ISSN No :2230-7850 RNI : MAHMUL/2011/38595

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Vol - I , ISSUE - IV May 2011 : Other
Author : Asso.Prof. Wale V.S. and Prof. Deshmukh A.M.
Article : Women Empowerment through Self-help Group
ABSTRACT :
The growing social awareness across the globe has brought a number of
issues to the fore among which gender equality and empowerment of
women are very significant. Discrimination against women in the form of
male-female differentiation constitutes the core of the gender-biased
system. The Word Bank has suggested that empowerment of women should
be a key aspect of social development programs. The empowerment is not
essentially political alone in fact; political empowerment will not succeed in
the absence of economic empowerment. The scheme of micro financing
through Self Help Groups (SHGs) has transferred the real economic power in
the hands of women and has considerably reduced their dependence on
men. The empowerment of women and improvement of their status and
economic role needs to be integrated into economic development programs,
as the development of any country is inseparably linked with the status and
development of women. Given the gender division of labour that prevails in
India, Nutrition, Child health, and related matters typically depend mostly on
womens actions and decisions. Experience has shown that promotion of
enterprise creation and income generating activities among women would
transform them from being alive to living with dignity. One of the powerful
approaches to women empowerment and rural entrepreneurship is the
formation of Self Help Groups (SHGs) especially among women. Women
being central to the entire development process and at the precursor of
social transformation can be demonstrated with many examples that could
include Grameen Banks success, SHGs of ICICI Bank, Shakthi Ammas at
HLL, Cemex, Amul, the success of Avon, Mary Kay, and Tupperware in US
and other parts of the world.
INTRODUCTION :
This paper is divided into two sections. In the first section we shall
discuss the concept of Self-Help Groups (SHGs) as an instrument of
economic empowerment, its various models and the strength of informal
sector over formal sector. In section II Importance of women empowerment
through SHGs. Section III we shall conclude with the presentation of
strategy of women empowerment by linking benefits extended by the
governments to the members of Self-Help Groups (SHGs).
Self- help group as an instrument of economic empowerment :
Self Help Group (SHG) is a small voluntary association of poor people,
preferably from the same socioeconomic background. They come together
for the purpose of solving their common problems through self-help and
mutual help. The SHG promotes small savings among its members. The
savings are kept with a bank. This common fund is in the name of the SHG.
Usually, the number of members in one SHG does not exceed twenty.
Bank-SHGs linkage models
Since the introduction of financial sector reforms in 1991 the banks are
using these distinct linkage models to finance SHGs.
1. Model I: - Banks provide micro finance to non-governmental
organization (NGOs) for lending to SHGs and ultimately to the micro
entrepreneur (It covers about 27% of SHGs)
2. Model II: - Banks provide direct financing directly to SHGs for on
landing to micro entrepreneur (It covers 17%)
3. Model III: - Banks finance directly to SHGs for on lending to micro
entrepreneur with the intervention of NGO as social mobilizers and
facilitators (It covers 56% of SHGs).
4. Model IV: - The fourth model envisages bank loans directly to
individual members of SHGs upon recommendations of the SHGs and NGO.
In this case, the NGO assists the Bank in monitoring supervising and
recovery of loans.
Formal & Informal systems
Traditionally, the formal sector Banking Institution in India have been
serving only the needs of the commercial sector and providing loans for
middle and upper income groups.
In India, we have multi-agency rural credit delivery structure comprising
commercial Banks, Regional Rural Banks and Cooperative Banks with a large
network of more than 1,53,000 retail credit outlets (One for every 4100
population). Yet reaching the poorest, whose credit requirements are very
small, frequent and unpredictable, is still a difficult task and Sahukars (the
rural non-formal Money Lenders) continues to be the main agency. Further,
the systems and lengthy procedures of the banking institutions with
emphasis on complicated qualifying requirements, tangible collateral, margin
etc. also kept them away from these formal agencies. Banks too experienced
certain problems like poor repayment, lack of supervision and monitoring,
high proportion of non performing assets and poor repayment. Since the
credit requirements of the rural poor cannot be adopted on project lending
approach (like in formal organized sector) there emerged the need for an
informal credit supply through SHGs. Social intermediation is required for:
1. Organising rural poor women
2. Educating them
3. Imparting Training and skill
Commercial Banks, Housing Finance Institutions, NABARD, and Rural
Development Banks, Land Development Banks, Cooperative Banks, are the
major formal financial institutions. Urban Cooperative Banks (UCB) Urban
Credit Cooperative Societies (UCCS) are the two primary cooperative
financial institutions operating in the urban areas.
The informal financial sources generally include funds available from
family sources or local moneylenders. The local moneylenders charge
exorbitant rates of interest due to their informal behavior and absence of
any other source of credit for nonconventional needs. Chit funds, Bishis, are
other forms of credit operated by groups of people for their mutual benefit.
Lately, few of the NGO engaged in the activities related to community
mobilization for their socio economic development have initiated savings and
credit programmes for their target groups. The community based financial
system can be categorized into two models:
Group Based Financial Intermediary, and
NGO Linked Financial Intermediary
Most of the NGOs like SHARAN in Delhi, Federation of Thrift and Credit
Association (FTCA) in Hyderabad, or SPARC in Bombay, SEWA in
Ahmedabad. The experience of these informal intermediaries shows that
although the savings of group members, small in nature do not attract high
returns, it is still practiced due to security reasons for getting unsecured
loans without much
formalities and collaterals at lower rates compared to that available from
money lenders.
Importance of women empowerment through SHGs :
Women are critical for Development: In his book "The Fortune at the
bottom of the Pyramid", Prof. C.K.Prahlad comments, "A well-understood but
poorly articulated reality of development is the role of women. Women are
central to the entire development process. There are also at the vanguard of
social transformation. For example, Grameen bank's success is based on
lending only to women. The SHGs at ICICI bank are all women, as are the
shakti ammas at HLL. The women are entrepreneurs responsible for saving
and accessing credit. In the case of CEMEX, the company works only with
women. Amul, a milk cooperative, depends on women for their milk
origination in villages. Women also collect the cash for the milk and
therefore have achieved a new social status. Access to economic
independence can change the long tradition of suppression of women and
denial of opportunities. The success of Avon, Mary Kay and Tupperware in
US and other parts of the world are also based on the role of women
entrepreneurship.
When asked with Muhammad Yunus, managing director of Grameen
Bank in Bangladesh, a pioneer in the practice of microcredit lending as to
why loaned primarily to women, he replied, that "It has to do with the
decision to have a separate bank for the poor people. From the beginning, I
had complained about the banking system on two grounds. One complaint
was that the banking system was denying financial services to the poor
people through certain rules it had set up. The second allegation was that
the banking system also was not treating women fairly. If you look at the
gender composition of all the borrowers of all the banks in Bangladesh, not
even 1 % of the borrowers happen to be women. I said this is a very
gender-biased organization. So when I began, I wanted to make sure half
the borrowers in my program are women so that they are even. I did that. It
was not easy because women themselves didn't think that they should
borrow money. I had to do a lot of convincing. I encouraged them to
believe that they can borrow money and make money. Part of that effort
was to overcome fears -- cultural fears -- and the fact that they had never
had any experience with business and so on. Soon we saw that money going
to women brought much more benefit to the family than money going to the
men. So we changed our policy and gave a high priority to women. As a
result, now 96% of our four million borrowers in Grameen Bank are
women".
One of the powerful approaches to women empowerment and rural
entrepreneurship is the formation of Self Help Groups (SHGs) especially
among women. This strategy had fetched noticeable results not only in India
and Bangladesh but world over. "Women self-help groups are increasingly
being used as tool for various developmental interventions. Credit and its
delivery
through self-help groups have also been taken as a means for
empowerment of rural women. This integrated approach, whereby, credit is
only an entry point, and an instrument to operationalise other aspects of
group dynamics and management, also caters to the need for social
intermediation of these groups. A self-help group is conceived as a
sustainable people's institution that provides the poor rural women with
space and support necessary for them to take
effective steps towards achieving greater control of their lives. The SHG
approach has proved successful not only in improving the economic
conditions through income generation but in creating awareness about
health and hygiene, sanitation and cleanliness, environmental protection,
importance of education and better response for development schemes.
Through organizing informal self-help groups (SHGs), rural women in India
are provided credit and extension support for various production-oriented
income generating activities. These activities usually include garment
making, embroidery, food processing, bee keeping, basketry, gem cutting,
weaving, and knitting. SHGs are self-governed, with decisions about
production and marketing taken collectively, although the group leader is
responsible for identifying potential marketing centers and consumers. These
groups represent a new culture in rural development, breaking with
traditional bureaucracy and top-down management. Informal groups
empower rural women to manage rural industries and make decisions
collectively for their common economic interests. Studies on the
development of informal women's groups in India, shows how it is possible
to avoid the 'top-down management' and bureaucracy that often contribute
to the
failure of other schemes. Informal self-help groups in rural areas serve
to empower women, and provide a basis for the provision of credit and other
support for various production and income-generation activities.
Conclusion :
The success of any strategy of women empowerment depends upon the
following factors:
1. Level of education, hard work
2. Social custom
3. Family planning, small family
4. Health, medical services, cleanliness
5. Environment, tree growing, kitchen gardening.
6. Collective strategies beyond micro-credit to increase the endowments
of the poor/women enhance their exchange outcomes vis--vis the family,
markets, state and community, and socio-cultural and political spaces are
required for both poverty reduction and women empowerment.
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