Self Help Group
A self-help group (SHG) is a village-based financial intermediary usually composed of between 10-20 local women. Most self-help groups are located in India, though SHGs can also be found in other countries, especially in South Asia and Southeast Asia. Members make small regular savings contributions over a few months until there is enough capital in the group to begin lending. Funds may then be lent back to the members or to others in the village for any purpose.
In India, many SHGs are ‘linked’ to banks for the delivery of microcredit. SHGs are member-based microfinance intermediaries inspired by external technical support that lie between informal financial market actors like moneylenders, collectors, and ROSCAs on the one hand, and formal actors like microfinance institutions and banks on the other. Other organizations in this transitional zone in financial market development include CVECAs and ASCAs.
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A Self-Help Group (SHG) is a registered or unregistered group of micro entrepreneurs having homogenous social and economic backgrounds, voluntarily coming together to save regular small sums of money, mutually agreeing to contribute to a common fund and to meet their emergency needs on the basis of mutual help. The group members use collective wisdom and peer pressure to ensure proper end-use of credit and timely repayment. This system eliminates the need for collateral and is closely related to that of solidarity lending, widely used by microfinance institutions. 1] To make the book-keeping simple enough to be handled by the members, flat interest rates are used for most loan calculations. In India, Self Help Groups or SHGs 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. SHGs are formed and supported usually by NGOs or (increasingly) by Government agencies. Linked not only to banks but also to wider development programmes, SHGs are seen to confer many benefits, both economic and social.
SHGs enable women to grow their savings and to access the credit which banks are increasingly willing to lend. SHGs can also be community platforms from which women become active in village affairs, stand for local election or take action to address social or community issues (the abuse of women, alcohol, the dowry system, schools, water supply). But there are also some questions. How effective are the groups in managing their financial transactions? Are the groups sustainable? Do they help in mobilising women to take social action? How effective are such actions?
Who is really benefiting? Do the poorest benefit, do they not join at all or if they do join, are they more likely to drop out? SHGs are formed by NGOs, Government agencies or Banks – the three types of ‘Self Help Promoting Agencies’ or SHPAs Self-help groups are started by non-profit organizations (NGOs) that generally have broad anti-poverty agendas. Self-help groups are seen as instruments for a variety of goals including empowering women, developing leadership abilities among poor people, increasing school enrolments, and improving nutrition and the use of birth control.
Financial intermediation is generally seen more as an entry point to these other goals, rather than as a primary objective. This can hinder their development as sources of village capital, as well as their efforts to aggregate locally controlled pools of capital through federation, as was historically accomplished by credit unions. JUTE INDUSTRY : Long before the invention of polymeric fibres, natural fibres were spun to make yarns and yarns were woven to make cloth, ropes and similar products.
Jute fibres derived from the plant of the same name were in the initial stages used to manufacture sackcloth and hessian principally. Over the years, with the advancement of technology, versatility of jute fibres has been discovered. Jute fibres are now being used not only for making sacks, but for sophisticated textile products for diverse end-uses also. It is a fascinating journey of jute stamping it as one of the oldest surviving agro-industries of the world. There had been a rapid expansion of the jute industry in India around Calcutta particularly during certain boom periods.
From one mill in 1855 with no looms and another mill established four years later with only 192 looms, towards the end of the first decade of the 20th Century there were 59 mills with 30,685 looms. In the year 1918, the loom strength was 39,401. During the period after the First World War, there was a further advance in the productive capacity of the industry and in 1919-20 the number of mills had increased to 76 with 41,000 looms. There had also come into existence three mills in Andhra Pradesh part of the then Madres Presidency, and one in Uttar Pradesh (formally United province).
During 1919-20 fourteen mills ware registered in India showing a great development in jute industry in Bengal and according to the statistics available in the ‘Romance of Jute` the loomage was well above 50,000 in 1927. The temp of expansion continued unabated both in number of mills and in loomage irrespective of the considerations of demand and supply till about 1939-40 when there were 108 mills with 68,000 looms. There was very little expansion of the industry during the years of the Second World War; nevertheless, at the end of the war, i. e. , in 1945, there ware 111 mills with an installed capacity of 68,542 looms.
There has been no significant expansion ever since and the number of composite mills has now come down to 73 owing to amalgamation an closure of uneconomic units. There has however been a reduction in the loomage also and it now stands at 44162 looms. Besides these 73 jute mills, there are about 30 spinning units manufacturing ropes and twines. The industry has completed its hundred forty five years of existence. Its productive capacity has increased from 1. 2 million tones per year in the first plan period to 1. 4 million tons at the end of the Second Plan period and 1. million tones at the end of this century. There is an overwhelming concentration of he industry in West Bengal and only a sprinkling of it is to be found elsewhere in India. The reasons for this are not far to seek. Factors like an abundant supply of raw material, proximity of cola fields of Ranigunge, navigability of the Hooghly and the availability of the required type of labor in the neighborhood were all responsible for the location of industry over a stretch of about 60 mille on either side of the river Hooghly, from Bansberia to Uluberia on the West bank and from Halisahar to Birlapur on the east bank.
Calcutta grew into greater prominence on account of this industry and was developed as first class port, a network of railways was laid, connecting Calcutta with the interior of the country, giant electric power supply station came up and inland water transport service developed. Bengal and jute industry are inseparable and in fact there is such a heavy concentration of the industry in this area that one is apt to ignore the existence of the industry else ware. But due to factors such as the availability of raw materials near about, cheap labor or ready local market, small jute mills have come up in other states too.
Besides 59 composite jute mills located in West Bengal, 3 mills are located each in Bihar and UP, 4 in Andhra Pradesh, 1 each in Assam, Orissa, Tripura and Madhya Pradesh. In addition there exist 3 exclusive yarn-producing units and about 30 mini jute-spinning units. Six sick and closed units were nationalized in 1980 and placed under the management of NJMC for their rehabilitation. Out of 73 composite units, 6 belongs to public sector, 5 to state sector, 1 to co—operative sector and 61 are private sector units.
Out of the country’s total loomage of 44162, only a mere 4429 looms are found distributed in places other than West Bengal. Similarly, out of 6,35,096 Spindles installed in the country, 5,07,960 has been installed in West Bengal. The annual production of jute goods was 15. 96 lake tones during 1998-99. Sacking continues to be the largest segment of production accounting for 52 percent. Hessian constitutes about 25 percent. One significant change in the product mix is the remarkable increase in production. Another welcome development has been the steady increase in production of non-traditional diversified products.
SHG AT A GLANCE : This Lalithakumari SHG was started way back in the year 2005 by 3 women who joined hands with an intension to help poor people. The investment they had to start about was very less and they never borrowed any money to boost their capital. The mafoi and NGO came forward took initiative and helped them. The 3 initiators got an opportunity to undergo free JUTE training conducted by the government. Ayanavaram is where this Lalithakumari SHG is located. The major objective of this SHG was to provide jobs to poor and find a way for their income.
Initially the SHG faced lots of hurdles before setting it up. They selected JUTE as the major source of raw materials. They started making lots of products with help of Jute. For making all those products their requirement was to know something about tailoring. Upto 2 years there was lots of problems which was pulling them down. There was no direct support from government, the NGO was helping them to get orders. Later more women joined in that SHG and all belong to below poverty. They started working together and built the organization. Some workers would work from home and get their wages.
Initially they don’t know anything about marketing the products , but after few years they got an opportunity to train themselves with marketing skills at entrepreneurial development centre at Guindy. This majorly helped them to conduct their business in an effective manner. With some kind of knowledge they started working and now around 20 workers are present. Each worker is effectively trained and in a manner where they work towards the organizational objective. The other SHGs in the state are found to be doing business which requires heavy capital investments. They themselves elected leaders and coordinators.
It took around 2 years for this SHG to attain break-even point. At this juncture we note that they have even re-paid the borrowings from SHGs and NGO. After that this SHG is been very stable. Various products were been produced using Jute. Here all the products are sold with 15% profit above all the costs. This was a major marketing strategy employed by them. Social harmony Indian society is split by a hierarchical caste system that has traditionally discriminated against those at the bottom – the Scheduled Castes – as well as those outside it, for example the Scheduled Tribes.
Within broad caste categories too there are divisions. The fact that the majority of SHGs (two-thirds in the sample) are single-caste groups is based on the principle of ‘affinity groups’ and neighbourhood proximity (members living nearby can more easily get together, and village neighbourhoods are usually caste based). It also stems from government policies. Government benefits for SCs/STs, BCs and SGSY subsidies are easier to channel to the target population, if all members of a group belong to the same caste category. Otherwise, some benefits will go only to some members. Nevertheless, one-third of SHGs have some members from different castes. 20% of groups in fact cross the main hierarchies (between SC/ST and the other castes). This is more likely in NGO promoted SHGs (24% of groups), lower in Government promoted groups and in AP (12% of groups). •NGO SHPAs which have village wide development focus make participation across castes a condition of their programme. As part of a deliberate strategy, we find that this takes persistence, time and a lot of convincing by the field staff. But it does lead to some degree of interaction across castes, including SCs and different sub-castes.
Over time, the experience of women from different castes and sub-castes coming together from their separate hamlets and being part of village meetings, can help to build the confidence of the usually marginalized and begin to break down some prejudices. The findings underline the persistence of traditional attitudes and divisions, but show that in some areas, and with SHPA initiative and persistence, SHGs are beginning to bridge such divisions, through mixed caste membership in some cases, and in others through joint actions across groups of different castes.