Saturday, 31 December 2011


                       -A CASE STUDY OF WARANGAL DISTICT
(This article was published in the International Journal of Rural Development and Management Studies, Volume 5, Number 1, January - June 2011)

                                                                               -Dr. S. Vijay Kumar

                         Mahathma Gandhi has rightly pointed out that ‘India lives in villages’. The Government has been emphasizing the need for development of rural women and their involvement in developmental activities. Nevertheless, the six decades of planned development in India have not achieved much for women, especially rural women. From Fifth Five Year Plan onwards (1974-78) there has been a marked shift in the approach to women’s issues from welfare to development. A systematic analysis of the status and role of women in rural development strategies started with the National Plan of Action for Women (1976). For the first time a chapter on Women and Development appeared in the VI Five- year Plan (1980-85). Government of India has taken lot of initiatives to strengthen the institutional rural credit system and development programmes. We can notice this from the welfare programmes of Ninth Five year Plan (1997-2002). Then onwards there is a shift from Development to Empowerment.
                           It was observed that the flow of financial assistance to women was too marginal to enable them to cross the poverty line, though women, as members of the target group, had been entitled to certain benefits under the Integrated Rural development Programme (IRDP). It was felt therefore that a separate scheme, which would motivate women to come together and engage themselves in economically viable activities, should be drawn up. With this end in view, the Union Government in September 1982 launched Development of Women and Children in Rural Areas (DWCRA) as a sub-scheme of IRDP on a pilot basis. The Indian Government adopted the approach of SHGs to uplift the rural poor women. The empowerment of women through SHGs would lead to benefits not only to the families and community as a whole through the collective action for development in general, and women groups in particular. 
            Micro Finance institution started in India in 1980s through Self Help Groups (SHGs) model. It is the Grameen replication model of Bangladesh. Recent data shows that in India Self Help Group (SHG) bank- linkage programme (SBLP) model cumulatively has more than 3.48 million SHGs, with a membership of about 58 million, have been linked to banks with an estimated loan portfolio of Rs 80 billion. These groups have also accumulated savings of Rs 35.1 billion with the banks.
           Andhra Pradesh poverty eradication programme- VELUGU (District Poverty Initiative Project –APDPIP) was the brain child of Poverty Eradication Mission (PEM) of Govt. of AP was launched in June 2000, implemented with the assistance of World Bank through Society for Elimination of Rural Poverty (SERP), an autonomous society registered under Public Societies Act, a non-profit organization established by the AP State Government and supervised by the Andhra Pradesh Department of Rural Development.  The SERP also facilitates the transfer of ultimate control of the poverty alleviation initiatives to the participating communities. The name of Velugu Project is changed to Indira Kranthi Patham (IPK). SERP is implementing IKP in all 23 districts of Andhra Pradesh with the support of the World Bank and the Government of India. In Andhra Pradesh SHGs are getting financial help through IKP and SGSY.
              The present study is an attempt in this direction is confined to the evaluation of SHGs (financed by IKP) in Warangal District of Andhra Pradesh at micro level.
The broad objective of the study is to evaluate the role and performance of SHGs in promoting women’s empowerment in the study area. However, the study has the folloing specific objectives:
  • To analyze the economic gains derived by the members after joining the SHGs.
  • To examine the social benefits derived by the members.
  • To analyze the operating system of SHGs for the mobilization of saving, delivery of credit to the needy, management of group funds, repayment of loans, in building up leadership, and establishing linkage with banks.
  • To suggest appropriate policy intervention for the effective performance of SHGs.
          The women are powerful and capable of deriving maximum benefits from SHGs and they will be empowered more economically and socially after joining them.
METHODOLOGY: The data base for the study comprises of data to be collected from primary and secondary sources. The primary data will be collected through the structured questionnaire schedule. The secondary data consists of the published reports of DRDA Warangal, Govt. of AP, Govt. of India, books and articles published in reputed journals.
Sample Design: A multi-stage purposive random sampling is adopted. There are three stages.
1st Stage: Out of 23 districts in the State, Warangal district is chosen mainly by convenience and on the criterion of over all development. The district, among other districts in the State stands out as a sort of mean in terms of development. Its level of development is medium.
2nd Stage: Having identified the district for the study, the next step involved is the selection of mandals. For comprehensive study three mandals are selected. They are:
(1). Geesugonda Mandal is selected because SERP declared it as a Model Mandal as SHGs are strengthened more here when compared to other Mandals in the district.
(2). Ghanpur (Stn.) Mandal is selected, because majority of the population in this mandal are SCs. It is also a reserved Assembly Constituency for SCs.
(3).Kothagudem (Kothaguda) Mandal is selected, because majority in this mandal are STs. It is also a reserved Assembly Constituency for STs.
3rd Stage: After identifying the mandals, one village is selected from each mandal
on the basis of rationality and guided by DRDA officials. From Gesugonda mandal, Geesugonda village is selected. From Ghanpur (Stn.) Mandal, Ghanpur village is selected. From Kothagudem Mandal, Kothagudem (Kothaguda) village is selected.
                 Questionnaires are served in these selected villages for collecting primary data. Due care is taken to ensure that respondents belongs to different communities with different economic status.
Size of the Sample: Size of the sample is 1/3 of the total members in the SHGs of selected sample villages.
Limitations: The major limitations for the study are as follows:
  • The study is on the basis of the data collected from the field and published secondary data
  • The study findings and recommendation given are based on the limited coverage of 3 Villages.
  • The facts presented are based on the information provided and discussion held with the stakeholders
  • Poor availability of secondary sources of data
  • Since the broad objective of the study is to evaluate the role and performance of SHGs in promoting women’s empowerment in the study area, however, a detailed assessment is made keeping in view of the specific objectives and aims of the study, being a sample study analysis may be able to give skewed results. Therefore, attempt has been made to present a report focused on activities / aims/ objectives of IKP.
  • As most of the SHGs women are illiterate, the information furnished by them is cross- checked and verified with the information provided by other literate members of the group and officials.
Implementation Arrangements:
             Society for Elimination of Rural Poverty (SERP) is an overall implementing agency. At the State level, there is State Project Management Unit, consisting of C.E.O, assisted by functional specialists.
            At the district level, there is District Project Management Unit, headed by a Project Director, assisted by functional specialists. The P.D, D.P.M.U is also the P.D, DRDA. Functional specialists drawn from open market or Government.
 Each Mandal is divided into three Clusters of 10-12 habitations.
 A development professional, called Community Coordinator (CC) is placed in each Cluster.
SERP selects and trains them. After completion of training, they are contracted by the MS and are accountable to MS.
M.S responsible for social mobilisation, institution building and funding the microplans of S.H.Gs/V.Os from C.I.F
Micro credit plans are evolved by the S.H.Gs in each village. These plans are funded by their own savings, CIF fund and Bank Linkage.
V.Os responsible for appraising the micro plans and recommending them to M.S for financing from C.I.F.
V.Os appraise micro plans and also finance them from the  recycled C.I.F.
Analysis and Interpretation:
The present study is related to the evaluation of SHGs in Warangal district based on the primary data in three villages selected from three mandals.
This section deals with the empowerment of women through SHGs.  In the study area totally 284 SHGs are functioning with 2631members (Table-1).  From the 2631 members 877 respondents (1/3 of the total members in the SHGs of selected mandal villages) were selected for the study.

          Table:1 – Sample Size Selected for Study (Sample frame of the Study)

Name of the Sample Mandal
Name of the SampleVillage
No. of V.Os
In the
Total No. of SHGs
In the
Total no. of SHGs Members
In the Sample Village

No. SHGs
Selected for Study
In the Sample
!/3 of the
SHGs Members
In the Sample Villages
Selected for Study


                                                               Source: Primary Data

       Table:2- Profile of SHGs Members in Sample Villages Selected for Study

Caste-wise SHGs
Geesugonda Village
( SERP declared
  Model Mandal)
Ghanpur (Stn) Village
(SC Mandal)
Kothagudem Village
(ST Mandal)
No.of SC  members
         52 (20)
         166 (40)
        20 (10)
No.of ST  members
         26 (10)
           21 (05) 
      121 (60)
No.of BC members
       157 (60)
         145 (35) 
        50 (25)
No.of OC members
         27 (10)
           82 (20)
        10 (05)
Total SHGs Members (877)
       262 (100)   
         414 (100)
      201 (100)
% of  Literates
% of Agriculture

                                                Source: Primary Data
                            Note: Figs. in parenthesis represent percentage
Analysis of the table:
In Geesugonda village from selected SHGs members 50% are literates. 70% of SHGs members’ main occupation is agriculture and agriculture labour. A majarity of SHGs members belongs to BC community. In Ghanpur (Stn) village from selected SHGs members 65% are literates. 60% are dependent on agriculture and agriculture labour. Majority of them are SCs. In Kothagudem village from selected SHGs members, majority are STs.Their main occupation is also agriculture and agriculture labour. From selected SHGs members 40% are literates.

Table 3: Age Group of Members of SHGs


             Age Group 
No. of respondents
Less than 20
Above 60

                                                              Source: Primary Data

Analysis of the table:
Age and socio-economic activities are inter-related. The young and middle age group people can actively participate in the socio-economic activities, which is true in the activities of SHGs in the study area.  In the three sample villages, 20-30, 30-40 and 40-50 age groups are actively participated in the SHGs activities. Their percentage is 22.52,   26.72, 24.05 respectively. The aged people 50-60 role in the SHGs is also significant. 
Their percentage is 13.36. They can control and solve the problems arise in the groups. In the age group of less than 20 and above 60, the percentage of participation is 4.58 and 8.77 respectively, which is insignificant.
Table – 4: Reasons for Joining SHGs (Benefits derived by SHGs Members)

Sl. No.
No. of respondents
For getting loan
For promoting savings
For social status
For other reasons


                                                             Source: Primary Data
Analysis of the table:
The main aim of the SHGs is to promote savings and to get credit for the productive and consumption purposes.  This is true because majority people (43.33%) in the study area joins the SHGs for getting loan. 14.82% of the respondents join for improving their savings. In addition, to get social status in the study area many people (32.83%) joins the SHGs, because, SHGs give them identity. For other reasons 9.02% (social, cultural and political empowerment) members join the SHGs.

Table- 5: Monthly Incomes of the Members Before and After Joining SHGs

                        Before Joining SHGs                                           After Joining SHGs

Sl. No.
Monthly Income  Rs.
No. of Respondents
No. of Respondents
Less than 1000
Above 6000
Non-earning members


                                                                              Source: Primary Data
Analysis of the table:
Income is the major determinant of the standard of living of the people.  The SHGs member income has been increased after joining the SHGs. It is evident from the above table that in the income group of less than Rs.1000 the no.of respondents were more before joining the SHGs. After joining the SHGs their number decreasd, it means that they moved to higher income group after joining the SHGs. In all other income groups, the no of respondents increased after joining the SHGs. Hence, women members of the groups are independent to meet their personal expenditure, and they contribute more to their household income. Many housewives (22.34%) did not earn anything before joining SHGs, but after becoming a member of the SHGs, they are also earning reasonably. This increases the willingness to participate in the SHGs’ activities. Many women members independently involve in the economic activities individually and with other group members after joining SHGs. Therefore, they are now economically independent and contribute to increase their household income.
Table – 6:  Monthly Family Expenditure of the Members Before and After Joining SHGs 

                     Before Joining SHGs                                             After Joining SHGs
Sl. No.
Monthly Income  Rs.
No. of Respondents
No. of Respondents
Less than 1000
Above 4000


                                                        Source: Primary Data
Analysis of the table:
                       The family expenditure has been increased due to positive change in the SHGs members’ income. It is clear from the above that in the income group of less than Rs.1000 and Rs.1000-2000 the no.of respondents were more before joining the SHGs. But, after joining the SHGs their number decreasd, this means that they moved to higher income group after joining the SHGs. In all other income groups the no.of respondents has increased after joining the SHGs. This means that their expenditure has increased due to increase in their incomes.
                       The incremental incomes not only enhance the expenditure of the family but also promote the savings of the family after they join in the SHGs.  Here, the objective of the SHGs is fulfilled.  This is an achievement of the women SHGs in the study area (Table –5. 5 and 5. 6). Usually working women are being respected by the household members and the society.  Nowadays the women in the SHGs are also respected by the others, because they are independent in earning the income and they are contributing to household income, expenditure and savings.  Therefore the above discussion clearly states that after joining in the SHGs, the members’ well-being has been increased.
            Table – 7: Types of Loans & Percentage of Demand in the SHGs

                        Types of Loans 
     Percentage of demand
                   Agricultural Loans
                   Business Loans
                   Other Loans (Dairy& Goatary)


                                           Source: Primary Data                                               
Analysis of the table:
From the above table it is evindent that majority of the SHGs members demand loan for agriculture (60%), followed by busines (30%) and other loans (10%).

.            Table – 8: Amount of Loan Availed by the members through SHGs 

Availed Loan Amount Rs.
No. of Respondents
Less than 5,000
5,000 to 10,000
10,000 to 15,000
15,000 to 20,000
Above 20,000


                                                       Source: Primary Data
From the above, it is fond that the amount of loan availed by the members through SHGs is more in the loan groups of Rs.5000-Rs.10000 (20.87%), Rs.10000-Rs.15000 (21.66%), 15000-20000 (26.11%) when compared to the loan groups of less than Rs 5000 (17.22%) and above Rs. 20000(14.14).

                         Table –9: Repayment of Loan by SHGs’ Members 

No. of Respondents
Repayment in time
Repayment in advance
Repayment not in time

                                               Source: Primary Data
                    One of the reasons for joining SHGs is to avails credit, which is true in the present study area.  The objective of the present study is to know the rural credit by SHGs. The credit organizations like nationalized banks, Co-operative Societies and so on, follow many formalities to provide credit to the rural people. At the same time the village money lenders charge very high rate of interest.  In this situation, SHGs are the boon to the rural people, because instead of approaching banks individually, SHGs can easily approach the banks and other institutions to get loan. The SHGs get loan from credit institutions then, they refinance (share) to the members in the SHGs. The SHGs charge reasonable interest.  In the study area the prevailing interest rate is 1%. All the members are responsible to repay the loan to the banks. Therefore, most of the members (95%) repay the loan in time (Table–9). Individual group members can use the loans for their personal needs; sometime the group may invest on any economic activities.  Nowadays many SHGs are starting small business, cottage industries, food processing units etc.   The SHGs in the study area grant the loan to their members for various purposes.  The maximum loan amount per member is decided by the general body meeting. Almost all the members in the study area are availing the loan facilities in their SHGs. In the study area, it is reported that average saving per SHG per year in the sample villages is Rs.6000-10000 and for first bank linkage an SHG can get loan up to Rs. 50,000/-. For second bank linkage a loan up to Rs. one to one and half lakh, for third linkage a loan up to one and half lakh to two lakhs is sanctioned to an SHG depending upon the regularity of repayment of loan. Usually, an additional loan of Rs.50, 000/- is given for every bank linkage. An SHG can go up to even seven linkages also depending on the regularity of repayment of loan.
Table – 10: Benefits derived by SHG members after joining the SHGs (Multiple Responses)

Greater autonomy in house-hold decision making
Reduces domestic violence against them (women)
Economic Independence
Social Cohesion & Habit of Saving
Asset Ownership
Freedom from debt
Additional employment
Broadens their public domain

                                                            Source: Primary Data
Analysis of the table: In the sample villages after joining SHGs per every 100 respondents 30 reported that they have greater autonomy in house-hold decision making and reduced domestic violence against them .Per every 100 respondents 50 have reported that they have economic independence. This means that still male domination exists. 82 members per every 100 said that they have achieved self-confidence. Thus, majority members’ opinion is that they have gained self-confidence. 60 members per every 100 voted for social cohesion and habit of saving. Respondents’ response is 40% for asset ownership, 10% for freedom from debt, 20% for additional employment and10% for broadens their public domain. Several SHGs members have opted for more than one item. Hence, it is not possible to divide them within the 100.
                        It is evident during my field study that some of the IKP SHGs members took loans from private Micro finance Institutions (MFIs) like Swayam Krushi, Spandana, SKF, Share, Sharada, Asara and LNT for their additional personal requirements. They explained their hard ships as under:

  • Rate of interest is very high (24%-36%)
  • Though access to loan from private MFIs is easy compared to bank but, recovery procedure is inhuman- locking the defaulters in their houses, sending goondas to beat them,   using vulgar words and even demanding them to become prostitutes to repay their loans.
  • Though, the main aim of these private MFIs is to serve the rural poor, they are making money out of their business.
  • Some of the SHGs members committed suicides due to harsh methods adopted by MFIs in the recovery of loans.
  • They urged the government to take stern action against those MFIs who adopt inhuman methods in recovery of loans.
  • They appealed to the government to provide more loans through governmental agencies (IKP) adopting easy loan procedure.
  • They requested the RBI to formulate proper guidelines to the private MFIs for offering loans to the rural poor.
  • They requested the central government to simplify the loan procedure to SHGs through banks.
  • The extent of availability of Pavala Vaddi loans to the extremely poor are not up to the mark, hence they are forced to approach private MFIs.
They also complained about lengthy loan procedure and more delay in sanctioning loans to SHGs through banks as compared to private MFIs.
Main Findings:

  • SHGs extend financial services to the poor, and contribute to the alleviation of rural poverty.
  • The members had joined the group in order to earn more income, promote savings habits and to develop collective economic and social activities.
  • SHG members reflect a diverse membership covering different social and economic categories, including the poor.
  • The Groups maintain cashbooks, passbooks and attendance registers. The members in-charge of accounts are being given training in bookkeeping.
  • The SHG disbursed loans both for consumption and production purposes. Purpose-wise disbursement of credit by SHGs.
  • In the study area an SHG usually consists of 10-15 members, but in some cases    exceeded 15 members also.
  • Every member of SHG is saving Rs. 50/- per month. Thus, an SHG having 10 members is saving Rs.500/- per month is reported from all the three villages— Geesugonda, Kothaguda and Ghanpur (Stn).
  • Most of the SHGs members reported that they were housewives before         joining the SHGs.
  • All the SHGs members reported that they require additional loan from banks, rate of interest should be low and they said that they require training for self-employment.
  • All the three sample villages reported that they are not getting pavala vaddi loans so far.
  • From the three sample villages the respondents told me that they require market support for their products from government.
  • It is reported that in Geesugonda and Kothaguda villages weekly group meetings are held. In Ghanpur (Stn.) village monthly group meetings are held.
  • It is said that an SHG becomes eligible for bank linkage six months after its formation.
  • In all the three sample villages SHGs reported that they are not getting matching and revolving fund since inception of Pavala Vaddi loans
  • It is interesting to note that during my field survey, the SHG members are taking loans to repay their old loans from different private MFIs for higher rates of interest (24%-36%). That is to say that to clear off debt taken from one MFI, they are taking loan from another MFI, thus they are taking loans from several number of MFIs. There by their total debt is mounting up and unable to repay loans and committing suicides.
  • It is found that in all the sample villages irrespective cast (SC or ST or BC or OC) are joining SHGs and deriving benefits.
  • Kistapur (Hamlet of Kothaguda) a Jampakana Mill became sick unit. The Mill was closed because due to lack of market support. Hence, the SHG members of this unit are requesting the government for market support and additional loan from bankers to reopen the said sick unit.   
Pattern of Loan Utilization:
§          Majority of the groups used loan for stated purpose
§          Repeat loans used for stated purpose
§          Loan used for  multiple purposes
§          Consumption
§          Purchase of food material
§          Ceremonies
  • Health &Children Education
  • Purchase of milk animals
  • Ag. Inputs
  • Seasonal business
  • Petty business
  • Purchase of  Suing Machines
Asset Creation
  • House
  • Bore well
  • Purchase of land
Loan Amount:
  • Nowadays many SHGs are starting small business, cottage industries, food processing units etc. The SHGs in the study area grant the loan to their members for various purposes.  The maximum loan amount per member is decided by the general body meeting. Almost all the members in the study area are availing the loan facilities in their SHGs. In most of the cases loan amount is equally distributed among group members.
No. of Linkages:
  • In the study area, it is reported that average saving per SHG per year in the sample villages is Rs.6000-10000 and for first bank linkage an SHG can get loan up to Rs. 50,000/-. For second bank linkage a loan up to Rs. one to one and half lakh, for third linkage a loan up to one and half lakh to two lakhs is sanctioned to an SHG depending upon the regularity of repayment of loan. Usually, an additional loan of Rs.50, 000/- is given for every bank linkage. An SHG can go up to even seven linkages also depending on the regularity of repayment of loan.
  • 54% of the groups are freshly linked
  • 46% of the groups linked by repeat loans (2nd, 3rd, 4th and 5th linkages respectively)
  • Percentage of loans to OCs are increased in repeat linkages
  • Percentage of loans to SCs & STs decreased in repeat linkages
  • Higher the no. of linkage higher the loan amount
  • No. of  linkages and age of the groups are positively correlated
  • Distance and repeat loans are negatively correlated
Drop outs: It is reported during the field survey that there are no drop outs except due to migration. There are barriers inherent in the conditions of membership to a group formed to mediate financial transactions – through regular meetings, savings and loan repayments. Such conditions are difficult for women who migrate for seasonal wage employment, and households with variable or uncertain incomes. Both are economic characteristics of the poor and very poor. They can and do lead to ‘self-exclusion’ if not exclusion by group members.
It is found that from the over all performance-wise, Geesugonda stood first, followed by Ghanpur second and Kothaguda third.
SHGs and politics: There are apparent synergies between SHGs and local politics since through membership of SHGs, or SHG clusters and federations, village women can gain experience of relevant processes (regular meetings, taking decisions, allocating money). They also become more ‘visible’ in the village, which is important for campaigning. In our survey SHGs in the study sample, there are women members who ran for local political office (in the panchayat or village council), and elected as ‘ward members’ (representing a village area).
In the study area contrary to our expectations, it is found that there is no correlation between education and in joining the SHGs. There are several illiterate women who have joined the SHGs. 
Other Findings:
  • Women from the Pragathi Mahila Samakhya in Geesukonda mandal of the Warangal district are training Bihar women under the Rural Livelihood Promotion Project sponsored by the World Bank.
  • More than 70 per cent of the women were able to approach banks on their own for accessing institutional credit.
  • There is remarkable improvement in social empowerment of the members in terms of self confidence, involvement in decision making, processes, increased expression of their view points and participation for their own development.
  • Saving as a habit has been the biggest asset of the programme, which was otherwise incomprehensible earlier by the rural poor.
  • Growing awareness among members for utilization of loans for productive purposes.
  • Rural families have developed respect for their women.
  • State Government has realized the relevance of channelising funds for rural poor under different programmes for their uplift as SHGs have proved themselves as best platforms for implementing Government Programmes.
  • Bankers too have realized that the SHG financing as business proposition with good recovery and with much lesser transaction cost.                               
  • These study findings clearly show how a programme which is mainly intended for improving the economic conditions can spill over effectively in improving other social parameters of a better quality of life.
  • The SHGs were able to scale up their operations with more financing and they had access to more credit products.
  • The banks were able to tap into a large market, namely the low-income households, transactions costs were low and repayment rates were high.
  • The study clearly indicated that the repayment rates were high and that the bank linkage made difference in the lives of the SHG members.
  • In the study area, it is found that by and large there is no problem from bankers to SHGs, but their attitude is still an issue.
Evaluation of the linkage program:
v      Dependency on money lenders reduced
v      Savings habit enhanced / increased
v      Self sufficiency for consumption requirements attained.
v      80% of the total SHGs have accessed financial assistance from banks.
v      Repayment of SHG loans is above 95%.
v      Diversification and value addition to the existing activities.
v      SHG women are engaged in varieties of income generating activities.
v      SHG women are producing qualitative products with high standards in packing.
v      SHG women earning additional monthly incomes ranges from Rs.2000/- to 3000/-
v      SHG women actively participating in several government welfare programs such as family welfare, literacy etc.,
v      SHG women under taking works such as stitching & supply of Uniforms, bags, Caps etc.
v      SHG women are able to supply SHG products to national and international markets in Geesugonda Mandal
v      Has developed self confidence and leadership qualities
Problems of Micro-Finance through SHGs:
During my field study, it was observed that there are several problems hinder the progress of SHGs. They are as follows:
  • Lack awareness among members /participants.
  • Lack of efforts on the part of implementing agencies.
  • Non-cooperative attitude of financial agencies.
  • Weak credit structure of banks.
  • No active follow up programmes.
  • Lack of motivation for women in forming SHGs.
  • Lack of stability and unity among existing women SHGs.
  • Problems related to raw materials.
  • Problems of marketing.
  • Weak financial management.
  • Exploitation by strong members.
  • Low returns.
  • Inadequate and ill-trained staff.
  • Inadequate training to bankers, NGOs and government officials. It was also observed during the field study that some of the SHGs members have taken loans from more than two or three private MFIs for high rates of interest (24%-36%) for their personal needs like  construction of own houses, children education and marriages etc. These MFIs are getting grants from NABARD and in turn charging high rate of interest (24%-36%) from SHGs members taking advantage of their requirements.
  • During the field study, it is reported by some SHG members that they have to wait for months for loan from banks and are not sure that whether they will get it in time to meet their requirements. In private micro-finance the amount will be handed over to them at their village with in a week and we need not go to towns and make rounds of offices. Many of them are the members in one or the other IKP groups.
Impact Evaluation:
The economic impact of SHG-Banking on poor households:
a)      Enables increased propensity to save.
b)      Permits enhanced net incremental incomes
c)      Smoothens income inequalities
d)      Assists reduction of indebtedness with moneylenders and freedom from bondages
e)      Enables additional employment (person days) generation
f)       Facilitates empowerment of women.
  • The main lesson of SHG impact is that the development process can be made inclusive if the institutional set up has a flexibility, liberty and control to the users. The institutional reforms were kept at the backburner for a long time but now this can not be postponed further. The World Bank also took notice of it and devoted more attention to it by making a separate issue of its annual report as” Institutions for poor”.
  • A major impact evaluation of SHGs linked to banks showed that SHG members realized increases in assets, income and employment. Also, women members were found to have become more assertive in confronting social evils and problem situations. Most of the poor member households had crossed the poverty line.
  • The SHGs benefited the poorest of the poor without imposing heavy burden on the government finances and SHG is a social design in which people participate by making themselves socially and economically accountable to each other.
  • The SHG are dominated by females and it has helped in improving the quality of expenditure. The improvement in standard of living is the result of spending the additional income on family needs. If the same amount of income is given in the hands of male earner there is possibility of increase in spending of personal needs rather than the family needs. This gender dimension of expenditure is also one more dimension of SHG success.
  • It is noteworthy that the loans were used largely for health and education of children and for production-related expenses-especially by the disadvantaged.
  • Domestic violence was reduced. However, greater responsibilities for women also involved longer hours of work.
  • The SHGs are dominated by females and it has helped in improving the quality of expenditure. The improvement in standard of living is the result of spending the additional income on family needs. If the same amount of income is given in the hands of male earner there is possibility of increase in spending of personal needs rather than the family needs. This gender dimension of expenditure is also one more dimension of SHG success.
  • The experience of SHG shows that SHG can act as a vehicle to transform the lives of the poor and make the growth process inclusive. The large section of the society which is poverty ridden in developing countries like India can not share the fruits of development with traditional model of state lead industrialization. The process of growth can become inclusive if it is demand driven. The demand for growth should come from masses is the pre condition for growth. This is ensued through SHG. The SHG can act as an alternative institutional asset up to tackle the problems of unemployment poverty and gender justice.
  • SHG-Banking is demand oriented. The poor people’s most urgent needs were to find opportunities for depositing their small savings and access to additional external funds for loans to meet emergencies and for micro-investments (partly for consumption needs). Forming an own financial SHG was the key to access financial services by the rural poor, who have been outside the fold of the formal financial system. Thus, SHG is a social design in which people participate by making themselves socially and economically accountable to each other.
  • For empowerment of women it is essential that the attitudes and perceptions towards SHG members should be changed and women must be seen not just as reproducers and home makers and supplementary earners but as productive members of the economy and society.
Impact on Groups:
1. Improvement in income levels. 2. Credit is easily available.3. Access to formal institutions.
4. Free from money-lenders. 5. Access to Pro-poor programmes. 6. Employment Generation.
7. Independent life. 8. Education levels improved. 9. Habit of savings. 10.Health Status improved. 11. More expenditure on food. 12.Generated awareness about various Govt. developmental programmes. 13. Self-confidence. 14.Decision Making power.15. Representation in other groups. 16. Leadership qualities. 17. Group solidarity
  • In the era of globalization and dominance of multinationals there is need to create a linkage between the SHGs and the corporate world is the need of the hour. The corporate sector can set example of social commitment by creating collaborative production with SHGs.
  • At present the effective linkage between banks and SHGs proved fruitful and this needs to be strengthened. But along with the financial tie up it is necessary to establish linkage with industrial sector as well as with service sector.
  • There is no indicator, which reflects the dimension of financial assets/quasi equity of SHGs created, and the volume of loans provided inside the SHG system in support of the low income people. Therefore, SHGs which hold only savings in the banking system as well as the volume saved should also be included in the Linkage banking statistics. Total volume of savings accumulated by SHG-members, should be assessed/estimated.
  • Wherever the group is not cohesive, interpersonal differences should be removed through counseling and organizing special training programmes for them.
  • SHGs awareness programme should lay greater emphasis on creating faith in the people about the potential of SHGs rather than overemphasizing the procedural and formal aspects of SHGs.
  • Generating awareness about the schemes and its benefits is essential. State government in consultation with PRI Representatives can do this.
  • Rotation of office-bearers of SHGs at regular intervals should be made mandatory.
  • Development of standards for SHGs.
  • Government should provide market support to the products of SHGs.
  • Government should provide more loans through governmental agencies (IKP) adopting easy loan procedure.
  • Sustainability of SHGs depends upon good quality records and preparation standardised statements. Hence, good quality records and standardised statements should be prepared.
  • Motivation training for income-generating activities and technological training for capacity building should be organized by competent agencies with greater seriousness.
  • Motivational training programmes should be organized for bank functionaries to generate in them a sense of cooperation and positive orientation towards SHGs’ office- bearers.
  • A rapport-building programme may be offered in which bank functionaries, NGO functionaries, SHGs’ office-bearers and other grass roots level stakeholders should participate.
  • Funding for state-level support institutions like APMAS and resource NGOs for SHG development.
  • Field visits and physical verification of assets as well as progress of the SHGs towards income generation, a schedule of inspection of SHGs by various levels of officers are suggested.
  • The NGOs should actively help the SHGs in both backward and forward linkage and provide them market support in particular. Continued grant support for SHG promotion.
  • To motivate the people for micro finance through SHGs by banks, all forms of media and particularly of the visual media should play a vital role.
  • The economic activities must be selected after careful feasibility report based on market studies and local resources.
  • It is crucially important that the activities that the beneficiaries are encouraged to undertake are more productive and remunerative than what they have traditionally being doing.
  • Efforts should be made to motivate banks to take active interest in the project and reduce the time taken for processing the applications and disbursing loan.
  • The services of professional agency should be taken to identify local activities, availability of raw material and aptitude as well as the skill of the people.
  • The training for the work must not be on an ad hoc and informal basis but by professional people knowledgeable about modern technology.
  • The aim should be that people’s quality of life after joining the SHGs significantly improves and they are not overburdened with poorly remunerated extra work.
  • Literacy and numeric training is needed for the poor women to benefit from the micro-credit schemes.
  • Training in literacy, rights and gender awareness are important complements to micro-credit for the empowerment of women. The members should be given necessary training and guidance for the successful operation of the group.
  • The members of the SHG should be more active, enthusiastic and dynamic to mobilise their savings by group actions. In this process NGOs should act as a facilitator and motivator.
  • The office bearers managing the group should be given nominal financial benefits, which will enable them to be more involved in the activities of the Group.
  • The bank should advance adequate credit to the SHG according to their needs.
  • Uniformity should be maintained in formation and extension of financial assistance to them by banks in all Mandals.
  • The procedure of the banks in sanctioning credit to SHG should be simple and quick.
  • Marketing facilities for the sale of products of SHG may be created.
  • Periodical exhibitions at block-level may be organised where the products of SHG can be displayed.
  • Meetings and Seminars may be organised where the members will get a chance to exchange their views and be able to develop their group strength by interactions.
  • Active intervention by district administration, professional bodies and voluntary organisations is precondition for the successful conception of micro enterprises in terms of skill training, designing products, providing new technology and access to market.
  • The performance of the SHGs should be monitored continuously at all level In order to develop a consistent system of monitoring the implementation at the Mandal/ DRDA level through.
  • Government should formulate legislations to control the private MFIs from the exploitation of the poor.
  • Government has to strengthen poverty alleviation and employment programmes to reduce the influence of private MFIs.
  • Government has to suggest bankers to move with the poor with social consciousness.
Every SHG should encompass the following social values in their respective groups:
  • Sending their children to school and ensuring that they stay in school.
  • Committing to build a good house for one self.
  • To follow the small family norm (two children).
  • Not accepting and not giving dowry.
  • Drinking clean water, and growing plants and vegetables.
  • Keeping their children and the environment clean.
Policy Implications:
            In this twenty-first century, we must take along an active people-centered and growth-oriented poverty alleviation strategy – a strategy which seems to incorporate women’s aspirations, dynamism and involvement.  It is envisaged that self-help groups will play a vital role in such strategy. But there is a need for structural orientation of the groups to suit the requirements of new business.
            Micro credit movement has to be viewed from a long-term perspective under SHG framework, which underlines the need for deliberate policy implications in favour of assurance in terms of technology back-up, product market and human resource development. Hence, there is a need for the development of an innovative and diversified micro-finance sector, which will make a real contribution to women empowerment.
        The concerned authorities should take care to fulfill the targets set. Strict supervision should be maintained by the bank officials so that the proper utilization of finance for productive takes place and in no case diversion funds for other purposes. Members should realize that subsidy is an aid to help them to under take an activity therefore the money has to be repaid. The effectiveness of SHGs would be considerably enhanced if a symbiosis could be worked out between them and Panchyath Raj Institutions. The given policy implications may help to further improvement of micro credit through SHGs.
          The 1990s were marked by partial deregulation of interest rates, greater competition in the banking sector, and a new nationwide microfinance initiative linking banks, NGOs and informal local groups (SHGs). Better known as ‘SHG Bank Linkage’, became a dominant form of financial access for the rural poor. However, informal/local moneylenders continue to have a strong presence in rural India, delivering finance to the poor at high rates of interest, as a vast majority of them still lack access to formal sources of finance. A major challenge therefore is to widen access to finance of the rural poor-especially women as a highly disadvantaged and deprived group- to meet their diverse needs (e.g. savings, credit, insurance against unexpected events).
           The present study assessed the benefits of microfinance through self-help groups, based on a sample survey in selected villages of Warangal district. While the benefits in terms of higher income, consumption, and savings matter for the poor, the focus here is broader, as an attempt has been made to also assess some key dimensions of women’s empowerment- defined broadly as expansion of freedom of choice and action to shape their own lives.   
            SHGs linked to banks are emerging as a low cost option to mainstream delivery systems of financial services for the poor. At the same time the evidence suggests MFIs lending to SHGs realise a poor return on their portfolio. The study was undertaken the women empowerment through SHGs in the three sample villages of Warangal district of Andhra Pradesh is found that the income of the women has been increased after joining the SHGs. So that the monthly household expenditure also has been raised to considerable level.  But the savings is increasing at slow rate, because the incremental expenditure is higher.  Mostly they are spending for present consumption. The members should change it.  The good practice of the women SHGs in the study area is repayment of the loan in time. Nearly 95% of the debtor paid their monthly due with in the time. A few members do not pay in time but this is not affecting the further credit of SHGs.  Since the repayment of loan is regular and within the time, we may conclude that the economic activities of SHGs are quite success. The benefits through women’s empowerment are substantial and reinforce the case for microfinance through SHGs on both equity and efficiency considerations.
Conclusion: In summing up the research results, we concede that the conclusions and inferences drawn from the analysis, especially based on the primary data, are to be interpreted with utmost caution. This is in view of the well known constraints of any small sample survey of a cross-section study at a point in time. Nonetheless, even a small survey, like that of ours, has the benefit of unraveling specific problems and causes that hold back the success of the programmes in a given area. We humbly claim that our research effort is succeeded at least in this direction for successful development of women empowerment and rural areas and hopefully it may assist the policy makers to remould the programmes suitable to specific areas.

1)      Damayanthi, U.T. (1999), “Development of Women and Children in Rural Areas – An Impact Study”, The Asian Economic Review, August.
2)      Deshmukh - Ranadive, J. (2003), 'Women's Participation in Self Help Groups and in Panchayati Raj Institutions: suggesting synergistic linkages' Centre for Women's Development studies, New Delhi.
3)      DWCD (2005) Platform for Action- 10 Years After: India Country Report, Delhi: Department of Women and Child Development, Ministry of Human Resource Development, GOI.
4)      Indira Kranthi Patham (IKP), Notes for World Bank Mission, October, 2008, DRDA, Warangal
5)      Dr. Amrit Patel: “Empowerment of Rural Women Concerned and      Commitment of Elected Women Representatives,” Kurukshetra, Vol.58,No.8, June 2010.
6)      Kabeer, N. (2001), “Resources Agency Achievements: Reflections on the Measurement of Women’s Empowerment – Theory and Practice”, SIDA Studies, No. 3.
7)      K.G.Karmakar (1999), “Microfinance needs and Concepts in India
8)      K G Karmakar (2009) “Emerging Trends in Microfinance”, Economic and Political Weekly, Vol. XLIV No. 13
9)      Deshmukh-Ranadive, Joy (2008) “Can Micro Finance Empower Women?” Lecture delivered at the Prof. Anupama Shah Lecture Series Programme, at HSECAA-Home Science Extension and Communication Alumni Association, M.S. University, Vadodara, 10, March 2008.
10)  DRDA, Warangal – Book lets


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