cannot alleviate poverty. The battle for total eradication of poverty requires combining micro-finance schemes with parallel, complementary programmes addressing the social and cultural dimensions of want, privation, impoverishment and dispossession.

Kapur (2001) in her study tried to discuss, analyse and answer the challenging questions as to why despite all the efforts and progress made, still there continues to be so much of gender discrimination and what strategies, actions and measures to be undertaken to achieve the expected goal of empowerment. She opined that womens empowerment is much more likely to be achieved if women have total control over their own organisations, which they can sustain both financially and managerially without direct dependence on others. Pattanaik (2003) in her study reveals that SHGs are continuously striving for a better future for tribal women as participants, decision-makers and beneficiaries in the domestic, economic, social and cultural spheres of life. But due to certain constraints like gender inequality, exploitation, women torture for which various Self Help Groups are not organised properly and effectively. Malhotra (2004) in her book has examined how women entrepreneurs affect the global economy, why women start business, how womens business associations promote entrepreneurs, and to what extent women contribute to international trade. It explores potential of micro-finance programmes for empowering and employing women and also discusses the opportunities and challenges of using micro-finance to tackle the feminisation of poverty. According to her, the micro-finance programmes are aimed to increase womens income levels and control over income leading to greater levels of economic independence. They enable womens access to networks and markets, access to information and possibilities for development of other social and political role. They also enhance perceptions of womens contribution to household income and family welfare, increasing womens participation in household decisions about expenditure and other issues leading to greater expenditure on womens welfare. Narasaiah (2004) in her study mentioned that the change in womens contribution to society is one of the striking phenomena of the late twentieth century. According to him micro-credit plays an important role in empowering women. Giving women the opportunity to realise their potential in all spheres of society is increasingly important. Cheston & Kuhn (2004) in their study concluded that micro-finance programmes have been very successful in reaching women. This gives micro-finance institutions an extraordinary opportunity to act intentionally to empower poor women and to minimise the potentially negative impacts some women experiences. Manimekalai (2004) in his article commented that to run the income generating activities successfully the SHGs must get the help of NGOs. The bank officials should counsel and guide the women in selecting and

implementing profitable income generating activities. He remarked that the formation of SHGs have boosted the self-image and confidence of rural women. Sahu and Tripathy (2005) in their edited book views that 70 per cent of worlds poor are women. Access to poor to banking services is important not only for poverty alleviation but also for optimising their contribution to the growth of regional as well as the national economy. Self Help Groups (SHGs) have emerged as the most vital instrument in the process of participatory development and women empowerment. The rural women are the marginalized groups in the society because of socio-economic constraints. They remain backward and lower position of the social hierarchical ladder. They can lift themselves from the morass of poverty and stagnation through micro finance and formation of Self-Help Groups. Das Gupta (2005) in his article commented that a paradigm shift is required from financial sector reform to micro-finance reform. While the priority sector needs to be made lean, mandatory micro credit must be monitored rigorously. Simultaneously space and scope have to be properly designed for providing competitive environment to micro-finance services. Extensive database needs to be created by the RBI for understanding micro-finance. Sinha (2005) in his study has observed that micro-finance is making a significant contribution to both the savings and borrowing of the poor in the country. According to him the main use of micro-credit is for direct investment. There is of course some fungibility, depending on household credit requirements at the time of loan disbursement. Some studies reveal that micro-finance programmes have had positive as well as negative impacts on women. Some researchers have questioned how far micro-finance benefits women (Goetz and Sen Gupta, 1996). Some argue that micro-finance programmes divert the attention of women from other more effective strategies for empowerment (Ebdon, 1995), and the attention and the resources of donors from alternative, and possibly more effective means of alleviating poverty (Rogaly, 1996). In some cases womens increased autonomy has been temporary. It only benefits women who are already better off. But in most cases the poorest women are least able to benefit because of their low initial resources base, lack of skill and market contact. Nayak (2007) made an attempt to analyze the empowerment of the poor through SHG and micro finance to the Kalahandi district of Orissa. The questionnaires were prepared and presented to 997 members of sample 80 SHGs. The study found that 89194 families of Kalathandi district benefited from SHGs and bank linkage program and suggested strengthening of cooperative sector.

Anitha and Revenkar (2007) made an attempt to study rural development through micro credit, the growth of SHGs from 1992-93 to 2003-04, and agency-wise SHGs linked on March, 31, 2004. They concluded that the success of SHGs not only improved the economic status of women, but also brought lot of changes in their social status. Vinayamoorthy and Pithoda (2007) made an attempt to examine women empowerment through SHGs in three villages of Tamil Nadu. They selected a sample of 398 members of 20 SHGs from Vellore, Thiruvannamalla and Dharmpapur districts of the state. The main objectives of the study were to examine the income, expenditure and the savings of the members after joining SHGs and the role of SHGs in providing credit. They concluded that the economic activities of SHGs were quite successful. Murugan and Begum (2008) made an attempt to examine the predominant barriers to women entrepreneurs. The study was based on the primary data collected from the sample 100 entrepreneurs of Chennai City. The study revealed that social and cultural barriers are prominent formidable block for the development of women entrepreneurs. The study concluded that entrepreneurs with ability to plan and run a business, deliver quality products. Gudaganavar and Gudaganavar (2008) made an attempt to examine the empowerment of rural women through SHG. They highlighted the progress of SHGs in India from 1992-93 to 2006-07. They also highlighted the region-wise progress of SHGs and employment of women through SHGs. They concluded that no development was possible without empowerment of women. Vasanthakumari (2008) made an attempt to examine the role of micro enterprises in empowering women in Kerala. The author took a sample of 328 micro entrepreneurs. The study revealed that these enterprises helped in empowering rural women economically, socially and individually. The study suggested giving priority to commercial viability of enterprises. Shiralashetti and Hugar (2008) made an attempt to examine the progress of SHGs and their linkage to bank. The study was based on the secondary data collected from annual reports of the NABARD. The main objectives of the study were to examine the progress of SHGs and bank linkage in India and in Karnataka State and to study the district-wise and bank-wise linkage of SHGs in Karnataka State. They concluded that SHG movement is a powerful tool for alleviating the poverty of the people.

Lalitha and Prasad (2009) made an attempt to analyze the empowerment of women through Development of Women and Children in Rural Area (DWCRA) program in the Guntur district of Andhra Pradesh. The study revealed that income of individual after joining. DWCRA program has increased comparatively. The study concluded that the potential of women is not fully tapped and utilized for the community. Sankaran (2009) made an attempt to analyze the trends and problems of rural women entrepreneurs in India. The study highlighted the conceptual aspects of trends and problems of rural women entrepreneurs in India. It concluded that women have creative ability, easy adaptability and ability to cope with setbacks. Sarawathy et al. (2009) made an attempt to analyze the role of micro finance in Krishnagiri district. They highlighted the role of Government of India, NABARD, NGO and Banks. The questionnaire was prepared and presented to 75 members of 16 SHGs of 9 NGOs. The studies revealed that majority of members have agreed that their income has increased after joining SHG. It concluded that SHGs have become the development ambassador of villages. The research done by Saurabh (2009) focuses on the experience of microfinance programs in the context of liberalization. The author highlighted the rural Indian society and Indian rural financing system. the study suggested eliminating the shortcomings of the existing rural financing system by establishing more microfinance project and RRBs.

Analysis of Women Empowerment Analysis of women empowerment through SHGs in this study is based on two dimensions: analysis of demographic information and analysis of women empowerment. The age, family system and number f dependents in the family, etc., are analyzed in demographic information. The reasons for joining SHGs, purpose of loan, repayment of loan, income, savings, expenditure and powers in important decisions are analyzed in women empowerment. It is evident from Table 1 that 50 % of sample respondents are between 30-40 years of age and 05 % of sample respondents are less than 20 years. They constitute the highest and the lowest respectively in total sample respondents. This shows that adult women who joined SHG in the study area are more in number as compared to younger and older age group.

Table 1 : Age-Wise-Classification of Respondents Age of Respondents Less than 20 20 30 30 40 40 50 Above 50 Total Number of Respondents 5 40 50 20 10 125 % 4 32 40 16 8 100.00

Table 2 shows that 76% of sample respondents have individual family system and 24% joint family system. This trend shows that joint family system has been loosing its importance even in semi urban areas due to changing socio cultural system. The joint family system is the system that protects everyone in the family, irrespective of their age and income. However, due to change in the family system, the future of elderly people seems uncertain.

Table 2: Family System-Wise Classification of Respondents Family System Individual Joint Total Number of Respondents 95 30 125 % 76 24 100.00

Table 3 shows that 50.4% of sample respondents have 1-2 dependents 40.0% have 3-4 dependents, 05.6 % 5-6 dependents and only 8.80% of sample respondents have above 6 dependents. This trend shows that peoples are aware about the population problem.

Table 3: Number of Dependents of Respondents Number of Dependents 12 34 56 Above 6 Total Number of Respondents 63 50 07 05 125 % 50.4 40.0 05.6 04.0 100

Table 4 shows that 52% of sample respondents have joined SHGs for getting loan, 32% to promote savings, 15% for social status and the rest for other reasons. This signifies that majority of respondents have joined SHGs mainly to get loan as compared to other reasons.

Table 4: Reasons for Joining SHGs Reasons Getting Loan Promoting Savings Social Status Others Total 150 Number of Respondents 65 40 15 05 125 % 52 32 12 04 100.00

It is observed that from Table 5 that 24% of sample respondents have taken loan for personal use, 08% for agricultural development, 32% for business reasons, 20% for medical purpose and 16% for housing improvement. This indicates that loan has been primarily taken for productive purposes by respondents.

Table 5: Purpose of Loan of Members Purpose of Loan Personal Number of Respondents 30 % 24

Agriculture Business Medical House Improvement Total

10 40 25 20 125

08 32 20 16 100.00

Table 6 shows that 83.20 % of sample respondents have repaid the loan on time11.2% in advance, while 05.6 % have repaid loan late. This signifies that women respondents are more prompt in repayment of loan they borrowed from SHGs.

Table 6: Repayment of Loan by the Respondents Repayment Schedule In Advance In Time Late Total Number of Respondents 14 104 07 125 % 11.2 83.2 05.6 100.00

Table 7: Monthly Income of Respondents Income Level (Rs.) Before Joining SHG Less than 1000 1000-2000 2000-3000 3000-4000 4000-5000 37 25 19 18 14 29.6 20.0 15.2 14.4 11.2 12 14 18 25 36 9.6 11.2 14.4 20.0 28.8 Number of Respondents % After Joining SHG %

Above 5000 Total

12 125

09.6 100.00

20 125

1 100.00

Table 7 indicates that the monthly income of respondents has gone up after joining SHGs. The table also shows the fact that the number of sample respondents in group less than 1000 is high before joins the SHG but after joining the SHG the number respondents in this group are less Table 8: Monthly Savings Pattern of SHG Members Saving Level (Rs.) Before Joining SHG Less than 200 200-500 500-800 Above 800 Total 48 34 27 16 125 38.40 27.20 21.60 12.80 100.00 Number of Respondents % After Joining SHG 32 25 41 27 125 25.60 20.00 32.80 21.60 100.00 %

It is evident from Table 8 that savings of sample respondents have gone up after they became members of SHGs as compared to their earlier savings. The number of sample respondents whose monthly savings is less than Rs. 200 has declined and the number of sample respondents whose savings is Rs. 500-800 and above has increased after joining SHGs in the study area. This signifies that the savings of the members of the SHGs have risen with an increase in their income. This shows that the SHG movement is in the right direction towards eradicating the poverty of the people.

Table 9: Respondents opinion regarding Joining in SHG Respondents opinion Full satisfaction after joining SHG Satisfaction after joining 28 22.40 Number of Respondents 90 % 72

SHG Less satisfaction after joining Total 125 100 07 05.60

Table 9:- This table shows that 72% respondents are full satisfied regarding their decision of joining SHG .22.40% are satisfied satisfied regarding their decision of joining SHG.

Findings Findings of the study are as, v 40 % sample respondents are in the age group between 30-40 years while 4% are less than 20 years. v 76% of sample respondents have individual family system and 24% joint family system. v 50.4% sample respondents have 1-2 dependents while 05.4% have 5-6 dependents. v 52% of sample respondents have joined SHGs for getting loan, 32% to promote savings and 12% for social status. v 83.20% of sample respondents have repaid the loan in time. v Monthly income of majority of sample respondents has increased after joining SHGs. v Savings of sample respondents has gone up after they became members of SHGs . v Majority of sample respondents satisfied after joining SHGs.

Conclusion The economic progress of India depends on the productivity of both male and female workforce. However, in India women were confined within the four walls of their house and were dominated by males. Of late, there has been tremendous progress in the social and cultural environment in India. Women are now

participating in all productive activities and are at par with men. No doubt the SHG movement in India has been working in the right direction, but it is necessary to empower more and more women in social, cultural, economic, political and legal matters, for the interest of the family in particular and the nation in general.